Markets await repo rate hike, liquidity measures by RBI

Retail inflation is highest in the last eight years. Markets expect the RBI to continue on its rate hike path till the inflation beast is tamed. So, what all is priced in and what is not?

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[thirdeye-tqwl]

This year the dividend income of govt from PSU companies and banks cross 60, 000 crore to 70, 0000 crore due to so many banks come out of stress. WE all well knows that whether its bank of maharastra where the majority holdings is above 90 % so 90 dividend go to the govt. Canaran bank holdigs is above 60% so per share dividend of RS6.50 earned by govt. NTPC, coal india, also give good dividend.

[thirdeye-tqwl]

When India imported crude oil from Russia on deep discount its very clear here that the govt further down the petrol and diesel in the coming days. The govt efforts to curb the inflation is on the right path. See the GDP growth of April month better than expectation. Now the wheat new crop cutting is completed and now in the market due to see the downfall of wheat price also. The major problem come due to transportation high rate and now after downfall of Diesel all again come down. The next step we will see the petrol and Diesel further come down by govt side and this time its again not less than Rs 5. Its pertinent to mentioned that India economy now not related to international crude prices. When other countries make sanctions against the Russia, so its good for India and not only crude but also now Gas also imported by India. Before any step of RBI i am sure no further increased in repo rate by RBI . the govt wait to see for further one month the impact of down of the price of Diesel. The Govt have in a position to down the price by 10 to 20 rupees further because Russia sell the crude to India by deep discount and its near to 75$ i.e. near to 45$ discount. The collection of GST is also satisfaction in the month of April as well as May month. The 21000 crore comes from LIC disinvestment and IDBI bank also give big money to the govt against the holdings. This year idbi, central bank, indian overseas bank and bank of maharastra also give good value. The govt also received good dividend from PSU companies as well as banks. See the dividend not only received from indian oil., REC, PFC etc but also now a big dividend received from P:SU bank whether its Canara bank or bank of maharastra.

[thirdeye-tqwl]

In my view at the current market keep focus to add the small banks share in which big turn around come like bank of Maharastra in which net profits double, best results after 5 years, Net NPA reduced below 1%, every quarter can check the NNPA is down .75 % means its become first net NPA free bank in the first quarter. This is only bank which traded below book value of Rs18.80 and see IOB book value is near to Rs10 and traded at near to Rs17, the bank of maharastra also declared a dividend of 50 paise and record date is 20th June so on the current price the dividend yield come near to 3.5% but real positive factor is that next year this bank give dividend not less than 10 to 15% so dividend yield go and cross 6 to 8% on the current price. This is justify after results and turnaround that its go and cross Rs36 and 42 this year and traded like other banks on 1x to 2x . Its also justify that from 2017 to current day, now its a candidate to cross the past high of last 5 years which is not less than 36 to 42.See and check quarter to quarter results of last five years if think to add this gem