India Equity Analysis, Reports, Recommendations, Stock Tips and more!
Search Now
Recommendations
Monday, March 31, 2014
Crude closes above $101/barrel
Positive economic data boosts prices
Crude oil prices rose further above the $100-a-barrel mark on Thursday, 27 March 2014 at Nymex settling at their highest close in about three weeks, with traders attributing the gains to growing global supply concerns as well as a continued drop in crude inventories at a key U.S. storage hub. A fall in U.S. jobless claims and a rise in the nation's economic growth also buoyed prospects for oil demand. Natural gas, meanwhile, saw prices close their highest level in more than two weeks as U.S. supplies fell more than expected.
Crude oil for May delivery added $1.02, or 1%, to settle at $101.28 a barrel on the New York Mercantile Exchange.
The ICE dollar index, which measures the U.S. currency against a basket of six major rivals, edged higher on Thursday, keeping gains of crude under check.
The Russia-Ukraine tensions have not escalated significantly recently, but the situation remains a concern to the world market place. While the U.S. is leading a worldwide effort to isolate Russia after its annexation of Crimea, reports Thursday said Russian economic growth is set to slow to the weakest rate in years. Meantime, the IMF has agreed to loan Ukraine up to $18 billion to help out that nation's struggling economy, after the Russian incursion.
The markets paid little attention to news late Wednesday that some U.S. and world banks, including Citi, failed a government stress test due to inadequate capital plans. Those banks will have to resubmit new capital plans to the Federal Reserve.
U.S. economic data out Thursday included the weekly jobless claims report, the third-quarter GDP estimate, the Kansas City Fed manufacturing survey, and pending home sales.
In details, Fourth quarter GDP was revised up to 2.6% in the third estimate from 2.4% in the second estimate. That matched the consensus estimate, but was down from a 4.1% gain in Q3 2013. Real final sales increased 2.7% in the fourth quarter. That was up from a 2.5% gain in Q3 2013 and above the previously reported 2.3% gain. It was also the strongest increase in real final sales since increasing 3.4% in Q2 2012. Looking at real final sales over the last four quarters (0.2%, 2.1%, 2.5%, and 2.7%), there is a definite upward moving trend. The year-over-year averages, however, put it below the 2.0% and 2.6% gains from 2011 and 2012.
The initial claims level fell to 311,000 for the week ending 22 March from an upwardly revised 321,000 (from 320,000) for the week ending 15 March. The consensus expected the initial claims level to increase to 330,000. Pending home sales for February fell 0.8%, which was worse than the 0.2% decrease forecast by the consensus. Today's reading followed last month's revised decrease of 0.2% (from +0.1%).
Among other energy products, April gasoline added 3 cents, or 1.2%, to $2.94 a gallon and April heating oil ended at $2.95 a gallon, up almost 3 cents, or 1%.
May natural gas tacked on 14 cents, or 3.3%, to $4.538 per million British thermal units, for the highest close since 11 March, based on the most-active contracts. Prices were trading at around $4.42 before the supply data were released. The EIA reported that supplies of natural gas fell 57 billion cubic feet for the week ended 21 March. Market had forecast a fall of between 50 billion cubic feet and 54 billion cubic feet
Market may extend recent strong gains
The market may extend recent strong gains as most Asian stocks edged higher. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 27.50 points at the opening bell.
L&T clarified before market hours with reference to reports in some sections of the media on the ongoing strike by some of the workers at our Hazira Campus, Gujarat that the strike has no material adverse impact on the operations and performance of the company.
Power Grid Corporation of India (PGCIL)'s board of directors at its meeting held on Thursday, 27 March 2014, approved the investment approval for 'Augmentation of transformers in Northern Region - Part B' at an estimated cost of Rs 155.57 crore, with commissioning schedule of 24 months from the date of investment approval.
NTPC said after market hours on Friday, 28 March 2014 that 10 megawatts (MW) Solar PV Power Station at Talcher is declared on commercial operation from 28 March 2014. The total capacity of non-conventional energy projects of NTPC has become 30 MW. With the commissioning and commercial declaration of above unit, the total commissioned and commercial capacity of NTPC group has become 42974 MW and 41314 MW respectively.
Tech Mahindra clarified after market hours on Friday, 28 March 2014 that media report reading "Tech Mahindra may buy stake in social biz startup", is speculative in nature and not issued by the company.
IFCI after market hours on Friday, 28 March 2014 said that the book building for an issue of Rs 215 crore with green shoe option upto Rs 215 crore was fully subscribed on Thursday, 27 March 2014, with aggregate bids for Rs 310 crore including green shoe option of Rs 95 crore.
Hindustan Zinc after market hours on Friday, 28 March 2014, said that the company has commissioned the first sewage treatment plant (STP) in Udaipur. It is the first sustainable development project of its kind in Rajasthan and has been constructed as per a tripartite agreement between Hindustan Zinc, Udaipur Municipal Corporation and Urban Improvement Trust. The STP will treat 20 million litres of sewage per day. The project has been constructed in a record time of 14 months at a cost of over Rs 70 crore, Hindustan Zinc said.
Olam International Limited (Olam) and Tata Chemicals (TCL) in a joint statement issued after market hours on Friday, 28 March 2014 said they have on 28 March 2014 signed a termination agreement and wish to announce that TCL will not proceed with its proposed 25.1% equity participation in the greenfield ammonia-urea fertiliser manufacturing project (GFC) in the Republic of Gabon, Africa. On 11 April 2011, the parties had announced TCL's participation in the project in which Olam currently holds 80% stake with the Government of the Republic of Gabon (ROG) holding the remaining 20%.
This decision was made due to a change in TCL's investment focus away from overseas fertiliser manufacturing and Olam's intention to move to a minority and non-consolidated position in the project. Since TCL's intention to invest in the project was announced in 2011, Olam and TCL have worked together closely to complete the project's Front End Engineering Design (‘FEED') phase. Olam acknowledges the significant contribution of TCL and its dedicated management team in developing the project to its current stage. TCL will maintain its relationship with GFC going forward by providing any technical support that may be requested by Olam or GFC's other equity partners.
"As announced previously, Olam is continuing its discussions with other industry participants who have expressed their desire to partner with us in the project. This is in line with our intention to bring down our final equity stake to below 50%. Our belief in the project's strategic and financial value to the Group still remains intact," said Olam's Executive Director of Finance and Business Development, A. Shekhar.
Mr. PK Ghose, Executive Director and CFO of TCL said: "We will continue to pursue the strategy of bringing world class products and services to the Indian farmers, with continuing investments in innovation and partnerships focused on the home market."
Excel Industries on Friday, 28 March 2014 said that pursuant to shareholders' approval at the Extraordinary General Meeting (EGM) of the company held on 15 March 2014 and in-principle approval for listing of securities under the Listing Agreement, the board of directors of the company at its meeting held on Friday, 28 March 2014 has issued and allotted to Utkarsh Global Holdings, a promoter group company, for consideration in cash, on preferential basis, twenty Lakh convertible warrants of face value of Rs 69 each. The warrants are convertible within 18 months in one or more tranches from the date of allotment, at the option of the holder of warrants, into one equity share of face value of Rs 5 each of the company at a premium of Rs 64 per equity share, Excel Industries said.
Readymade Steel India ‘s board of directors at its meeting held on Friday, 28 March 2014, allotted 6 lakh equity shares of Rs 10 each at Rs 200 per share fully paid to the investor who is non promoter namely BEC Infra on a preferential basis, on conversion of outstanding loan and advances received against the goods into equity shares.
Himachal Futuristic Communications after market hours on Friday, 28 March 2014 said that the company has voluntarily sought the delisting of GDRs from London Stock Exchange and Luxembourg Stock Exchange. The GDRs listing have been cancelled from London Stock Exchange and Luxembourg Stock Exchange with effect from 21 March 2014 and 23 December 2013 respectively consequent upon resignation by the Depository, Bank of New York (BNY Mellon). The Company has not appointed any Successor Depository and has terminated the Deposit Agreement due to lack of liquidity with virtually no trading taking place due to investors' decreasing interest in depositary receipts, Himachal Futuristic Communications said.
Polygenta Technologies on Friday, 28 March 2014 said that 2.20 crore compulsory convertible preference shares (CCPS) held by PerPETual Global Technologies, the promoters were converted into equal number of equity shares on Friday, 28 March 2014.
Lyka Labs said after market hours on Friday, 28 March 2014 that the board of directors of the company at its meeting held on 28 March 2014, has decided to re-appoint Shri. N. I. Gandhi as Managing Director for a period of 5 years from 1 April 2014 subject to approval of shareholders in the General Meeting and other Statutory Approvals.
The board has also decided to invest in 35 lakh shares of Rs 10 each of Lyka Exports at a premium of Rs 25 in lieu of its outstanding subject to approval of the shareholders in the General Meeting. It also decided to transfer Domestic Marketing Division of Ethical products under slump sale to Lyka Healthcare a wholly owned subsidiary company from 1 March 2014.
The Reserve Bank of India will announce the First Bi-monthly Monetary Policy Statement, 2014-15 tomorrow, 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
The next major trigger for the stock market is the outcome of the upcoming Lok Sabha elections. Lok Sabha elections will be held between 7 April 2014 and 12 May 2014 in nine phases. The counting of votes will take place on 16 May 2014. The term of the current Lok Sabha expires on June 1 and the new House has to be constituted by May 31. Along with the Lok Sabha election, Andhra Pradesh (AP), including the regions comprising Telangana, Odisha and Sikkim will go to polls to elect new assemblies. AP, Odisha and Sikkim assemblies come to end on June 2, June 7 and May 7 respectively.
Key benchmark indices edged higher in choppy trade on Friday, 28 March 2014, with the market sentiment boosted by data showing that foreign institutional investors (FIIs) resorted to heavy buying of Indian stocks on Thursday, 27 March 2014. The S&P BSE Sensex garnered 125.60 points or 0.57% to settle at 22,339.97, a record closing high.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1,362.87 crore on Friday, 28 March 2014, as per provisional data from the stock exchanges.
Asian stocks rose on Monday as consumer shares led advances. Key benchmark indices in Singapore, Japan, Indonesia and Taiwan were up 0.05% to 0.47%. Key benchmark indices in Hong Kong, China and South Korea fell 0.04% to 0.42%.
US stocks climbed after a two-day slide on Friday, as consumer shares rebounded amid data showing household purchases rose the most in three months. Household purchases, which account for almost 70% of the US economy, climbed 0.3% after a 0.2% gain in January that was smaller than previously estimated, Commerce Department figures showed.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 said after the conclusion of a monetary policy review that it will trim its monthly bond purchases by $10 billion to $55 billion. The Federal Reserve will end its bond-buying program before the end of the year with an interest-rate increase likely to follow in "around six months," Chair Janet Yellen said on 19 March 2014. Quarterly Fed forecasts on 19 March 2014 showed more officials predicting that the benchmark interest rate, now close to zero, will rise to at least 1% by the end of 2015 and 2.25% a year later.
GMR Infra in focus after units files for IPO
GMR Infrastructure said that the draft red herring prospectus (DRHP) has been filed on 28 March 2014 by GMR Energy, a subsidiary of the company, with the Securities and Exchange Board of India for its initial public offering (IPO).
NTPC said after market hours on Friday, 28 March 2014 that 10 megawatts (MW) Solar PV Power Station at Talcher is declared on commercial operation from 28 March 2014. The total capacity of non-conventional energy projects of NTPC has become 30 MW. With the commissioning and commercial declaration of above unit, the total commissioned and commercial capacity of NTPC group has become 42974 MW and 41314 MW respectively.
Power Grid Corporation of India (PGCIL)'s board of directors at its meeting held on Thursday, 27 March 2014, approved the investment approval for 'Augmentation of transformers in Northern Region - Part B' at an estimated cost of Rs 155.57 crore, with commissioning schedule of 24 months from the date of investment approval.
L&T clarified that the ongoing strike at its Hazira Campus in Gujarat has no material adverse impact on the operations and performance of the company.
Trent said that the High Court of Judicature at Bombay has approved the scheme of amalgamation and arrangement between Landmark, Fiora Link Road Properties and Trexa ADMC with Trent and their respective shareholders and creditors. The company would now proceed to seek the other regulatory approvals and the Scheme will be effective on getting the last of such approval, the company said.
Tech Mahindra clarified after market hours on Friday, 28 March 2014 that media report reading "Tech Mahindra may buy stake in social biz startup", is speculative in nature and not issued by the company.
Tata Chemicals (TCL) and Olam International (Olam), in a joint statement issued after market hours on Friday, 28 March 2014, said they have on 28 March 2014 signed a termination agreement and wish to announce that TCL will not proceed with its proposed 25.1% equity participation in the greenfield ammonia-urea fertiliser manufacturing project (GFC) in the Republic of Gabon, Africa. On 11 April 2011, the parties had announced TCL's participation in the project in which Olam currently holds 80% stake with the Government of the Republic of Gabon (“ROG”) holding the remaining 20%.
This decision was made due to a change in TCL's investment focus away from overseas fertiliser manufacturing and Olam's intention to move to a minority and non-consolidated position in the project. Since TCL's intention to invest in the project was announced in 2011, Olam and TCL have worked together closely to complete the project's Front End Engineering Design (FEED) phase. Olam acknowledges the significant contribution of TCL and its dedicated management team in developing the project to its current stage. TCL will maintain its relationship with GFC going forward by providing any technical support that may be requested by Olam or GFC's other equity partners.
"As announced previously, Olam is continuing its discussions with other industry participants who have expressed their desire to partner with us in the project. This is in line with our intention to bring down our final equity stake to below 50%. Our belief in the project's strategic and financial value to the Group still remains intact," said Olam's Executive Director of Finance and Business Development, A. Shekhar.
Mr. PK Ghose, Executive Director and CFO of TCL said: "We will continue to pursue the strategy of bringing world class products and services to the Indian farmers, with continuing investments in innovation and partnerships focused on the home market."
IFCI after market hours on Friday, 28 March 2014 said that the book building for an issue of Rs 215 crore with green shoe option upto Rs 215 crore was fully subscribed on Thursday, 27 March 2014, with aggregate bids for Rs 310 crore including green shoe option of Rs 95 crore.
Excel Industries on Friday, 28 March 2014 said that pursuant to shareholders' approval at the extraordinary general meeting (EGM) of the company held on 15 March 2014 and in-principle approval for listing of securities under the listing agreement, the board of directors of the company at its meeting held on Friday, 28 March 2014 has issued and allotted to Utkarsh Global Holdings, a promoter group company, for consideration in cash, on preferential basis, twenty Lakh convertible warrants of face value of Rs 69 each. The warrants are convertible within 18 months in one or more tranches from the date of allotment, at the option of the holder of warrants, into one equity share of face value of Rs 5 each of the company at a premium of Rs 64 per equity share, Excel Industries said.
Readymade Steel India's board of directors at its meeting held on Friday, 28 March 2014, allotted 6 lakh equity shares of Rs 10 each at Rs 200 per share fully paid to the investor who is non promoter namely BEC Infra on a preferential basis, on conversion of outstanding loan and advances received against the goods into equity shares.
Himachal Futuristic Communications after market hours on Friday, 28 March 2014 said that the company has voluntarily sought the delisting of GDRs from London Stock Exchange and Luxembourg Stock Exchange. The GDRs listing have been cancelled from London Stock Exchange and Luxembourg Stock Exchange with effect from 21 March 2014 and 23 December 2013 respectively consequent upon resignation by the Depository, Bank of New York (BNY Mellon). The company has not appointed any Successor Depository and has terminated the deposit agreement due to lack of liquidity with virtually no trading taking place due to investors' decreasing interest in depositary receipts, Himachal Futuristic Communications said.
Polygenta Technologies on Friday, 28 March 2014 said that 2.20 crore compulsory convertible preference shares (CCPS) held by PerPETual Global Technologies, the promoters were converted into equal number of equity shares on Friday, 28 March 2014.
Lyka Labs said after market hours on Friday, 28 March 2014 that the board of directors of the company at its meeting held on 28 March 2014, has decided to re-appoint Shri. N. I. Gandhi as managing director for a period of 5 years from 1 April 2014 subject to approval of shareholders in the general meeting and other statutory approvals.
The board has also decided to invest in 35 lakh shares of Rs 10 each of Lyka Exports at a premium of Rs 25 in lieu of its outstanding subject to approval of the shareholders in the General Meeting. It also decided to transfer domestic marketing division of ethical products under slump sale to Lyka Healthcare a wholly owned subsidiary company from 1 March 2014.
Sunday, March 30, 2014
Saturday, March 29, 2014
Friday, March 28, 2014
Sensex jumps on strong foreign fund flows
Indian stocks surged to record high as foreign institutional investors (FIIs) stepped up buying. Investors are betting that the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) will be able to form the next government at the centre with support from some regional parties after Lok Sabha elections in April-May this year. The BJP with its prime ministerial candidate Mr. Narendra Modi is considered more pro-business and a more pro-reform party than the Congress party. As chief minister for the fast-growing state of Gujarat, Mr. Modi has built a reputation for getting things done. Investors hope that if he becomes prime minister he will be better at building infrastructure, battling corruption and reducing the number of regulations that get in the way of investment. The barometer index, the S&P BSE Sensex, hit record high above 22,000. The Sensex gained in four out of five sessions in the week ended 28 March 2014.
The Sensex garnered 584.65 points or 2.68% to settle at 22,339.97, a record closing high. The 50-unit CNX Nifty garnered 201 points or 3.09% to 6,695.90, a record closing high.
The S&P BSE Mid-Cap index gained 3.21%, outperforming the Sensex. The S&P BSE Small-Cap index rose 2.44%, underperforming the Sensex.
Key benchmark indices surged to record closing high on Monday, 24 March 2014, after the government exceeded its $3.1 billion asset sales target for this fiscal year and as investors bet that the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) will be able to form the next government at Centre. The Sensex moved past the psychological 22,000 level. The S&P BSE Sensex garnered 300.16 points or 1.38% to settle at 22,055.48 on that day, a record closing high for the barometer index.
A divergent trend was witnessed on Tuesday, 25 March 2014, as the barometer index, the S&P BSE Sensex, registered miniscule losses while the 50-unit CNX Nifty registered small gains. The Nifty hit record high both on intraday as well as on closing basis. The S&P BSE Sensex lost 0.27 points to settle at 22,055.21 on that day, its lowest level since 22 March 2014.
Small gains pushed key benchmark indices to record closing high on Wednesday, 26 March 2014. The S&P BSE Sensex garnered 40.09 points or 0.18% to settle at 22,095.30 on that day, a record closing high.
Key benchmark indices edged higher and hit fresh record high on Thursday, 27 March 2014, with the market sentiment boosted by data showing that foreign institutional investors (FIIs) made substantial purchases of Indian stocks on Wednesday, 26 March 2014. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit lifetime high on intraday basis as well as on closing basis. The S&P BSE Sensex garnered 119.07 points or 0.54% to settle at 22,214.37 on that day, a record closing high.
Key benchmark indices gained for the third straight day in a row and hit fresh record high on Friday, 28 March 2014, with the market sentiment boosted by data showing that foreign institutional investors (FIIs) resorted to heavy buying of Indian stocks on Thursday, 27 March 2014. The S&P BSE Sensex garnered 125.60 points or 0.57% to 22,339.97, on that day, a fresh record high.
From the 30-share Sensex pack, 23 stocks rose and seven fell in the week that ended on Friday, 28 March 2014.
Index heavyweight and cigarette major ITC rose 0.64%.
Reliance Industries (RIL) gained 2.91%. ONGC gained 6.56%. The Election Commission on Monday, 24 March 2014, directed the government to put on hold a proposed hike in natural gas prices which was to take effect from 1 April 2014. The Congress party-led government's plan for increasing the price of natural gas to around $8 per million metric British Thermal unit from $4.20 was controversial and set to take effect days before the start of voting in national elections. Delhi's former chief minister, Arvind Kejriwal, criticized the move recently and cited the case as an example of federal policy makers going out of their way to help powerful energy company Reliance Industries (RIL). RIL operates India's Krishna Godavri D 6 field, which has been the country's richest gas discovery in recent years.
The government had sought the election regulator's approval to go ahead with the new policy. The polls agency has the power to stay any move in the run-up to elections that could influence the outcome of the vote.
Shares of gas distribution companies and power stocks gained after the Election Commission on Monday, 24 March 2014, directed the government to put on hold a proposed hike in natural gas prices which was to take effect from 1 April 2014.
GAIL (India) rose 7.8%. GAIL (India) announced after market hours on Monday, 24 March 2014, that it has signed a Memorandum of Understanding (MoU) with Chubu Electric Power Co., Inc., Japan (Chubu) on 21 March 2014. Under the MoU, GAIL and Chubu shall mainly explore possibilities for collaboration in the area of joint LNG procurement. Besides, the two companies will also seek to collaborate on shipping optimization, GAIL (India) said in a statement.
Chubu and GAIL are, both, large LNG importers having considerable synergy between their LNG business profiles. It is assessed that with GAIL joining hands with Chubu for jointly pursuing LNG procurement and other allied business opportunities, such a collaboration shall augment GAIL's efforts to aggressively source LNG volumes on competitive terms and would be a win-win proposition for both companies, GAIL (India) said.
GAIL's latest move is also in sync with the company's recent efforts in establishing and promoting Asia LNG Forum, a sort of Asian LNG buyers' club. GAIL is also actively working towards establishing a regional gas trading hub for Asia as well as an Asian gas index.
This MoU with Chubu is yet another effort by GAIL towards bridging the gap in demand supply of natural gas in the Indian market, GAIL (India) said. This is in addition to other initiatives of GAIL towards LNG sourcing, creating LNG regasification infrastructure, reserving liquefaction tolling capacity in overseas projects and augmenting transmission capacity significantly over the next few years. GAIL will continue to make efforts to tie-up affordable LNG in its portfolio to meet the rapidly growing energy demand of the Indian market.
Chubu is one of the largest importers of LNG in Japan, and has significant presence across gas value chain including upstream assets, liquefaction capacity and regas capacity.
Among power generation firms, NTPC (up 5.64%) and Tata Power Company (up 8.95%) surged.
Bank shares rose as the Reserve Bank of India is widely expected to keep its main lending rate viz. the repo rate unchanged after a monetary policy review on 1 April 2014 as inflation has eased. Among PSU bank stocks, State Bank of India (SBI) surged 11.74%. The stock was the biggest gainer from the Sensex pack.
Among private sector banks, Axis Bank (up 5.14%), ICICI Bank (up 5.08%) and HDFC Bank (up 1.78%) rose.
The Reserve Bank of India (RBI) on Thursday, 27 March 2014, extended the deadline for banks to fully implement the stringent capital requirements under Basel III by a year due to industry wide concerns over potential bad loans and its impact on profitability. This may necessitate some lead time for banks to raise capital within the internationally agreed timeline for full implementation of the Basel III Capital Regulations, the RBI said in a notification on its website. The period for full implementation of Basel III capital regulations has now been extended to 31 March 2019, from 31 March 2018, the RBI said. Basel III is a global regulatory framework for more resilient banks and banking systems.
Capital goods stocks also gained. Bharat Heavy Electricals (Bhel) surged 6.61%.
Engineering and construction major L&T jumped 5.64% to Rs 1288.30. The stock hit a 52-week high of Rs 1,295 in intraday trade on Thursday, 27 March 2014. The company said on Thursday, 27 March 2014, its Buildings & Factories division has won new housing orders worth Rs 1981 crore in this month.
Tata Motors (up 1.95%) and Maruti Suzuki India (up 3.2%) edged higher. Mahindra & Mahindra (M&M) fell 0.71%
Shares of most two wheeler makers also gained. Bajaj Auto gained 4.12%.
Hero MotoCorp vaulted 8.34% to Rs 2244. The stock hit 52-week high of Rs 2,260 in intraday trade on Friday, 28 March 2014.
Metal stocks edged higher on growing expectations that China will take steps to stimulate its sagging economy. China is the world's largest consumer of copper and aluminum. Hindalco Industries gained 7.55% to Rs 130.35. The stock hit 52-week high of Rs 131 in intraday trade on Friday, 28 March 2014.
Sesa Sterlite rose 4.28%.
Tata Steel gained 5.26%. Tata Steel after market hours on Tuesday, 25 March 2014, said that the company had launched the bid-cum-auction process for the sale of its land parcel in Borivali on 18 December 2013 by public advertisements in national dailies. The site measuring roughly 25 acres is located at the junction of Western Express Highway and Dattapada road in Borivali (E), Mumbai and is abutting both these roads. The neighborhood predominantly comprises medium to high-end residential developments. Tata Steel said it has completed the e-auction process on Monday, 24 March 2014, for the sale of this land with the participation of several well-known developers. The Committee of Independent Directors appointed for the oversight and governance of the sale process by the Tata Steel Board on Tuesday, 25 March 2014, declared Oberoi Realty as the highest bidder of the auction on the basis of their final bid of Rs 1155 crore, after several rounds of bidding. As per the laid down process, the sale will be concluded after all requisite permissions are obtained, Tata Steel said.
IT stocks edged lower as the rupee edged higher against the dollar. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports. Wipro (down 3.02%) and TCS (down 0.94%) edged lower.
Infosys declined 1.1%. Infosys after market hours on Thursday, 27 March 2014, said its US-based subsidiary -- Infosys Public Services, Inc. -- has been selected by Prime Therapeutics LLC (Prime Therapeutics), a leading pharmacy benefit manager (PBM), to set up a testing center of excellence (COE) and consolidate the delivery of its application testing services as part of a new three-year contract. Prime Therapeutics will streamline and optimize its quality assurance (QA) and testing services as well as enhance its competitiveness with Infosys Public Services' expertise and world-class delivery model. Prime Therapeutics also expects to expand the capabilities of its QA organization and gain efficiencies in managing a large scale QA department, Infosys said in a statement.
Pharma stocks edged lower as investors dumped defensive stocks as market surged to record high. Cipla (down 1.88%), and Sun Pharmaceutical Industries (down 3.57%) declined.
Dr. Reddy's Laboratories lost 6.08%. The stock was the biggest loser from the Sensex pack. Dr. Reddy's Laboratories during market hours on Thursday, 27 March 2014, announced that it has launched Amlodipine Besylate and Atorvastatin Calcium Tablets 2.5/10 mg, 2.5/20mg, 2.5/40mg, 5/10mg, 5/20mg, 5/40mg, 5/80mg, 10/10mg, 10/20mg, 10/40mg and 10/80 mg a therapeutic equivalent generic version of CADUET (amlodipine Besylate and atorvastatin calcium) tablets, in the US market on Wednesday, 26 March 2014, following the approval by the United States Food & Drug Administration (USFDA).
The CADUET tablets brand and its generic had US sales of approximately $163 million for the most recent twelve months period ended 31 January 2014, according to IMS Health data. Dr. Reddy's Amlodipine Besylate and Atorvastatin Calcium Tablets are available in bottle counts of 30 and 90, the company said.
Thursday, March 27, 2014
What do you think ?
You have a opinion on a stock, saw a report and want to recommend it ?
How about doing that right here on the site and easily too!
There is a "You say:" for every post/report, You could mark any post a "Buy, Sell, Must Read, Interesting or Pass it"
Please give it a try and let's see if it works for everyone! This was thanks to a suggestion by moneybloke
Monday, March 24, 2014
Sunday, March 23, 2014
Saturday, March 22, 2014
Wednesday, March 19, 2014
Tuesday, March 18, 2014
Saturday, March 15, 2014
Tough victory for Bulls on D-Street: Nifty ends above 6500
Markets edged higher in late trades led by buying index heavyweights and short covering in financial shares. The BSE Sensex rose 0.16% and NSE Nifty was up by 0.17%
Major Headlines:
February WPI eases at 4.68% Vs 5.05% (MoM)
Earnings warning dents sentiment, price target revised
Premium deferment to help improve cash flow position
Mphasis Q1 net profit drops by 2% (YoY)
Indian Indices:
Bulls some how managed to regain their position on D Street today. The Indian markets started the last trading session of the week in the red zone. It was a completely dull session for the Indian equity benchmarks due to lack of local and global cues. Sectors like CG, Realty, Power, Oil & Gas, Metal, Auto and FMCG led some support to the markets, while the Banking, TECk, CD, IT, and PSU added pressure. The major S&P BSE Sensex gainers were L&T, ITC, Infy, RIL, Tata Motors, Sun Pharma and Dr. Reddy.
Markets staged smart recovery in late afternoon session after a range-bound day of trades this Friday ignoring weak global cues. The recovery in markets was led by due to index heavyweights and short covering in financial shares. The continued strong foreign buying boosted blue-chips such as Larsen & Toubro, although some caution also set in about the pace of recent gains.
On the macro economic front, the monthly inflation eased to a nine-month low in February as food and fuel prices moderated, raising expectations that the RBI would leave interest rates unchanged at its policy review next month.
Broader markets were weak with the S&P BSE Midcap down 0.23% and S&P BSE Smallcap fell by 0.34% at end of the day.
The Sensex closed at 21,810, up 35 points while the Nifty gained 11 points to close above the psychological 6,500 levels at 6,504.
Events for the day:
India's wholesale prices-based inflation eased to a nine-month low of 4.68% in February, helped mainly by moderating food prices, government data showed on Friday.
Market sentiment:
The market breadth stood in favour of declines. Of the 2903 stocks traded on the BSE, 1162 (40.03%) rose, 1587 (54.67%) fell and 154 (5.30%) stocks remained unchanged.
Sectoral & stock screening
Among the sectoral indices: Top Gainers: S&P BSE CG up by 1.85%, S&P BSE Realty rose 1.00% and S&P BSE Auto up 0.94%. Top Losers: S&P BSE PSU down 0.71%, S&P BSE Bankex down 0.68% and S&P BSE Teck down 0.56%
Among 'A' group stocks, top three gainers were- Crompton Greaves rose 4.63%, GMDC up by 3.92% and DLF surged 3.86%. Top three losers were- L&T Finance slipped 6.19%, Financial Tech down by 4.51% and MCX fell by 4.47%
Following are the stocks/sectors which were in news today:
1. L&T Finance Holdings shares fell 6.19% after the non-banking financial company set a floor price for its stake sale at Rs70 per share, or an 11.5% discount to its Thursday closing price.
2. Shares of Tech Mahindra rose 0.19%, after the central bank on Thursday allows the company to increase the foreign investment limit to up to 48% of its paid-up capital from 45%.
3. Astrazeneca Pharma India jumped 8.82%, after the company scheduled a board meeting on March 15, 2014 to consider voluntary delisting proposal.
Global Signals:
US stock index futures poised for a slightly higher opening at the Wall Street on Friday.
European shares fell to five-week lows on Friday, with German blue chips among the worst hit, as tensions in Ukraine ahead of a weekend referendum unnerved investors
Asian markets fell against the dollar as jitters over heightened tensions in Ukraine and worries over an economic slowdown in China curbed investors' appetite for riskier assets.
Loha Ispaat IPO Analysis
Loha Ispaat is as an independent steel service centre (SSC), acting as an intermediary between primary metal producers who generally sell large volumes of limited size and configuration products and end-users requiring economical quantities and customized products. The company offers a variety of sizes, grades and standards of steel processed according to customer specifications. It purchases raw materials like hot rolled (HR), cold rolled (CR), hot rolled pickled and oils (HRPO), cold rolled closed annealed (CRCA) coils, sheets and plates from steel manufacturers and converts them into various shapes and forms through de-coiling, re-coiling, slitting, pickling, oiling, roll forming, and cutting. The product portfolio offers a diversified range of grades, thickness, widths and standard of HR, CR, HRPO, CRCA and galvanized coils and plates; chequered coils and plates; and trapezoidal blank coils as per orders.
Two subsidiaries, Loha Ispaat Hong Kong (100% owned) and Loha Ispaat Middle East Fz (90% owned), support marketing in international markets.
There are two manufacturing locations. The Khopoli unit in Maharashtra provides various lines for slitting and cut-to-length (CTL) facilities and is currently operating at capacity of nine lakh tonnes per annum (tpa). This would be augmented to 21.82 lakh tpa post expansion. Initial commercial production began from September 2012. The Tajoja unit in Maharashtra operates manual pickling of HR sheets and plates. The capacity is 1.05 lakh tpa. Initial commercial production has started at the cold rolling mill (CRM) complex at MIDC Taloja. With capacity of 30,000 tpa, this is a backward integration facility. Full commercial production of the expansions will be visible in FY 2015 earning. The entire expansion was undertaken at capex of about Rs 358 crore and was funded by debt and promoters' equity of about Rs 120 crore.
The initial public offering comprise 2.67 crore of equity shares of Rs 10 each in a price band of Rs 77-80. At the lower price band, about Rs 205.63 crore will be raised and at the higher price band about Rs 213.64 crore. Between December 2013 and February 2014, 35.36 lakh equity shares were allotted to pre-IPO investors at a price of Rs 78 per equity share aggregating to Rs 27.58 crore. The net proceeds of the issue and the pre-IPO placement funds will be utilised to meet the working capital requirement of the Khopoli and Taloja plants post expansion. The funds will take care of the working capital requirement till FY 2015.
Strengths
Of the total flat steel consumed in India, only about 13% gets routed through SSC in India as against about 60% internationally. Hence, even if the steel or the user industry does not grow, new customer base can continue to expand.
Small users would prefer the CSS model due to benefits of low inventory and working capital requirement, time-saving conversion process, and money-saving dedicated shops. Also, the R&D centre helps user industries to make the best and effective use of flat steel, which they may not be in a position to do due to lack of facility at their plants.
The diversified customer base consists of more than 500 regular large- and medium-sized domestic customers,, with no single customer accounting for more than 1% of total sales. Customers include original equipment manufacturers (OEMs) covering more than 100 types of industry segments and sub segments such as automobiles, bearings, fabrication, packaging, general engineering, pipe manufacturing, white goods, infrastructure, and home appliances.
Weaknesses
The business is low-tech, low value addition, and volume-driven.
Risks include raw material price fluctuations, customer default, high working capital requirement, high inventory and a very thin margin. The profit after tax (PAT) margin hovers around 1.7-2%.
Consolidated debt:equity ratio including short-term borrowings stood at 1.5 end September 2013. Consolidated inventory days stood at 75 days and consolidated debtors days at 77 days end March 2013. Post fiscal ending March 2015 (FY 2015), more working capital will be required for future growth.
High interest rates and a slowing economy make the business risky.
The full effect of the expanded capacity will be visible from FY 2015. If the economy and the number of clients do not improve, then higher interest and depreciation on the expanded capacity will hurt the bottom line.
Valuation
Consolidated net sales were Rs 3429.02 crore and PAT Rs 70.45 crore in FY 2013. Consolidated net sales stood at Rs 2021.65 crore and PAT Rs 38.90 crore in H1 of FY 2014. On fully diluted post-IPO equity share capital of Rs 101 crore, EPS for FY 2013 was Rs 7 and annualised H1 of FY2014 EPS Rs 7.7. At the lower price band of Rs 77 and higher price band of Rs 80, the offer price discounts FY 2014 annualised earning 10 times and 10.4 times, respectively. Most of the large steel players such as like JSW, Uttam Galva and Tata Steel have their own dedicated in-house lines, which act as SSC. But the contribution from these centres is low. There is no listed comparable player with focus on the SSC business. Such low value-addition and high working-capital-intensive business deserves P/E lower than 10.
Market slips on weak global cues
The market declined last week on weak global cues. Media reports that unseasonal heavy rain and hail storms have hit crops across the country over the last one week hit investor sentiment adversely. Provisional data showing a decline of 3.67% in India's merchandise exports year-on-year in February 2014 also spoiled sentiment.
The S&P BSE Sensex fell 109.99 points or 0.50% to 21,809.80. The 50-unit CNX Nifty fell 22.45 points or 0.34% to 6,504.20.
The BSE Mid-Cap index fell 37.26 points, or 0.56% to 6,656.18, underperforming the Sensex. The BSE Small-Cap index rose 15.23 points, or 0.23% to 6,627.68, outperforming the Sensex.
FIIs, the key driver of Indian markets, have bought shares worth a net Rs 5067.90 crore in this month so far (till 13 March 2014). FIIs bought shares worth net Rs 1404.30 crore in February 2014. FIIs have bought shares worth a net Rs 7186.50 crore in this calendar year so far (till 13 March 2014). FIIs bought shares worth a net Rs 113135.70 crore in 2013 calendar year.
The market rose in three out of five trading sessions of the week. Small gains helped key benchmark indices attain record closing high on Monday, 10 March 2014. The market was volatile. The barometer index, the BSE Sensex, fell below the psychological 22,000 mark after hitting a record high above that level in intraday trade. The S&P BSE Sensex garnered 15.04 points or 0.07% to settle at 21,934.83. The CNX Nifty garnered 10.60 points or 0.16% to settle at 6,537.25.
Key benchmark indices edged lower in choppy trade on Tuesday, 11 March 2014, after provisional data showed that India's merchandise exports fell 3.67% year-on-year in February 2014. The S&P BSE Sensex lost 108.41 points or 0.49% to settle at 21,826.42. The CNX Nifty shed 25.35 points or 0.39% to settle at 6,511.90.
Key benchmark indices eked out small gains in a choppy trading session on Wednesday, 12 March 2014. The S&P BSE Sensex garnered 29.80 points or 0.14% to settle at 21,856.22. The CNX Nifty rose 5 rose or 0.08% to settle at 6,516.90.
A sudden slide pulled key benchmark indices from positive zone to negative zone on Thursday, 13 March 2014. The S&P BSE Sensex dropped 81.61 points or 0.37% to settle at 21,774.61. The CNX Nifty lost 23.80 points or 0.37% to settle at 6,493.10.
A strong intraday rebound in late trade took the key benchmark indices to positive zone from negative zone on Friday, 14 March 2014. The market sentiment was boosted by the latest data showing that inflation based on the wholesale price index (WPI) eased to a nine-month low last month. The S&P BSE Sensex garnered 35.19 points or 0.16% to settle at 21,809.80. The CNX Nifty garnered 11.10 points or 0.17% to settle at 6,504.20.
Among the 30 Sensex shares, 19 rose and the remaining shares fell. Sesa Sterlite (down 7.81%), Tata Steel (down 7.7%), Hindalco Industries (down 7.54%), GAIL (India) (down 4.14%), Axis Bank (down 3.62%) and Bharti Airtel (down 2.09%), edged lower from the Sensex pack.
HDFC Bank (up 2.86%), ITC (up 2.80%), ONGC (up 2.30%), Bhel (up 2.10%), Reliance Industries (up 1.97%), Dr Reddy's Laboratories (up 1.82%) and Cipla (up 1.29%), edged higher from the Sensex pack.
Two-wheeler major Hero MotoCorp jumped 6.10% to Rs 2.125.35. It was the top Sensex gainer last week.
Two-wheeler maker Bajaj Auto rose 0.63% to Rs 1,968.20.
Mahindra & Mahindra (M&M) rose 4.61% to Rs 1025.75. The company after market hours on 7 March 2014, said that the High Court of Judicature at Bombay on 7 March 2014 has approved a Scheme of Arrangement between Mahindra Trucks and Buses (MTBL), a wholly owned subsidiary of the company and its shareholders and creditors and M&M [the Scheme] which, inter alia, envisages demerger of the Trucks Undertaking of MTBL and transfer and vesting thereof into the company and other consequential matters under the provisions of Sections 391 to 394 read with Sections 78 and 100 to 104 of the Companies Act, 1956. The certified copy of this Order is yet to be received, M&M said.
Car maker Maruti Suzuki India rose 0.07% to Rs 1,737.10. As per reports, a group of investors of Maruti Suzuki India (MSIL) has ratcheted up pressure on India's top carmaker to abandon a plan for its Japanese parent to build a new plant to make cars for the Indian firm, saying it would hurt shareholders.
Suzuki Motor Co in January 2014 announced plans to invest $488 million on a new plant in India and shelved an earlier plan for Maruti to set up the factory itself. A group of 16 big fund managers said in a letter to Maruti management, dated March 5, that the plan would shift manufacturing activity away from the Indian company and turn it into a "shell company" of its parent, report added.
"The decision of the MSIL board is ill-conceived in its entirety and results in outsourcing of the core manufacturing activity that is fundamental and critical for MSIL," the letter said, referring to Maruti Suzuki. "This clearly is not in the best interest of MSIL and its shareholders and is in fact significantly detrimental to them," the investors said, in a rare case of shareholder activism in India.
A smaller group of shareholders sent a previous letter last month, saying they were concerned that the contract for the plant in Gujarat state meant the Japanese carmaker, rather than Maruti, would reap the benefits of rising domestic sales. Under the plan, Maruti will buy vehicles produced by Suzuki at the new plant and sell them in the open market. Maruti currently produces and sells its own cars.
Maruti will continue to produce cars at its existing factories in Manesar and Gurgaon in north India, which have a capacity of 1.5 million vehicles per year, but incremental production would be sourced from the Suzuki plant. The second letter was signed by HDFC Asset Management, DSP BlackRock Investment Managers, Axis Asset Management and Birla Sun Life Mutual Fund, among others, report said.
Commercial vehicles major Tata Motors fell 3.84% to Rs 393.30.
Tata Power jumped 5.05% to Rs 83.15. The company announced on 10 March 2014 that the Committee for Rights Issue, at its meeting held on 8 March 2014 has decided to issue 33.22 crore shares on rights basis at Rs 60 per share, which is proposed to open on or prior to 31 March 2014. Rights entitlement ratio is 7:50, i.e. an eligible shareholder will be entitled to apply for 7 rights shares for every 50 shares held. Tata Power has fixed 20 March 2014 as the record date for the purpose of issuing equity shares by way of the rights issue.
The rights issue would lead to an equity dilution of 13.99%.
The entire rights issue price, that is Rs 60, shall be payable on application, of which Rs 1 shall be applied towards the face value of each share and Rs 59 shall be applied towards the share premium.
The issue opening date for the rights issue shall be no later than 31 March 2014. The issue shall remain open for a minimum period of 15 days; provided that the Committee for Rights Issue in consultation with the Lead Managers may extend the period of the issue for such further period as may be deemed fit, subject however that in no event would the issue remain open for a period exceeding 30 days, Tata Power Company said.
It may be recalled that Tata Power had on 28 February 2014 said its board approved raising funds up to Rs 2000 crore by way of a rights issue of equity shares, subject to all applicable statutory and regulatory approvals.
Larsen & Toubro (L&T) jumped 4.84% to Rs 1255.50. L&T, the promoter of L&T Finance Holdings, after market hours on Thursday, 13 March 2014, announced an Offer for Sale (OFS) to sell 5.55 crore equity shares, constituting 3.23% of the equity share capital of the company on Friday, 14 March 2014 through stock exchanges mechanism. In addition to the sale shares, L&T may also sell up to 2.77 crore equity shares of face value Rs 10 each of the company in the sale on Friday, 14 March 2014. The offer price for the share sale was fixed at Rs 70 per share after market hours on Thursday, 13 March 2014. The offer price is at a discount of 11.61% to the stock's closing price of Rs 79.20 on Thursday, 13 March 2014.
L&T holds 81.5% stake in L&T Finance Holdings (as per the shareholding pattern as on 31 December 2013).
Shares of IT major Infosys plunged after the company's CEO and Managing Director S.D. Shibulal on Wednesday, 12 March 2014, warned that the company's sales growth for the current fiscal year may be near the lower end of its forecast as some of its clients are tightening spending on technology. The stock fell 9.40% at Rs 3,389.45. The stock was the major loser in the Sensex pack.
Shibulal said that the company's revenue growth in the fiscal year that begins in April may also be slow if business momentum remains weak. "At the ground level, some of the clients have seen a slowdown across various industry verticals, leading to unanticipated project ramp-downs," Shibulal told investors at a conference organized by Barclays in Bangalore on Wednesday, 12 March 2014. Infosys's clients in the retail and manufacturing sectors are facing "spending pressure," he said. "Many of the factors that have led to the recent slowdown will continue to impact client spending at least in the initial part of fiscal year 2015," Shibulal said.
It may be recalled that Infosys had at the time of the announcement of Q3 December 2013 results on 10 January 2014 raised its revenue growth guidance in both rupee and dollar terms for the year ending 31 March 2014 (FY 2014). At that time, the company forecast 11.5% to 12% growth in revenue in dollar terms for FY 2014. At that time, the company had forecast 24.4% to 24.9% in revenue in rupee terms for FY 2014 based on rupee dollar conversion rate of 61.81 for the rest of the financial year.
Other IT shares also declined. TCS (down 3.77%) and Wipro (down 3.27%), edged lower.
Sun Pharmaceutical Industries dropped 4.97% to Rs 581.75 after the company said that the US FDA issued an import alert for the company's cephalosporin facility located at Karkhadi, Gujarat in India. The stock was volatile. The scrip hit high of Rs 610 and low of Rs 565.60. The import alert was issued by the US FDA as a follow up to the last inspection of the facility, during which some non-compliance of current Good Manufacturing Practice (cGMP) regulations were identified, Sun Pharmaceutical Industries said in a statement.
Sun Pharmaceutical Industries said it remains fully committed to compliance and has already initiated several corrective steps to address the observations made by the US FDA. The contribution of this facility to Sun Pharma's consolidated revenues is negligible. Sun Pharma said that there is no change in the company's consolidated sales growth guidance for the year ending March 2014.
At the time of the announcement of Q3 December 2013 results last month, Sun Pharmaceutical Industries had raised its consolidated revenue growth guidance to 29% for the year ending 31 March 2014, from the previous guidance of 25%. The guidance is at constant exchange rate.
Global equity markets witnessed selling pressure last week as investors evaded riskier assets amid rising concerns in Ukraine and growth worries in China. A standoff between Russia and Ukraine over Crimea weighed on global equity markets as investors awaited a weekend referendum that may lead to Crimea's secession from Ukraine.
The Black Sea region of Crimea votes 16 March 2014 on becoming independent or rejoining Russia, with the US and Germany threatening Moscow with sanctions over its support for the secession. Russia launched new military exercises near its border with Ukraine on Thursday, showing no sign of backing down in its plans to annex its neighbour's Crimea region despite a stronger than expected drive for sanctions from the EU and United States. US Secretary of State John Kerry warned Russia that the US and Europe could take very serious steps the day after the referendum should there be no sign of a resolution to the crisis. Kerry, who told a Senate panel in Washington that "nobody doubts" Crimea will vote to leave Ukraine.
Meanwhile, at least four investment banks lowered forecasts for China's 2014 economic expansion after reports on Thursday, 13 March 2014, showed factory output rose in January and February from a year earlier by the least since the global financial crisis, while retail sales grew at the slowest rate for the period since 2004.
China's Premier Li Keqiang told reporters on Thursday, 13 March 2014, that the nation's 2014 goal of 7.5% economic growth is flexible and some financial-product defaults may be unavoidable.
On the macro front, India's inflation based on the wholesale price index (WPI) eased to a nine-month low of 4.68% in February 2014, from 5.05% in January 2014 and 7.28% during the corresponding month of the previous year, data released by the government Friday, 14 March 2014, showed. Build up inflation rate in the financial year so far was 5.17% compared to a build up rate of 6.15% in the corresponding period of the previous year. The government revised upwards the rate of WPI inflation for December 2013 to 6.4%, from 6.16% reported on 15 January 2014.
Just when inflation had started to cool in India, unseasonal heavy rain and hail storms have hit crops across the country. Parts of central, northern and western India have been lashed by freak storms over the last week, damaging some crops that were just about to be harvested. The unusual weather has affected Madhya Pradesh, Punjab and Haryana as well as Maharashtra and Gujarat, according to reports. Madhya Pradesh grows high-quality durum wheat, the harvesting of which usually starts in early March. The bad weather has also affected fruit, vegetables and oilseed in Maharashtra and Gujarat, according to reports. The India Meteorological Department has predicted heavy rains in Madhya Pradesh and Maharashtra as well as parts of Rajasthan and Uttar Pradesh in the coming week.
The summer season crop will also likely be affected this year by El Nino, a weather phenomenon usually associated with below-average rainfall. El Nino is the warming of the Pacific Ocean that causes a shift of moist winds away from their typical patterns. It generally results in less rain for India's June-to-September monsoon season.
The economy can grow an annual 5.2% in the quarter to end-March on higher farm output growth, the chairman of the Prime Minister's Economic Advisory Council said on Friday, 14 March 2014. C. Rangarajan also said he expects the economic growth to pick up to 5.5% to 6% in the fiscal year that begins on 1 April 2014.
Subscribe to:
Posts (Atom)