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Wednesday, July 31, 2013
HCL Technologies Ltd has posted results for the first quarter ended 30th June, 2013.
The net profit for the quarter stood at Rs12.10bn.
Q4 other income was at Rs1.75bn, while sales is at Rs69.44bn.
Total Income has increased from Rs 210370.50 mn for the year ended June 30, 2012 to Rs 258876.70 mn for the year ended June 30, 2013.
The company has announced that the Board of Directors of the Company at its meeting held on July 31, 2013, inter alia, has recommended a final dividend of Rs.6/- per equity share of Rs.2/- each of the Company for the year ended June 30, 2013.
The company said that its Board of Directors has appointed Ms. Roshni Nadar Malhotra as the Additional Director of the Company w.e.f. July 29, 2013.
“Fy’13 results have demonstrated significant business momentum, non- linearity and record customer satisfaction. HCL continues to excel in agility and innovation with a Business Model that is resilient in a dynamic environment,” said Shiv Nadar, Chairman & Chief Strategy Officer, HCL Technologies.
“An exceptional growth of 22% during the Financial Year has propelled HCL’s Revenue past the INR 25000 crore milestone. HCL continues to lead the industry in profitable growth, with seven successive quarters of Net Income Margin expansion, having reported 62% growth in Net Income this year. We have consolidated our leadership position in the Infrastructure Management Services and verticals like Financial Service and Lifesciences & Healthcare,” said Anant Gupta, President & CEO, HCL Technologies.
“Backed by another strong quarter, we closed our Financial Year on a positive note. Our Net Income margin expanded by 400 bps and touched a five year high of 16%. Our Return on Equity for the year has been 34% which is amongst the best in the industry. EBITDA to Free Cash Flow conversion has been at a healthy 68%," said Anil Chanana, CFO, HCL Technologies.
During the quarter, HCL booked in excess of US$ 1 Billion, including 12 multi- year deals from F500/G2000 clients. These were primarily from Manufacturing, Financial Services and Lifesciences & Healthcare verticals. Focus on disruptive new propositions like EFaaSTM, ALT ASM, Enterprise of Future and Innovation Monetization continue to drive our differentiation in the transformational renewal market.
Bharti Airtel Q1 PAT at Rs6.89bn
Bharti Airtel Ltd has posted results for the first quarter ended 30th June, 2013.
The PAT for the quarter stands at Rs6.89bn, up 35%
Q1 sales is at Rs202.64bn, down 1%.
The net debt is at $9.8bn.
HCL Technologies in spotlight after Q1 results
On a consolidated basis, HCL Technologies' net profit rose 16.3% to Rs 1210 crore on 8.1% increase in revenues to Rs 6944 crore in Q4 June 2013 over Q3 March 2013.
"FY'13 results have demonstrated significant business momentum, non- linearity and record customer satisfaction. HCL continues to excel in agility and innovation with a Business Model that is resilient in a dynamic environment," said Shiv Nadar, Chairman & Chief Strategy Officer, HCL Technologies.
"An exceptional growth of 22% during the Financial Year has propelled HCL's Revenue past the INR 25000 crore milestone. HCL continues to lead the industry in profitable growth, with seven successive quarters of Net Income Margin expansion, having reported 62% growth in Net Income this year. We have consolidated our leadership position in the Infrastructure Management Services and verticals like Financial Service and Lifesciences & Healthcare," said Anant Gupta, President & CEO, HCL Technologies.
"Backed by another strong quarter, we closed our Financial Year on a positive note. Our Net Income margin expanded by 400 bps and touched a five year high of 16%. Our Return on Equity for the year has been 34% which is amongst the best in the industry. EBITDA to Free Cash Flow conversion has been at a healthy 68%," said Anil Chanana, CFO, HCL Technologies.
Jindal Steel & Power's (JSPL) consolidated net profit rose 28.27% to Rs 494.28 crore on 2.65% decline in total income to Rs 4593.55 crore in Q1 June 2013 over Q1 June 2012. The result was announced after market hours on Tuesday, 30 July 2013.
JSPL's board of directors at a meeting held on Tuesday, 30 July 2013, inter alia, has authorized sub-committee of board of directors of the company to examine a buy-back of shares from the existing shareholders of the company and to seek or cause to be sought requisite clarifications, consents and approvals (including without limitation, from the lenders to the company), and to accordingly provide their recommendations in this regard to the board of directors for further consideration and evaluation and for taking such formal decision or action as the board of directors may deem fit, pursuant to applicable laws, market conditions and other relevant considerations.
IT stocks will be watched after the rupee weakened sharply below the psychological 60 per dollar mark on Tuesday, 30 July 2013. The currency settled at 60.49 per dollar, down 1.76% from the previous close of 59.42. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
Shares of public sector oil marketing companies (PSU OMCs) will also be in the spotlight as the falling rupee increases costs of importing oil. PSU OMCs import about 70-75% of their crude oil needs and rely heavily on foreign currency borrowings, which largely remain unhedged.
Indian Oil Corporation (IOC) will be in focus on media reports that the cabinet is likely to consider the proposal for sale of 10% of government's stake in IOC today, 31 July 2013.
Marico said its shareholders approved the proposed scheme of arrangement between the company and Marico Kaya Enterprises. The shareholders also approved the utilization of Securities Premium Account of Marico in order to adjust the difference, being the excess of book value of assets over the book value of liabilities of the Kaya Business of Marico being demerged into Marico Kaya Enterprises. A special resolution was duly passed approving the same.
Andhra Bank, Bharti Airtel, Chambal Fertilisers & Chemicals, HCL Technologies, ICICI Bank, Jagran Prakashan, JSW Steel, Karnataka Bank, NHPC, Petron Engineering Construction, Piramal Life Sciences, Religare Enterprises and Tata Investment Corporation will unveil April-June 2013 results on Wednesday, 31 July 2013.
Petronet LNG's net profit declined 16.81% to Rs 225.32 crore on 19.87% growth in total income to Rs 8459.44 crore in Q1 June 2013 over Q1 June 2012. The result was announced after market hours on Tuesday, 30 July 2013.
IFCI's net profit fell 41.12% to Rs 55.11 crore on 15.76% decline in total income to Rs 561.53 crore in Q1 June 2013 over Q1 June 2012. The result was announced after market hours on Tuesday, 30 July 2013.
NTPC's board of directors at a meeting held on Tuesday, 30 July 2013, accorded the investment approval for Feroze Gandhi Unchahar Thermal Power Project (1x500 MW) to be implemented in Uttar Pradesh at an appraised current estimated cost of Rs 3363.12 crore.
State-run National Fertilizers will be watched as the Government of India (GoI) announced its plan to sell approximately 7.64% of the total paid-up equity share capital in the state-run company through an offer for sale (OFS) of 3.74 crore equity shares of face value of Rs 10 each of the company. The OFS would take place on a separate window of Stock Exchanges today, 31 July 2013, from 9:15 IST to 15:30 IST. The floor price for the OFS has been fixed as Rs 27 per share. The GoI currently holds 97.64% stake in National Fertilizers. On successful completion of OFS, the GoI's stake in the company would come down to 90% thereby adhering to Sebi's minimum public shareholding rule of 10% in public firms by 8 August 2013.
Grasim Industries turns ex-dividend today, 31 July 2013, for dividend of Rs 22.50 per share for the year ended 31 March 2013 (FY 2013).
Nestle India turns ex-dividend today, 31 July 2013, for interim dividend of Rs 18 per share for the year ending 31 December 2013.
Speciality Restaurants turns ex-dividend today, 31 July 2013, for dividend of Re 1 per share for the year ended 31 March 2013 (FY 2013).
Market may edge lower in early trade
The market may edge lower in early trade tracking mostly down Asian stocks. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could fall 16 points at the opening bell.
Bharti Airtel, HCL Technologies, ICICI Bank, and JSW Steel will unveil April-June 2013 quarter results today, 31 July 2013.
Jindal Steel & Power's (JSPL) consolidated net profit rose 28.27% to Rs 494.28 crore on 2.65% decline in total income to Rs 4593.55 crore in Q1 June 2013 over Q1 June 2012. The result was announced after market hours on Tuesday, 30 July 2013.
JSPL's board of directors at a meeting held on Tuesday, 30 July 2013, inter alia, has authorized Sub Committee of board of directors of the company to examine a buy-back of shares from the existing shareholders of the company and to seek or cause to be sought requisite clarifications, consents and approvals (including without limitation, from the lenders to the company), and to accordingly provide their recommendations in this regard to the board of directors for further consideration and evaluation and for taking such formal decision or action as the board of directors may deem fit, pursuant to applicable laws, market conditions and other relevant considerations.
NTPC's board of directors at a meeting held on Tuesday, 30 July 2013, accorded the investment approval for Feroze Gandhi Unchahar Thermal Power Project (1x500 MW) to be implemented in Uttar Pradesh at an appraised current estimated cost of Rs 3363.12 crore.
Petronet LNG's net profit declined 16.81% to Rs 225.32 crore on 19.87% growth in total income to Rs 8459.44 crore in Q1 June 2013 over Q1 June 2012. The result was announced after market hours on Tuesday, 30 July 2013.
IFCI's net profit fell 41.12% to Rs 55.11 crore on 15.76% decline in total income to Rs 561.53 crore in Q1 June 2013 over Q1 June 2012. The result was announced after market hours on Tuesday, 30 July 2013.
Grasim Industries turns ex-dividend today, 31 July 2013, for dividend of Rs 22.50 per share for the year ended 31 March 2013 (FY 2013).
Nestle India turns ex-dividend today, 31 July 2013, for interim dividend of Rs 18 per share for the year ending 31 December 2013.
The Government of India (GoI) has intimated to the stock exchanges its intention to offload stake aggregating to approximately 7.64% of the total paid-up equity share capital in National Fertilizers through an offer for sale (OFS) of 3.74 crore equity shares of face value of Rs 10 each of the company. The OFS would take place on a separate window of Stock Exchanges on Wednesday, 31 July 2013, from 9:15 IST to 15:30 IST. The floor price for the OFS has been fixed as Rs 27 per share. The GoI currently holds 97.64% stake in National Fertilizers. On successful completion of OFS, the GoI's stake in the company would come down to 90% thereby adhering to Sebi's minimum public shareholding rule of 10% in public firms by 8 August 2013.
Meanwhile, the ruling Congress party approved on Tuesday the creation of a new Telangana state, a move that has revived deep political divisions and raised fears of violence in the area, home to global firms including Google. The decision to break up Andhra Pradesh and establish Telangana comes ahead of elections next year.
Key benchmark indices dropped for fifth day in a row on Tuesday, 30 July 2013 after the Reserve Bank of India (RBI) kept its key lending rate viz. the repo rate steady after a monetary policy review, as the central bank focused on managing the currency volatility rather than pushing for growth. The S&P BSE Sensex lost 244.94 points or 1.25% to 19,348.34 on that day, its lowest closing level since 10 July 2013.
Foreign institutional investors (FIIs) bought shares worth a net Rs 256.45 crore on Tuesday, 30 July 2013, as per provisional data from the stock exchanges.
Asian stocks fell on Wednesday before US economic growth data and the conclusion of a Federal Reserve policy meeting today, 31 July 2013. Key benchmark indices in Japan, Singapore, South Korea, Indonesia and Taiwan fell by 0.16% to 0.69%. Key benchmark indices in Hong Kong and China rose by 0.31% to 0.95%.
Meanwhile, the results of two separate surveys on Chinese manufacturing activity in July are due tomorrow, 1 August 2013.
Taiwan's economy expanded at a faster-than-estimated pace in the second quarter as domestic consumption improved, even as a slowdown in China damps the outlook for the island's exports. Gross domestic product rose 2.27% from a year earlier after increasing 1.67% in the first quarter, the statistics bureau said in a preliminary report in Taipei today.
US stocks closed mixed to higher on Tuesday in quiet trading as many investors remained on the sidelines ahead of the Federal Reserve's Wednesday announcement on interest rates and monetary policy.
The Federal Open Market Committee's (FOMC) two-day policy meeting ends today, 31 July 2013, with expectations that it will offer further clues on how long it will maintain its bond purchases. In his two-day testimony to Congress, which concluded on 18 July 2013, Federal Reserve Chairman Ben Bernanke said plans to taper asset purchases were not on a preset path and stressed intentions to be very responsive to data. Additionally, Bernanke said recent data have been "mixed" and it was "way too early" to make a judgment on when the central bank will slow down the pace of its asset purchases. The Fed currently buys $85 billion a month in government and mortgage bonds in an effort to keep interest rates low and stimulate economic growth.
In Europe, the European Central Bank (ECB) and the Bank of England (BoE) will announce their policy decisions tomorrow, 1 August 2013.
Monday, July 29, 2013
Daily News Roundup - July 29 2013
Emami Ltd is scouting for acquisitions to strengthen its market position, for which it is ready to use cash reserves of Rs3bn and leverage its borrowing potential, according to company Managing Director Sushil K Goenka. (ET)
Woodland is aiming to take its turnover to Rs10bn this fiscal as it expands its retail presence in the country and adds more products to its portfolio. (ET)
Dena Bank said it has sought Rs20bn capital infusion from the Central government to support its future loan growth as the tier-I capital of the Bank fell below 8 % by the end of June quarter, a top official said. (ET)
Tata Power has sought "certain waivers" from lenders to ensure further disbursements of loans to the 4,000 MW Mundra plant, the country's first operational ultra mega power project. (ET)
Tata Steel, has set its sights on the Indian iron ore assets of one of Britain's largest independent steel trading companies - Stemcor. (ET)
After securing approval of the Madras High Court, Vedanta Resources is now hoping to complete the much-delayed merger of Sesa Goa and Sterlite Industries within a month after getting a favourable verdict from the Bombay High Court as well, a senior company official said (ET)
The consortium of 27 banks has deferred plans to recast Rs 70bn loan extended to the troubled Electrosteel Steels due to differences over terms of the proposal, including fresh capital infusion and corporate guarantee that promoters are supposed to bring to the table. (ET)
Walmart has stopped its lobbying with US lawmakers on India-specific issues, after continuously seeking their support for about five years to facilitate its entry into the high-growth Indian market. (BS)
SpiceJet is in advanced stage of discussion with a potential investor for stake sale and expects the negotiations to be concluded soon. (BS)
The Odisha Power Generation Corporation (OPGC), a joint venture between the Odisha government and the US based utility major AES, has kick started its 2 X 660 Mw expansion project, comprising unit 3 and 4 of its 420 Mw Ib Valley power complex, with the issue of work order in favour of BHEL and BGR Energy Systems ltd. (BS)
The Securities and Exchange Board of India has said that Jet Airways and Etihad Airways should enter into a Commercial Cooperation Agreement only after culmination of the Shareholder Agreement as the former appears to give an "upper hand" to Etihad on commercial matters and was also one of the conditions for making investments. (BL)
Sundram Fasteners, plans to spend Rs1bn this year on expanding capacities and developing new products. (BL)
Lack of demand for electricity may impact viability of the upcoming 2X300 MW Chandrapur thermal power station of CESC Ltd. (BL)
Economy Snippets
The government has received a Rs17.7bn investment proposal from a domestic company for the manufacturing of telecom products.(ET)
Production of pulses might reach another record in 2013-14, as sowing of the crop this kharif season has been 80 % more than in the same period last year.(BS)
Caution ahead of policy; weak start
"A policy is a temporary creed liable to be changed, but while it holds good it has got to be pursued with apostolic zeal." - Mahatma Gandhi
The market will look more at what the central bankers have to say in the coming days not just in India but in many parts of the world. The RBI will meet with bankers and announce its First Quarter Review of Monetary Policy Statement tomorrow.
The Federal Open Market Committee is expected to release a statement on Wednesday after a two-day meeting. The European Central Bank and Bank of England also meet this week.
The opening is set to be weak to begin with. The market may trade in a range ahead of the policy meet. Investors will be keen to hear about when some of the measures taken by RBI may be reversed. There are no indications of these happening in a hurry given the mixed data emerging on the economic front.
Besides results like Sesa Goa and Colgate Palmolive which will be announced today, Wipro and HUL will also be in focus. Wipro announced a PAT of Rs16.23bn, up 3% QoQ. The net sales for the quarter is at Rs97.33bn.
A lot of attention could be on the FIPB meet which will consider 32 FDI proposals, including Jet-Etihad deal. Jet is also set to take off on reports of the deal going through. Meanwhile, Sebi has reportedly stated that Jet Airways and Etihad Airways should enter into a Commercial Cooperation Agreement only after culmination of the Shareholder Agreement as the former appears to give an "upper hand" to Etihad on commercial matters and was also one of the conditions for making investments.
US stocks ended marginally higher on Friday. Asian markets are weak. Japan's Nikkei 225 is down over 2% while Hong Kong's Hang Seng index is 0.7% lower. South Korea's Kospi index is marginally down while China's Shanghai index was trading over a percent lower.
Emami Ltd could be in action on reports that it is scouting for acquisitions to strengthen its market position.
Samsung Electronics Co Ltd sold 76 mn smartphones in the second quarter, according to Strategy Analytics.
Results watch: Sesa Goa, Colgate Palmolive, Ajanta Pharma, MCX, Merck, IDFC, Network18 Media, 3I Infotech, ESHAMEDIA, Bharti Infratel, Allahabad Bank, Arvind, ASM Tech, Ahmedabad Steel, Banco Products, City Union Bank, Indian Bank, Gujarat Auto, JPINFRATEC, Jay Shree Tea, MAH HOLIDAY, Madras Cements, Jindal South, Geometric, Marksans Pharma, Morarjee Tex, NEPC Textiles, Patspin India, Prestige Estates, Ramco Systems, Sakuma Exports, Shantivijay Jew, Soma Textiles, Syndicate Bank, Subros, TECIL Chemicals, Tinplate Co, TV18 Broadcast, Ushdev Intl, Welcure Drugs, Zenith Fibres, Zuari Agro, Ushdev Intl.
Trends in FII flows: The FIIs were net buyers of Rs2.78bn in the cash segment on Friday, while the domestic institutional investors (DIIs) were net sellers of Rs4.89bn, as per the provisional figures released by the NSE.
The foreign funds were net buyers of Rs3.68bn in the cash segment on Thursday, according to the SEBI figures.
Global Data Watch: Bank of Japan Governor Kuroda Speech JPY, BoJ's Governor Toshihiko Fukui Speech JPY, Business Confidence (Jul) EUR, M4 Money Supply (MoM) (Jun) GBP GBP, M4 Money Supply (YoY) (Jun) GBP, Mortgage Approvals (Jun) GBP, Net Lending to Individuals (MoM) (Jun) GBP, Consumer Credit (Jun) GBP, Producer Price Index (YoY) (Jun) EUR, Wage Inflation (MoM) EUR, Wage Inflation (YoY) EUR, CBI Distributive Trades Survey - Realized (MoM) (Jul) GBP, Pending Home Sales (MoM) (Jun) USD, Pending Home Sales (YoY) (Jun) USD, Dallas Fed Manufacturing Business Index (Jul) USD, Loan Officer Survey USD, 3-Month Bill Auction USD, 6-Month Bill Auction USD, Building Permits s.a. (MoM) (Jun) NZD, Jobs/applicants ratio (Jun) JPY, Unemployment Rate (Jun) JPY, Overall Household Spending (YoY) (Jun) JPY, Industrial Production (MoM) (Jun)Preliminar JPY, Industrial Production (YoY) (Jun)Preliminar JPY
In other news in the media:
Woodland is aiming to take its turnover to Rs10bn this fiscal as it expands its retail presence in the country and adds more products to its portfolio. (ET)
Dena Bank said it has sought Rs20bn capital infusion from the Central government to support its future loan growth as the tier-I capital of the Bank fell below 8 % by the end of June quarter, a top official said. (ET)
Tata Power has sought "certain waivers" from lenders to ensure further disbursements of loans to the 4,000 MW Mundra plant, the country's first operational ultra mega power project. (ET)
Tata Steel, has set its sights on the Indian iron ore assets of one of Britain's largest independent steel trading companies - Stemcor. (ET)
After securing approval of the Madras High Court, Vedanta Resources is now hoping to complete the much-delayed merger of Sesa Goa and Sterlite Industries within a month after getting a favourable verdict from the Bombay High Court as well, a senior company official said (ET)
The consortium of 27 banks has deferred plans to recast Rs 70bn loan extended to the troubled Electrosteel Steels due to differences over terms of the proposal, including fresh capital infusion and corporate guarantee that promoters are supposed to bring to the table. (ET)
Walmart has stopped its lobbying with US lawmakers on India-specific issues, after continuously seeking their support for about five years to facilitate its entry into the high-growth Indian market. (BS)
SpiceJet is in advanced stage of discussion with a potential investor for stake sale and expects the negotiations to be concluded soon. (BS)
The Odisha Power Generation Corporation (OPGC), a joint venture between the Odisha government and the US based utility major AES, has kick started its 2 X 660 Mw expansion project, comprising unit 3 and 4 of its 420 Mw Ib Valley power complex, with the issue of work order in favour of BHEL and BGR Energy Systems ltd. (BS)
Sundram Fasteners, plans to spend Rs1bn this year on expanding capacities and developing new products. (BL)
Lack of demand for electricity may impact viability of the upcoming 2X300 MW Chandrapur thermal power station of CESC Ltd. (BL)
The government has received a Rs17.7bn investment proposal from a domestic company for the manufacturing of telecom products.(ET)
Production of pulses might reach another record in 2013-14, as sowing of the crop this kharif season has been 80% more than in the same period last year.(BS)
Market may open flat
Trading of CNX Nifty futures on the Singapore stock exchange indicates a flat opening on the domestic bourses today, 29 July 2013. Jaiprakash Associates, IDFC, Sesa Goa, and UltraTech Cement unveil April-June 2013 quarter results today, 29 July 2013.
Reliance Industries (RIL) said on Saturday, 27 July 2013, that it has inked a memorandum of understanding (MoU) with ONGC to explore the possibility of sharing RIL's infrastructure facility in the East Coast. The MoU aims at working out the modalities for sharing of infrastructure, identifying additional requirements as well as firming up the commercial terms. This shall not only minimise ONGC's initial capital expenditure but also expedite its field development, resulting in early monetization of its deep water fields adjacent to the fields of RIL. The companies intend to enter into a definitive agreement after concluding a joint study which will be spread over the next nine months, RIL said in a statement.
Wipro's consolidated net profit rose 3% to Rs 1623.30 crore on 1% growth in revenue to Rs 9734.60 crore in Q1 June 2013 over Q4 March 2013. The results are as per International Financial Reporting Standards. The results are after adjusting for the spinoff of its non-technology businesses, completed in April.
IT services revenue rose 0.2% to $1.58 billion in Q1 June 2013 over Q4 March 2013. Non-GAAP constant currency IT services revenue in dollar terms was $1.60 billion, which was within the company's guidance range of $1.575 billion to $1.61 billion.
Wipro said that the pricing environment was largely stable during the quarter, and the growth was largely volume led. Effective from 1 June 2013, Wipro gave annual wage hike of between 6-8% for offshore employees and 2-3% for onsite employees.
Wipro expects 1.99% to 3.88% growth in revenue from IT services business at between $1.62 billion to $1.65 billion in Q2 September 2013 over Q1 June 2013.
Wipro added 28 new customers in Q1 June 2013.
Commenting on the first quarter results, Wipro Chairman Azim Premji said: "We are seeing higher confidence among our clients on the backdrop of positive macroeconomic developments, particularly in the US."
T K Kurien, Executive Director & Chief Executive Officer of Wipro said: "We are seeing a pickup in large deal closures which has reflected in strong order book in the current quarter. Our clients look to technology to pursue growth and profitability and increase organizational agility."
Suresh Senapaty, Executive Director & Chief Financial Officer of Wipro, said: "Our investments in client mining have shown benefits with strong growth in our top clients. We have given wage hikes for both onsite and offshore employees effective June 2013, which has impacted our operating margins in the quarter."
TCS turns ex-dividend today, 29 July 2013, for interim dividend of Rs 4 per share for the year ended 31 March 2013 (FY 2013).
Shares of state-run coal miner Coal India (CIL), state-run power generation major NTPC and other power generation companies will be in focus after the Ministry of Coal on Friday, 26 July 2013, said that CIL has signed 82 fuel supply agreements (FSAs) until 25 July 2013 with power stations with a capacity of 34,793 megawatts (MW). This includes 16 power stations belonging to NTPC and its joint venture companies (JVs). Eleven more FSAs are ready to be signed shortly with NTPC or its JVs, while another 23 FSAs with state and private sector entities are in the pipeline, the coal ministry said. These FSAs were part of the 131 FSAs for a capacity of 60,678 MW which CIL was directed to sign in February 2012. This will substantially increase the power generation during the current and subsequent years, the coal ministry said.
In yet another fillip to the power sector, the Ministry of Coal has issued another Presidential Directive to CIL on 17 July 2013 for signing of FSAs for a capacity of 78,000 MW, higher than the earlier 60,678 MW. This will not only increase the power generation further but will also fast track several power projects which are under development, the coal ministry said.
FMCG and agri-sector stocks will be in focus after the latest data showed a further pick-up in sowing of kharif crops. The Centre on Friday, 26 July 2013, said that as per reports received from state governments, the total sown area in the country stands at 747.78 lakh hectare (lh) as on 26 July 2013, compared with 635.05 lh at this time last year. FMCG firms derive substantial sales from rural India.
Area coverage under oilseeds, particularly in groundnut and soybean, is higher compared to the previous kharif season due to timely onset of monsoon and widespread distribution of rainfall in oilseeds growing regions. Pulses sown area has increase by 90% compared to last year.
Dr Reddys Laboratories announced on Saturday, 27 July 2013, that it has launched a drug for the treatment of dementia of the Alzheimer's type. The drug is a therapeutic equivalent generic version of ARICEPT. ARICEPT had US sales of approximately $92.6 million for twelve months ended May 2013, according to IMS Health data.
Lupin turns ex-dividend today, 29 July 2013, for dividend of Rs 4 per share for the year ended 31 March 2013 (FY 2013).
Lanco Infratech said it has initiated the process of Corporate Debt Restructuring (CDR) prescribed under the Reserve Bank of India (RBI) guidelines by way of reference to CDR Cell. The proposal is only for Lanco Infratech on standalone basis and not for any of its subsidiaries. CDR is a mechanism adopted in India which permits viable companies additional time to meet debt obligations, subject to certain terms and conditions.
Nestle India's net profit rose 10.3% to Rs 271.38 crore on 11.4% growth in net sales to Rs 2213.21 crore in Q2 June 2013 over Q2 June 2012. The result was announced after market hours on Friday, 26 July 2013.
Nestle India's net domestic sales rose 9.2% year on year (YoY) in Q2 June 2013, mainly on account of net realisations and volume growth in certain product categories. Export sales grew 46.9% mainly due to exports to affiliates. Net profit during the quarter was impacted due to the rise in depreciation costs over a year ago due to expansion in production capacities over the last year and amortization of capitalised borrowing costs. Depreciation costs surged 31.7% to Rs 88.66 crore in Q2 June 2013 over Q2 June 2012. Finance costs have reduced over last year mainly due to a Government notification effective September 2012 that treats all exchange differences on long term foreign currency borrowings for fixed assets as capital expenditure (capex). Interest costs declined 38.7% to Rs 8.51 crore YoY in Q2 June 2013. Tax expense rose 23% YoY during the quarter to Rs 133.42 crore, mainly due to the change in income-tax surcharge from 5% to 10% effective 1 April 2013.
During the quarter, there was no additional drawdown of loan from Nestle SA under the external commercial borrowing (ECB) approval from Reserve Bank of India (RBI). The total amount outstanding on this account continues to be $192 million since June 2012. Its annualised cost over the loan period since inception, including interest and unrealised exchange difference is 19%, Nestle India said.
Commenting on the company's Q2 results, Mr. A Helio Waszyk, CMD, Nestle India said: "I am satisfied that we have yet another quarter of double digit growth with healthy profitability. Key businesses including Noodles, Coffees, and Nutrition are doing well and the launch of ALPINO is an additional step in the premiumisation of our portfolio. Given the challenging environment, there is more work to be done in some businesses and I am confident that the team is well aligned and capable of delivering growth consistent with the economic environment".
Nestle India's board of directors at a meeting held on Friday, 26 July 2013, declared interim dividend of Rs 18 per share for the year ending 31 December 2013.
Prime Minister Dr. Manmohan Singh will meet the captains of Indian industry today, 29 July 2013, to review steps to revive the economy. The discussion will cover measures to correct the Current Account Deficit, measures to revive industrial growth, depreciation of the rupee and its impact on trade and industry, skill development and ways of accelerating it and development of the Delhi-Mumbai Industrial Corridor (DMIC), the Chennai-Bangalore Industrial Corridor (CBIC), and the Amritsar-Delhi-Kolkata Industrial Corridor (ADKIC).
Key benchmark indices edged lower in volatile trade on Friday, 26 July 2013, after the latest batch of Q1 results disappointed investors. The S&P BSE Sensex lost 56.57 points or 0.29% to settle at 19,748.19 on that day, its lowest closing level since 11 July 2013.
Foreign institutional investors (FIIs) bought shares worth a net Rs 278.04 crore on Friday, 26 July 2013, as per provisional data from the stock exchanges.
Asian stocks fell on Monday before a speech by Bank of Japan Governor Haruhiko Kuroda and monetary policy reviews from the US to Europe this week. Key benchmark indices in South Korea, Singapore, Indonesia, Taiwan and Japan were off 0.3% to 2.26%
Mainland Chinese and Hong Kong stocks retreated amid lingering economic worries, with sentiment weighed by official data released over the weekend showing profits at Chinese industrial firms slowed in June. The Shanghai Composite index was off 1.38. In Hong Kong, the Hang Seng was off 0.55%. Data released over the weekend by the National Bureau of Statistics showed profits at industrial companies rose 6.3% in June from the year-earlier month, slowing sharply from a 15.5% increase in May, according to reports.
Japanese retail sales rose 1.6% from a year earlier in June, figures today showed, which was below the market expectations.
US stocks inched higher on Friday, 26 July 2013, to end the week virtually flat, as investors digested earnings reports and prepared for a busy economic calendar in the week ahead.
On the economic front, US consumer confidence unexpectedly rose at the end of this month, according to the Thomson-Reuters/University of Michigan's consumer-sentiment index.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on Tuesday (30 July 2013) and Wednesday (31 July 2013), after which it will release a statement on central bank policy. In his two-day testimony to Congress, which concluded on 18 July 2013, Federal Reserve Chairman Ben Bernanke said plans to taper asset purchases were not on a preset path and stressed intentions to be very responsive to data. Additionally, Bernanke said recent data have been "mixed" and it was "way too early" to make a judgment on when the central bank will slow down the pace of its asset purchases. The Fed currently buys $85 billion a month in government and mortgage bonds in an effort to keep interest rates low and stimulate economic growth.
The European Central Bank (ECB) and the Bank of England (BoE) will announce their policy decisions on Thursday, 1 August 2013.
Sunday, July 28, 2013
Thursday, July 25, 2013
Rollover time: swings later in the day
In a minute there is time for decisions and revisions which a minute will reverse. - T S Eliot
Volatility is a given as the rollovers take place today. The outlook is weak given the subdued global cues. Some buying could set in towards the end but runaway gains are unlikely.
The banking counters may see some value buying after eight of the 13 major bank stocks slumped at least 5 percent on Wednesday.
Indian Oil Corporation could see some action as the Cabinet is likely to consider the proposal for sale of 10% stake in the company.
The rupee ended stronger at 59.15 against the dollar.
Container Corp of India will consider a bonus share issue today.
Cement counters are likely to see some action a Swiss cement major Holcim is set to increase its stake in Ambuja Cements from 50.55% to 61.39%. Ambuja, in turn, will buy Holcim’s stake in ACC.
ITC, ACC, Maruti Suzuki, Piramal Ent, Tara Jewels Bata India, Gail India, Mahindra & Mah Fin are the major results to look out for on Thursday
Asian markets are mostly lower. Japan's Nikkei 225 and Hong Kong's Hang Seng index were half a percent lower each. South Korea's Kospi index is marginally up while China's Shanghai index is flat.
A day after closing at peaks, Dow and S&P 500 slipped slightly on Wednesday, dragged down by Caterpillar, Broadcom and AT&T. All three delivered results short of Wall Street's forecasts. Caterpillar also lowered its earnings and sales outlook for the year, which sent its stock 2.4% lower. It was the biggest loser in Dow.
A tech stock rally powered by Apple's better-than-expected earnings limited the fall in US stocks on Wednesday. Apple rose 5% which helped Nasdaq end in the green zone.
The Commerce Department said new home sales rose to a five-year high, with an annual rate of 497,000 in June, up 8.3% from May.
Data later today is expected to show Britain's economy expanded at a faster pace in the second quarter.
Results watch: Maruti Suzuki, ITC, Biocon, Gail India, ACC, Strides Arco, Kalpataru Power, Thermax, Kansai Nerolac, Balaji Amin, Bata India, Container Corp, Emco, FAG Bearings, Bervin Invest, Bharat Bijlee, BF Invest, Granules India-, Jayant Agro, MRF, Muthoot Fin, NAVIN FLUORI, Gujarat State Fin, Mahindra & Mah Fin, Piramal Ent, Pricol, Shriram City Uni, SKS Microfinance, Torrent Power, THINKSOFT, Sterling Hol Res, TCI Developers, TTK Healthcare, Zee Entert, WPIL, Wendt India, Transport Corp.
Trends in FII flows: The FIIs were net sellers of Rs4.04bn in the cash segment on Wednesday, while the domestic institutional investors (DIIs) were net sellers of Rs3.28bn, as per the provisional figures released by the NSE.
The foreign funds were net buyers of Rs2.73bn in the cash segment on Tuesday, according to the SEBI figures.
Global Data Watch: Nationwide Housing Prices n.s.a (YoY) (Jul) GBP, Nationwide Housing Prices s.a (MoM) (Jul) GBP, Unemployment Survey (Q2) EUR, M3 Money Supply (3m) (Jun) EUR, M3 Money Supply (YoY) (Jun) EUR, Private loans (YoY) (Jun) EUR, IFO - Current Assessment (Jul) EUR, IFO - Business Climate (Jul) EUR, IFO - Expectations (Jul) EUR, Consumer Confidence (Jul) EUR, Gross Domestic Product (QoQ) (Q2)Preliminar GBP, Gross Domestic Product (YoY) (Q2)Preliminar GBP, Index of Services (3M/3M) (May) GBP, 30-y Bond Auction EUR, 10-y Bond Auction EUR, Durable Goods Orders (Jun) USD, Durable Goods Orders ex Transportation USD, Initial Jobless Claims (Jul 19) USD, Continuing Jobless Claims (Jul 13) USD, EIA Natural Gas Storage change (Jul 19) USD, Kansas Fed manufacturing activity (Jul) USD, National Consumer Price Index (YoY) (Jul) JPY, National CPI Ex Food, Energy (YoY) (Jul) JPY, National CPI Ex-Fresh Food (YoY) (Jul) JPY, Tokyo Consumer Price Index (YoY) (Jul) JPY, Tokyo CPI ex Food, Energy (YoY) (Jul) JPY, Tokyo CPI ex Fresh Food (YoY) (Jul) JPY.
In other news in the media
Cairn India is planning a capex of Rs160bn for finding and producing more oil over the next three years through the end of FY 2016. (BL)
Fortis Healthcare plans to raise up to US$43.5mn through various instruments, including issue of Foreign Currency Convertible Bonds in Singapore. (BL)
The Telecom Disputes Settlement and Appellate Tribunal stayed the Rs6.5bn penalty on Bharti Airtel for allegedly violating the subscriber local dialing norms between 2002 and 2005. (BS)
Jindal Power, a subsidiary of Jindal Steel and Power, has tied up Rs54bn in loans for two units of its upcoming 2,400- Mw generation plant in Chhattisgarh. (BS)
SpiceJet will fill by the first week of August the posts of chief executive officer and chief commercial officer (CCO), left vacant by the resignations of Neil Mills and Harish Moideen Kutty. (ET)
GVK Oil and Gas, will go slow on investing further into the development of seven deep-water blocks it has on the West Coast due to inordinate delay in getting government clearances. (ET)
Tata Consultancy Services has completed the acquisition of French enterprise solutions provider Alti, a move that will help the company to expand its reach in Europe. (ET)
NTPC will invest Rs89bn to develop its own mines and cut the share of imported coal in its total consumption to 10% in three years from 21% despite a near 40% rise in generation capacity.(ET)
Oriental Bank of Commerce hikes some deposit rates for term deposits of less than Rs10mn under various maturities from 91 days to less than a year. (BL)
Bharti Airtel’s high capacity terrestrial optical fibre link between India and Bangladesh has become operational. (BL)
The Central Board of Excise and Custom said car models, which are known as sedans, will attract 27% excise duty, as applicable to large cars and not 30%, as announced in the Budget. (BL)
The Heavy Industries Ministry has written to the Finance Ministry seeking an additional 5% import duty on power equipment. At present, there is 21% duty on such equipment. (BL)
FIIs in buying mode
Net inflow of Rs 220.60 crore on 23 July 2013
Foreign institutional investors (FIIs) bought shares worth net Rs 220.60 crore on Tuesday, 23 July 2013, compared with net outflow of Rs 380.70 crore on Monday, 22 July 2013.
The net inflow of Rs 220.60 crore on Tuesday, 23 July 2013, was a result of gross purchases of Rs 2525.70 crore and gross sales of Rs 2305.10 crore. The entire net inflow of Rs 220.60 crore pertained to secondary equity market transactions. The S&P BSE Sensex had jumped 143.01 points or 0.71% to settle at 20,302.13 on that day, its highest closing level since 4 January 2011.
FIIs have sold shares worth net Rs 5765.70 crore in July 2013 so far (till 23 July 2013). FIIs sold shares worth Rs 11026.90 crore in June 2013.
FIIs have purchased shares worth a net Rs 66412.70 crore in 2013 so far (till 23 July 2013). FIIs bought shares worth a net Rs 128359.80 crore in calendar 2012.
There are a total of 1,756 foreign funds registered with the Securities & Exchange Board of India.
Market may open lower on weak Asian stocks
The market may start the day's trade lower tracking weakness in Asian stocks. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could fall 33 points at the opening bell. The market may remain volatile today, 25 July 2013, as traders roll over positions in the futures & options (F&) segment from the July 2013 series to August 2013 series. The near month July 2013 derivatives contracts expire today, 25 July 2013.
ACC, GAIL (India), ITC, Maruti Suzuki (India) and Sterlite Industries unveil quarterly results today, 25 July 2013.
Two-wheeler major Hero MotoCorp after trading hours on Wednesday, 24 July 2013, reported 10.86% decline in net profit to Rs 548.58 crore on 1.25% decline in total income to Rs 6271.78 crore in Q1 June 2013 over Q1 June 2012. The company said the net profit declined due to higher tax rate on account of the expiry of 5 years (April 2008-March 2013) of 100% exemption in Haridwar, where the largest-producing manufacturing plant of the company is located. With the expiry of the tax benefit, the tax liability of the company went up to 26.9% in Q1 June 2013, from 16.3% from Q1 June 2012. The decline in net profit is also reflective of the newly-levied higher surcharge in the Finance Bill 2013, Hero MotoCorp said in statement.
Commenting the first quarter results, Mr. Pawan Munjal, MD and CEO, Hero MotoCorp said: "The fact that our profit before tax has surpassed the previous as well as the corresponding quarter, despite a marginal de-growth in our volumes during the quarter and the overall economic downturn, is a strong statement of our intent and vision. Our operating profit has also improved compared to the previous and the corresponding quarter. We are determined to sustain the trajectory of positive momentum in the coming quarters as well. Q1 of this fiscal was an action-packed quarter for us when we rolled out a slew of innovative initiatives including the 'industry-first' five-year warranty on our entire range of products and our own dedicated retail financing arm. We continued to grow ahead of the industry in both scooters and 125cc motorcycles this quarter, thereby building further on our market share gain in these segments. We had a record month in May, with our highest ever dispatches in a month. Retails also kept pace with record 1.1 million-plus retail sales in April-May -- the highest-ever retails in a non-festival period. Heavy and early rains in June have slowed down the momentum a bit, but we are optimistic about growth in the second half of the fiscal. Our product launches that are planned around the festive season should contribute towards accelerating growth. On the new market front, after entering Central America and Africa, we are now geared-up for Latin American markets of Peru and Ecuador which should be in the month of August".
Oil exploration firm Cairn India's consolidated net profit fell 18% to Rs 3127 crore on 8% decline in revenue to Rs 4063 crore in Q1 June 2013 over Q1 June 2012. The company announced Q1 result after market hours on Wednesday, 24 July 2013.
Cairn India reports revenue net of profit-sharing with the government in all blocks and Rajasthan block royalty expense. During the quarter, the profit petroleum pay-out to the government rose from 20% to 30% in the DA1 in the Rajasthan block. The gross cumulative Rajasthan development capital expenditure as on 30 June 2013 was $3.9 billion, of which $107 million was spent in Q1 June 2013 including $19 million in DA 2.
Cairn India said it achieved highest ever gross operated production of 212,442 barrels of oil equivalent per day (boepd) in Q1 June 2013. The company achieved record average daily production of 173,517 boepd for Rajasthan block during the quarter.
Commenting on the first quarter results, Mr. Elango P, Whole time Director, Cairn India said: "I am very pleased to report that we are once again delivering robust operational and financial results with the company achieving its highest ever gross operated daily production. We continue to generate substantial cash flow from one of the lowest cost producing assets in the world and are well placed to deliver success from our $3 billion capital expenditure programme. We remain focussed on driving production growth from our core Rajasthan asset and delivering positive results from our extensive exploration and appraisal program. We remain particularly excited by the deep gas prospects and welcome the recent Government decision on gas pricing that will encourage higher investments in exploration and the development of gas discoveries. We expect the government to come out with a policy on Integrated Development Plan that will help in reducing the time from discovery to production".
Swiss cement major Holcim on Wednesday, 24 July 2013, announced a major restructuring of its India operations. The board of directors of Ambuja Cements on Wednesday, 24 July 2013, approved a proposal, wherein Ambuja will first acquire from Holderind Investments, Mauritius (Holcim), a 24% stake in Holcim India for a cash consideration of Rs 3500 crore, followed by a merger of Holcim India into Ambuja. The intra-group transaction will result in Ambuja holding 50.01% stake in ACC. The merger swap ratio proposed by two independent accounting firms and approved by Ambuja's board, is one Ambuja share for 7.4 Holcim India shares, translating into an implied swap ratio of 6.6 Ambuja shares for every ACC share, Ambuja said in a statement. Based on the approved merger ratio, Ambuja will issue 58.4 crore new equity shares of the company to Holcim, as consideration for the merger. Post the merger, the expanded capital base of Ambuja (post cancellation of the shares held by Holcim India in Ambuja and the issuance of new shares as aforesaid) will increase by 28%. Holcim will then own 61.39% of Ambuja and Ambuja in turn own 50.01% of ACC.
In addition, Ambuja's board also provided its approval for Ambuja to make commercially reasonable efforts to invest up to Rs 3000 crore to acquire an economic ownership in ACC of up to 10% without triggering a mandatory open offer.
Ambuja said that this restructuring exercise is expected to be EPS accretive from year one post completion of the transaction. There is synergy potential of about Rs 900 crore through supply chain and fixed cost optimization expected to be realised in a phased manner over two years post completion of the transaction.
Currently, Holcim owns a little over 50% stake in both Ambuja and ACC.
Meanwhile, Ambuja Cements' net profit fell 30.9% to Rs 324 crore on 8.6% decline in net sales to Rs 2346 crore in Q2 June 2013 over Q2 June 2012. The company announced Q2 result after market hours on Wednesday, 24 July 2013.
Ambuja Cements also that the board of directors of the company at its meeting held on 24 July 2013 approved setting up of a 2.17 million tonnes per annum (MTPA) greenfield clinkerization project at Marwar Mundwa, District Nagaur, Rajasthan and three clinker grinding units of 1.5 MTPA capacity each at Marwar Mundwa, Rajasthan, Dadri (phase II), Uttar Pradesh and Osara, Madhya Pradesh at an approximate cost of Rs 3500 crore.
Rural Electrification Corporation (REC) and Damodar Valley Corporation (DVC) have signed a loan agreement for funding of DVC's first 2X660 MW supercritical thermal power unit at Raghunathpur in West Bengal's Purulia district. The agreement was signed on at Kolkata recently in the presence of Mr. Rajeev Sharma, CMD, REC, Mr. R.N Sen, Chairman, DVC and other senior officials from both the organizations. The loan amount of Rs 6362 crores is to be funded solely by REC. These units will be a part of Raghunathpur Phase II expansion programme of DVC. REC provides financial assistance and promotes rural electrification projects throughout the country. It funds state electricity boards, state government departments and rural electric cooperatives for rural electrification projects.
Key benchmark indices edged lower in choppy trade on Wednesday, 24 July 2013, as the Reserve Bank of India's (RBI) latest measures to squeeze liquidity from the banking system to stem rupee's decline rattled investor sentiment. The S&P BSE Sensex lost 211.45 points or 1.04% to settle at 20,090.68 on that day, its lowest closing level since 17 July 2013.
Foreign institutional investors (FIIs) sold shares worth a net Rs 404.50 crore on Wednesday, 24 July 2013, as per provisional data from the stock exchanges.
Asian stocks fell on Thursday as investors weighed US economic data to gauge the fate of Federal Reserve stimulus. Key benchmark indices in Indonesia, Hong Kong, Singapore, Japan, and Taiwan were down by 0.07% to 0.85%. China's Shanghai Composite rose 0.36%. South Korea's Kospi was flat.
US stocks closed largely lower on Wednesday after improving home sales in the US renewed expectations that the Federal Reserve remains on course to winding down stimulus measures this year.
A report yesterday showed that new home sales rose more than forecast in June to a five-year high, and a manufacturing gauge rose. Fed Chairman Ben S. Bernanke has said asset purchases that have stoked bond and equity gains may be trimmed this year should economic risks subside. US new-home sales climbed 8.3% to an annualized pace of 497,000, the highest level since May 2008, according to Commerce Department data. The Markit Economics preliminary index of US manufacturing increased to 53.2 in July from a final reading of 51.9 a month earlier, the London-based group said.
Wednesday, July 24, 2013
Daily News Roundup - July 24 2013
Tata Motors will re-enter Australia with LCVs. The company will introduce its 4x2, 4x4, single and crew-cab variants, with Euro V Turbo diesel engines in Australia. (BL)
SpiceJet CEO Neil Mills has quit. The sources said Mills put in his papers after a recent meeting with senior airline management. (BL)
Tata Power announced that it had generated 43.386mn units of solar power from its 25 MW facility at Mithapur in Gujarat in 2012-13. (BL)
Reliance Infrastructure has completed four laning of a 52-km stretch on NH-11, from Jaipur to Reengus in Rajasthan. Collection has begun on the toll road built at a cost of about Rs5.55bn. (BL)
ONGC and its partners — Tata Petrodyne and Hindustan Oil Exploration Co will invest Rs11bn in developing an offshore block in the Gulf of Cambay, off the west coast of India. (BS)
Jindal Steel and Power will consume 25-30mn tons of iron ore a year by 2015, three times current volumes, and source most of the raw material from abroad. (BS)
Larsen and Toubro has sought shareholders nod to raise up to US$600mn through issuing securities. (BS)
JSW Steel may buy the local assets of Stemcor Holdings to gain iron ore mines. (BS)
DLF has sought shareholders’ approval to modify the company's memorandum of association for providing specific retirement benefits to directors who have made outstanding contribution to the growth of the company. (ET)
With the dynamics of the gas market changing, Petronet LNG feels that the price at which it inked a contract to buy gas from Exxon’s Gorgon project in Australia could be re-visited, for it may end up being the most expensive gas the country has ever imported. (BL)
Economy Snippets
RBI said banks would be permitted to borrow under the liquidity adjustment facility only up to 0.5% (lowered from 1%) of their net deposits and time liabilities at the benchmark interest rate of 7.25%. (BS)
RBI has tightened rules on the cash reserve ratio. Now, banks will have to hold cash equivalent of at least 99% of CRR on a daily basis, compared with 70% earlier. (BS)
The National Association of Software and Services Companies (Nasscom) has maintained its growth forecast for the industry, at 12-14% for fiscal 2014. (BL)
Ticket pricing by airlines is set to come under scrutiny, with the civil aviation ministry roping in anti- trust watchdog Competition Commission of India to keep in check indiscriminate airfare increases in domestic aviation. (BS)
Weak open; rupee could strengthen
Do the difficult things while they are easy and do the great things while they are small - Lao Tzu
While the equity market has managed to flirt with Jan ’11 highs, the RBI continues with its measures to keep the rupee under grips. The central bank imposed new restrictions on commercial banks’ access to cash. Expect call rates and bond yields to see a perk up.
The outlook for the equity market is a weak start. Global cues are not really healthy. Attention will remain on result counters like Hero Motocorp Cairn India and Yes Bank. The banking counters which have been gaining strength could see some weakness again. Banks would be permitted to borrow under the liquidity adjustment facility (LAF) only up to 0.5%of their net deposits and time liabilities at the benchmark interest rate of 7.25 per cent. Starting July 27, 2013, banks will be required to maintain a minimum daily CRR balance of 99% of the requirement, compared with 70% earlier.
The government could rejoice at this development. The number of India's poor fell to less than a quarter of its population in 2011-12, according to a Planning Commission estimate.
IT sector too has some news to cheer. The National Association of Software and Services Companies has maintained its growth forecast for the industry, at 12-14% for fiscal 2014.
Maruti could be in action as there is a threat to shut down the Manesar plant.
China's manufacturing sector slowed to an 11-month low in July. The flash HSBC/Markit Purchasing Managers' Index fell to 47.7 this month from June's final reading of 48.2.
The Dow rose 0.14% while Standard & Poor's 500 Index fell 0.19%. Nasdaq fell 0.59%. An index of June manufacturing activity from the Federal Reserve Bank of Richmond plunged 11 points.
Asian stock markets are weak. Japan's Nikkei was 0.5% lower while Hong Kong's Hang Seng index and South Korea's Kospi index is flat. China's Shanghai index is marginally lower.
Results watch: Cairn India, Dabur India, Indiabulls Real Est, Indiabulls Infra, Yes Bank, Hero MotoCorp, Central Bank, Century Enka, Ador Welding, Atul, DIAMONPOWER, Gujarat Lease, Century Enka, Indiabulls Wholesale, ION Exchange, Kalyani Steel, Kewal Kiran, KIRL INDUS, Mahindra Lifespace,Ponni Sugar Erod, Novartis India, Orient Refractories, Rane Brake, Phil Corp, Sagar Cements, SKF India, Shanthi Gears, STORE ONE, Uniphos Enter, United Phos, TCPL Pack.
Trends in FII flows: The FIIs were net buyers of Rs2.11bn in the cash segment on Tuesday, while the domestic institutional investors (DIIs) were net buyers of Rs608.6mn, as per the provisional figures released by the NSE.
The foreign funds were net sellers of Rs4.92bn in the cash segment on Monday, according to the SEBI figures.
Global Data Watch: Consumer Price Index (YoY) (Q2) AUD, Consumer Price Index (QoQ) (Q2) AUD, RBA trimmed mean CPI (QoQ) (Q2) AUD, RBA trimmed mean CPI (YoY) (Q2) AUD, HSBC Manufacturing PMI (Jul)Preliminar CNY, Markit Manufacturing PMI (Jul)Preliminar EUR, Markit Services PMI (Jul)Preliminar EUR, Markit Manufacturing PMI (Jul)Preliminar EUR, Markit Services PMI (Jul)Preliminar EUR, Markit Manufacturing PMI (Jul)Preliminar EUR, Markit PMI Composite (Jul)Preliminar EUR, Markit Services PMI (Jul)Preliminar EUR, Retail Sales s.a. (MoM) (May) EUR, Retail Sales n.s.a (YoY) (May) EUR, Trade Balance non-EU (Jun) EUR, CBI Industrial Trends Survey - Orders (MoM) (Jul) GBP, MBA Mortgage Applications (Jul 19) USD, M3 Money Supply INR, Markit Manufacturing PMI (Jul)Preliminar USD, New Home Sales (MoM) (Jun) USD, New Home Sales Change (MoM) (Jun) USD, EIA Crude Oil Stocks change (Jul 19) USD, RBNZ Interest Rate Decision (Jul 25) NZD, Corporate Service Price (YoY) (Jun) JPY, Foreign bond investment (Jul 19) JPY, Foreign investment in Japan stocks (Jul 19) JPY
In other news in the media:
Tata Motors will re-enter Australia with LCVs. The company will introduce its 4x2, 4x4, single and crew-cab variants, with Euro V Turbo diesel engines in Australia. (BL)
SpiceJet CEO Neil Mills has quit. The sources said Mills put in his papers after a recent meeting with senior airline management. (BL)
Tata Power announced that it had generated 43.386mn units of solar power from its 25 MW facility at Mithapur in Gujarat in 2012-13. (BL)
Reliance Infrastructure has completed four laning of a 52-km stretch on NH-11, from Jaipur to Reengus in Rajasthan. Collection has begun on the toll road built at a cost of about Rs5.55bn. (BL)
ONGC and its partners — Tata Petrodyne and Hindustan Oil Exploration Co will invest Rs11bn in developing an offshore block in the Gulf of Cambay, off the west coast of India. (BS)
Jindal Steel and Power will consume 25-30mn tons of iron ore a year by 2015, three times current volumes, and source most of the raw material from abroad. (BS)
Larsen and Toubro has sought shareholders nod to raise up to US$600mn through issuing securities. (BS)
JSW Steel may buy the local assets of Stemcor Holdings to gain iron ore mines. (BS)
DLF has sought shareholders’ approval to modify the company's memorandum of association for providing specific retirement benefits to directors who have made outstanding contribution to the growth of the company. (ET)
With the dynamics of the gas market changing, Petronet LNG feels that the price at which it inked a contract to buy gas from Exxon’s Gorgon project in Australia could be re-visited, for it may end up being the most expensive gas the country has ever imported. (BL)
Ticket pricing by airlines is set to come under scrutiny, with the civil aviation ministry roping in anti- trust watchdog Competition Commission of India to keep in check indiscriminate airfare increases in domestic aviation. (BS)
Market may edge lower in early trade on weak Asian stocks
The market may edge lower in early trade on weak Asian stocks. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could fall 30 points at the opening bell. Indian stocks will react to the latest measures announced by the Reserve Bank of India (RBI) on Tuesday, 23 July 2013, to support the rupee which fell to a record low against the dollar this month. The market may remain volatile in the near future as traders roll over positions in the futures & options (F&) segment from the July 2013 series to August 2013 series. The near month July 2013 derivatives contracts expire tomorrow, 25 July 2013.
Ambuja Cements, Cairn India and Hero MotoCorp unveil quarterly results today, 24 July 2013. Among other major corporate results today, 24 July 2013, include that of Central Bank of India, Dabur India, United Phosphorus and Yes Bank.
Metal stocks may edge lower after a survey showed that China's manufacturing-sector activity is slowing further this month. China is the world's largest consumer of copper and aluminum.
Meanwhile, the Reserve Bank of India took new steps on Tuesday to support the rupee, signalling it will stay the course with its defence of the currency despite the risks to economic growth. The central bank tightened liquidity further and made it even harder for lenders to access funds with measures including lowering the amount banks can borrow or lend under its daily liquidity window. The RBI lowered the overall limit for borrowing under the daily liquidity adjustment facility (LAF) -- which offers funds in exchange for collateral -- for each bank to 0.5% of deposits from 1%. The central bank also said banks now needed to maintain 99 percent of their daily cash reserve ratio requirements -- the deposits they must set aside -- with the RBI, compared with 70% now. The change takes effect from the two-weekly period starting July 27. The RBI also announced the sale of short end cash management bills of Rs 6000 crore to drain out more cash from the banking system.
Key benchmark indices edged higher on Tuesday, 23 July 2013 as upmove in global stocks boosted sentiment. The S&P BSE Sensex rose 143.01 points or 0.71% at 20,302.13 on that day, its highest closing level since 4 January 2011.
Foreign institutional investors (FIIs) bought shares worth a net Rs 211.35 crore on Tuesday, 23 July 2013, as per provisional data from the stock exchanges.
Asian stocks fell on Wednesday as private survey showed manufacturing weakened further in July in China. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Singapore and Taiwan were down by 0.05% to 0.89%. South Korea's Kospi rose 0.17%.
China's manufacturing weakened further in July, signaling the worst of the nation's slowdown has yet to be reached, according to a preliminary survey of purchasing managers. The reading of 47.7 for an index released today by HSBC Holdings Plc and Markit Economics, was less than estimated and if confirmed in the final report Aug. 1, would be the lowest in 11 months. Readings below 50 indicate contraction.
Japan's exports rose for a fourth straight month in June as a weak yen made the nation's products more competitive and shipments to the European Union rebounded. Exports gained 7.4% from a year earlier, the Finance Ministry said in Tokyo today.
US stocks ended mostly lower on Tuesday after a decline in a regional manufacturing gauge prompted concern, but the Dow Jones Industrial Average climbed to a record close. The Federal Reserve Bank of Richmond said manufacturing activity in the central Atlantic region weakened.
Bank stocks in focus as RBI announces fresh liquidity measures
Bank stocks will be in focus as the Reserve Bank of India (RBI) announced fresh liquidity tightening measures after market hours on Tuesday to contain the volatility in the foreign exchange market. The overall limit for access to liquidity adjustment facility (LAF) by each individual bank is set at 0.5% of its own net demand and time liabilities (NDTL) outstanding as on the last Friday of the second preceding fortnight. This measure will come into effect immediately, from today, 24 July 2013 and will remain in force until further notice.
Currently, banks are allowed to maintain their cash reserve ratio (CRR) prescribed by the RBI on an average daily basis during a reporting fortnight, with a minimum of 70% of the required CRR on a daily basis. Effective from the first day of the next reporting fortnight from 27 July 2013, banks will be required to maintain a minimum daily CRR balance of 99% of the requirement.
Ambuja Cements, Cairn India and Hero MotoCorp unveil quarterly results today, 24 July 2013. Among other major corporate results today, 24 July 2013, include that of Central Bank of India, Dabur India, United Phosphorus and Yes Bank.
Coromandel International reported 81.4% fall in consolidated net profit to Rs 21.42 crore on 2.2% rise in net sales to Rs 1882.76 crore in Q1 June 2013 over Q1 June 2012.
WABCO India's net profit fell 15.4% to Rs 35.39 crore on 4.7% rise in net sales to Rs 248.91 crore in Q1 June 2013 over Q1 June 2012.
3M India's net profit fell 3.1% to Rs 21.09 crore on 1.9% rise in net sales to Rs 403.41 crore in Q1 June 2013 over Q1 June 2012.
Andhra Pradesh Paper Mills reported net profit of Rs 8.13 crore in Q1 June 2013 as compared to net loss of Rs 15.81 crore in Q1 June 2012. Net sales rose 37.4% to Rs 256.32 crore in Q1 June 2013 over Q1 June 2012.
Kokuyo Camlin's board of directors at its meeting held on 23 July 2013, has decided to issue equity shares on right basis in the ratio of 14 equity shares for every 29 shares held at Rs 33 per share.
SpiceJet's chief executive officer Neil Mills has reportedly resigned from his post a year-and-a-half before his contract ends.
Diamond Power Infrastructure's board of directors meet today to consider issue of bonus shares. The board would also consider issue of shares to the promoters on preferential basis.
Monday, July 22, 2013
Gain for exporters, pain for the rest
The first batch of results for the June quarter has been a mixed bag. While profitability of export-intensive sectors, such as information technology (IT), surprised on the upside, a demand slowdown seemed to be spreading to the financial sector, especially private banks.
A better-than-expected show by IT biggies like Tata Consultancy Services and Infosys lifted the core operating margin (excluding other income) of non-financial companies by 80 basis points on a year-on-year basis, despite stagnant revenues and double-digit increase in wage cost. Currency depreciation helped IT companies and manufacturing exporters like Bajaj Auto to book higher rupee revenues and cushioned the blow from rising operating cost in India.
A total of 123 companies have declared their first-quarter results so far. Of those, 99 are non-financial companies, while the rest are banks, non-banking financial companies (NBFCs) and brokerages (clubbed as financials).
Maintain buy on Mindtree post Q1 FY13 results
The mid-tier software services exporter reported a better-than-expected 72% quarter-on-quarter jump in its first quarter net profit at Rs. 135cr, helped by new deal wins and foreign exchange gains. Revenue was up 6% QoQ at Rs. 648cr.
It has a nine-month target price of Rs. 1,095, an upside of 16.1% from its current market price of Rs. 943.
Brokerage summary follows...
Q1 FY14 dollar revenues for Mindtree were a positive surprise. Against our expectation of 2.5% qoq growth, the dollar revenues grew 4.2% qoq. This growth was largely volume backed with total volumes growing 4.1% sequentially. The pricing was largely stable with 0.4% qoq growth in dollar terms. The reported rupee revenues were up 5.8% to Rs6.5bn.
Among the key businesses, IT services continued to be the primary driver of the performance growing 5.4% qoq in dollar terms. The PE services on the other hand remained stable growing 1.1% qoq. The company has re-organised its primary business segments, these being Manufacturing, BFSI, Hitech, Travel and Others. Among these segments, the growth was led by Manufacturing and BFSI which grew 9.5% and 9.1% qoq in dollar terms. Among geographies, growth was largely driven by US which grew 5% in dollar terms. Within services, ADM (+9% qoq), IMS (+7.9% qoq) and testing (+6.5% qoq) drove the growth. Impressive client mining resulted in Top6-10/Non top 10 clients grew well at 6.2%/3.6% qoq in dollar terms. Its US$10mn+ clients also went up impressively from 9 last quarter to 10 currently.
The operating margin performance too was better than expected with OPM correcting only 60bps against our expectation of 120bps correction. The key headwinds of visa costs and strong employee hiring was offset by rupee depreciation and utilisation improvement (up to 74% from 71% last quarter). The revenue and OPM out-performance as well as materially better than expected other income (due to strong forex gains of Rs. 618mn) resulted in strong PAT growth 72% qoq (versus expectation of 17.5% qoq growth). The employee additions during the quarter were robust with net additions of ~700 employees (+6% of previous quarter base). Attrition too trended down to 12.4% from 13.4% last quarter.
Management’s qualitative guidance and commentary remained positive with an expectation of a better growth in FY14 than FY13. Improvement in outlook for PE services, continued traction/visibility in IT services space (driven by IMS) and overall improvement in spending behaviour of its client portfolio were the key reasons for the constructive commentary. On the margin front, weak rupee and margin levers like offshoring, utilization should help to maintain the OPM despite the headwinds of salary hikes and strong hiring. We increase our estimates to reflect out-performance and weaker rupee assumptions. We maintain BUY with 9-month TP of Rs1,095.
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IT stocks reboot after strong Q1 show from TCS
Key benchmark indices saw divergent trend on last trading day of the week after witnessing high intraday volatility. The barometer index, the BSE Sensex, logged small gains to settle at over 7-week high. The 50-unit CNX Nifty finished slightly lower. The Sensex advanced 21.44 points or 0.11%, off 106.75 points from the day's high and up 38.72 points from the day's low. The market breadth, indicating the overall health of the market, was negative.
Index heavyweight Reliance Industries rose ahead its Q1 June 2013 results today, 19 July 2013. Index heavyweight and cigarette major ITC rose marginally after striking a record high. Bank stocks dropped. In the pharma pack, Lupin scaled record high. Power equipment major Bhel dropped sharply. IT major TCS hit record high after reporting good Q1 results after trading hours on Thursday, 18 July 2013. Other IT stocks were boosted by good Q1 results from TCS. HCL Technologies scaled record high. Asian Paints reversed direction after striking a record high.
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