>Ninth Annual Investor Conference 2010 (ICICI SECURITIES)

We concluded our ninth annual investor conference in Singapore last evening – over the two-day period, we hosted 36 companies and ~550 meetings. We thought the overall mood at the conference was neutral to slightly upbeat. Corporates are back in a growth phase and are aligning strategies accordingly. With the Government’s budget proposals out of the way and with no signs of any major upheavals in the global markets, most investors appear reasonably comfortable with overall market levels, though there does not appear to be any overt bullishness either. Key highlights from various meetings are detailed below.

India Unlimited

■ Financials. The banks expect the transition to a base rate regime to be positive for net margins. FDI relaxation is expected to be cleared in the monsoon session of the Parliament (from 26% to 49%). Non banking financial companies (NBFCs) seeking bank licences expect the Reserve Bank of India (RBI) to announce several regulatory requirements and there is also uncertainty on whether NBFCs affiliated to industrial houses could be granted such licences.

■ IT Services. Tata Consultancy Services (TCS) and Wipro are confident of surpassing NASSCOM’s FY11 target of 13-15% revenue growth (dollar denominated) – we expect FY11E growth to be 20%. Wipro has revised wages as well, effective February (2% onsite and 8-10% offshore).

■ Metals. The steel companies were quite upbeat. They expect at least 15% increase in domestic steel prices and given low dealer inventories, anticipate raw material price increase to be passed on. Capacity will significantly increase in India over the next few years but will still lag supply.

�� Oil&Gas – Fuel pricing. Bharat Petroleum Corporation (BPCL) expects deregulation in auto fuel pricing in the next 6-9 months and only a minor increase in kerosene prices. ONGC expects APM gas prices to be revised in phases from US$1.8 to US$4.2/mmbtu over the next three years.

■ Power. JSW Energy expects merchant rates of Rs5 per unit in FY11 and Rs4.5 in FY12. NHPC is in discussions with regulators to consider ~12% return on CWIP.

■ Real Estate & Infrastructure. Volumes in the residential segment have picked up across geographies with strong demand for mid-income housing and prices, in some locations, have crossed January ’08 highs. The commercial/retail segment remains lethargic. Lanco is looking to restructure and consolidate businesses to improve focus and funding options.

■ Telecom. The Telecom Regulatory Authority of India (TRAI) chairman presented a keynote address – the health of the industry is also an important consideration for the regulators, in addition to the requirements of the consumer. Rural penetration is another focus area. Mobile number portability (MNP) is likely in three months time.

To read the full report: ANNUAL CONFERENCE