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Friday, January 22, 2016

After dragging days; Draghi drives up sentiment now

Yesterday is not ours to recover, but tomorrow is ours to win or to lose. - Lyndon B. Johnson
A happy end to a tumultuous week appears to be in store. The name is Draghi, Mario Draghi; and the ECB Chief has for now provided the much needed relief rally to global markets. Draghi stated that Europe’s monetary policy will be reviewed and recalibrated in March as downside risks to the economy has increased due to the descent in oil prices and crisis emanating from the emerging markets, particularly China. The statement indicated a strong possibility of another round of quantitative easing. Meanwhile, ECB at its policy meet decided to keep the benchmark rate unchanged at 0.05%. The overnight deposit rate was also left unchanged at -0.3%
The outlook is a positive start. Early indications are indices could remain in the green for most part of the day if global cues provide support. The Nifty has been making a series of lower tops since March, which suggests that it is moving in a downward sloping channel with lower trendline support placed around 7200. Sharp corrections tend to provide choppy movement wherein index will have few days of uptick followed by few days of downtick. For now it looks like we will have an uptick.  Cairn India and ITC results will be in limelight among others.
Asian markets are mostly in the green. US indices advanced on Thursday on the back of a recovery in crude oil prices. Dow climbed 0.7% and S&P 500 rose 0.5%.
Finance Minister Arun Jaitley reportedly said it needs some additional growth engines and the focus now is on reviving private investments. 
Minister of Petroleum and Natural Gas (I/C) Dharmendra Pradhan said that the present Indian government is keen to move towards a geographically diversified energy basket, and this has resulted in India’s greater focus on Africa as a vital region for sourcing petroleum products in coming years. 
India's airlines may cut their cumulative losses by up to 72% this financial year said CAPA-Centre for Aviation. 
Shares of Reliance Capital and Idea Cellular Ltd will be in focus. Reliance Capital Ltd posted a net profit after taxes, minority interest and share of profit of associates of Rs. 2350 mn for the quarter ended December 31, 2015 as compared to Rs. 2130 mn for the quarter ended December 31, 2014. 
Reserve Bank of India Governor Raghuram Rajan has rejected Niti Aayog chief Arvind Panagariya's suggestion to raise the central bank's inflation target, according to reports. Rajan reportedly said that the current global market turbulence may owe much to central banks persisting with stimulus programmes for too long.
Among stocks to watch: 
ITC: The company will announce its Q3 result today. The company is likely to post revenue of Rs. 9,326 crore in Q3, a 4.3% growth Y-o-Y basis and 4.7% growth Q-o-Q basis as per IIFL estimates.
Alembic Pharma: Alembic Pharmaceuticals Ltd reported a 281% increase in net profit at Rs.269.5 crore for the third quarter that ended on December 31, 2015.
Cairn India: The company will announce its Q3 result today. IIFL expects net revenue to plunge 42.5% to Rs. 2,014 crore yoy; Q3 net revenue is expected to decline 10.2% qoq.
Cipla: Cipla's founder Y.K. Hamied plans to increase his shareholding in one of India's leading drugmakers to more than 20 per cent by acquiring over 5 per cent additional stake, reports a business daily. Cipla informed BSE that FIL Capital Investments (Mauritius) II Limited have informed the company that they have received intimation from the Competition Commission of India that the CCI has granted its approval with respect to, inter alia, the proposed investment by FIL Capital Investments (Mauritius) II Limited in Cipla Health Limited, subsidiary of the Company.
Tata Motors: Tata Motors will be showcasing more than 25 models and concepts across its passenger vehicle and commercial vehicle range, besides cars from Jaguar Land Rover (JLR) at the 2016 Auto Expo, reports a financial newspaper.
Biocon Ltd: The net profit for the quarter stands at Rs. 103 crore, up 13%. The company’s revenue at Rs. 836.4 crore, registered growth of 8.73% yoy.
RCOM: The company will announce its Q3 result today. IIFL expects net profit to fall 18.2% to Rs. 164.60 crore yoy; however, Q3 net profit is expected to rise 5.5% qoq.
Tata Steel: Tata Steel has suspended operations at its Canadian iron ore mining and processing project, reports a financial newspaper.
Lupin: Ace investor Rakesh Jhunjhunwala has reduced his stake in drug maker Lupin to 1.14% for the third quarter ended December 31, 2015. Jhunjhunwala now holds 51,15,105 shares of Lupin.
MRF: MRF is looking to set up a new plant to ramp up production, as its existing nine plants are running to full capacity. No call has been taken yet on the location of the new plant, Executive Vice President (Marketing) Koshy K Varghese has been quoted as saying.
Reliance Cap: Reliance Capital Ltd posted a net profit after taxes, minority interest and share of profit of associates of Rs. 2350 mn for the quarter ended December 31, 2015 as compared to Rs. 2130 mn for the quarter ended December 31, 2014.
Lumax Auto Tech: The company will announce its Q3 result today.IIFL expects net revenue to increase 6% to Rs. 224 crore yoy; however, Q3 net revenue is expected to slump 2.9% qoq.
Raymond: Raymond reported a fall of 28.5% in net profit to Rs.40.1 crore for the quarter ended Dec. 31, 2015 as compared to Rs.56.1 crore in the same period last year.
IndiGo: The company reported PAT of Rs. 6,572.88 million in December quarter compared to Rs.5,315.68 million, an increase of 23.7% year-on-year.
Max India: Max India will be dropped from BSE indices from January 27 following demerger of its health and allied vertical and specialty film business, according to reports.
Syngene Intl: The net profit for the quarter stands at Rs.  58.8 crore. The total income was at Rs. 280.4 crore as against Rs 227.6 Cr (YoY).
IL&FS Engineering: IL&FS Engineering and Construction Company rallied 2.3% to Rs.54.20 on BSE. The company has received a letter of acceptance (LOA) from GAIL (India) for laying and construction of pipeline along with associated works for pipeline replacement project in Gujarat region.
Kalpataru Power: The company has announced that it has bagged transmission orders worth Rs.1,295 crore.
VST Industries: VST Industries reported standalone net profit of Rs. 41.1 crore for the quarter, registering growth of 35.37% yoy. The company’s standalone total income from operation of Rs. 217.17 crore, up by 9.60% yoy.
HFCL Ltd: HFCL Ltd reported a jump of 66.76% in its standalone net profit at Rs 70.16 crore for the three months period ended December 31, 2015. 
Zee Media Corporation Ltd: The media company reported narrowing down of its consolidated net loss to Rs 1.11 crore for the third quarter ended December. 
M&M Financial: The company reported standalone net profit of Rs. 67.16 crore for the quarter ended December 31, 2015, registering decline of 50.76% yoy and 54.05% qoq.
Chambal Fertilisers: Chambal Fertilisers & Chemicals Ltd reported net loss at Rs.163.3 crore for the third quarter that ended on December 31, 2015.
Hindustan Zinc: The net profit for the quarter stands at Rs. 1811 crore. The total income for the quarter was at Rs.3430. 6 crore.
Indiabulls Real Estate Ltd: The company has reported 2.1 per cent year-on-year rise in net profit of Rs 80.44 crore for the quarter ended December. 
Results for today: ITC, Reliance Communications, Cairn India, Spicejet, Ashoka Buildcon, Atul,D B Corp,Lakshmi Vilas Bank, Lumax Auto Technologies, Kesoram Industries,Kirloskar Pneumatic,Supreme Petrochem, Can Fin Homes, Greenlam Industries, Coromandel International, CMI FPE, Everest Organics, Geojit Bnp Paribas Financial Services,L&T Finance Holdings, Shemaroo Entertainment, Indiabulls Wholesale Services, J.J.Exporters, Joy Realty, Keltech Energies, Kushal Tradelink, Mahindra Holidays & Resorts India, Onward Technologies, Pioneer Embroideries, Roto Pumps, Sarla Performance Fibers,Sj Corporation,Software Technology Group International,Store One Retail India, Tourism Finance Corporation Of India, Tecil Chemicals & Hydro Power, Veejay Lakshmi Engineering Works, Vardhman Special Steels
Global data: World Economic Forum - Davos CHF, Nikkei Manufacturing PMI (Jan)Preliminar JPY, MNI Business Sentiment Indicator (Dec) CNY, ECB President Draghi's Speech  EUR Markit Manufacturing PMI (Jan)Preliminar EUR, Markit Services PMI (Jan)Preliminar EUR, Markit PMI Composite (Jan)Preliminar EUR, Markit Manufacturing PMI (Jan)Preliminar EUR, Markit Services PMI (Jan)Preliminar EUR, Markit PMI Composit (Jan)Preliminar EUR, Markit Services PMI (Dec)Preliminar EUR, Markit Manufacturing PMI (Dec)Preliminar EUR, Markit PMI Composite (Dec)Preliminar EUR, Retail Sales ex-Fuel (MoM) (Dec) GBP, Retail Sales (MoM) (Dec) GBP, Retail Sales (YoY) (Dec) GBP, Retail Sales ex-Fuel (YoY) (Dec) GBP, Public Sector Net Borrowing (Nov) GBP, Bank Loan Growth INR, FX Reserves, USD INR, Chicago Fed National Activity Index (Dec) USD, Retail Sales (MoM) (Nov) CAD, Retail Sales ex Autos (MoM) (Nov) CAD, Consumer Price Index - Core (MoM) (Dec) CAD, Consumer Price Index (YoY) (Dec) CAD,Bank of Canada Consumer Price Index Core (MoM) (Dec) CAD, Bank of Canada Consumer Price Index Core (YoY) (Dec) CAD, Consumer Price Index (MoM) (Dec) CAD, Markit Manufacturing PMI (Jan)Preliminar USD, Existing Home Sales (MoM) (Dec) USD, Existing Home Sales Change (MoM) (Dec) USD, CB Leading Indicator (MoM) (Dec) USD, Baker Hughes US Oil Rig Count USD
Trends in FII flows: The FIIs were net sellers of Rs.17.47 bn in the cash segment on Thursday. The domestic institutional investors (DIIs) were net buyers of Rs.12.67 bn as per the provisional figures released by the NSE.
Other news in the media:
Chanda Kochhar said that ICICI Bank is targeting total transactions worth Rs 800bn through mobile banking by the end of this fiscal. (ET)
HSIL Ltd. is looking to increase its share in the sanitary ware market from the current 20%. The company, which is putting up a greenfield plant for manufacture of pipes in Telengana at a cost of Rs 1bn, hopes to better the industry growth of 8%. (ET)
Idea Cellular raised its capital expenditure guidance for the current fiscal to Rs 75bn up from Rs 65bn announced earlier. (BS)
Natco Pharma announced that it has signed a non-exclusive, royalty free licensing agreement with the Medicines Patent Pool and Bristol-Myers Squibb to manufacture and sell generic versions of the latter's chronic hepatitis C medicine -Daclatasvir Dihydrochloride. (BS)
Fearing notional loss of revenue due to tax concessions given to Paradip refinery of Indian Oil Corporation, the Odisha government has sought review of the MoU with the company. (BS)
Granules USA, the wholly-owned subsidiary of Granules India has entered into an agreement with Par Pharmaceutical Inc., a subsidiary of Endo International Plc to market the generic version of OTC omeprazole and sodium bicarbonate in the US. (BL)
State-owned Indian Oil Corp has nearly doubled the crude oil it buys from Nigeria on a term or fixed contract as it looks to diversify sources of supplies. (BL)
Mankind Pharma is setting up a manufacturing plant in the US to establish its footprint in that market. Currently the company earns about Rs 300mn annually from international business and it aims to grow it to Rs 1bn in next five years. (ET)
To double the capacity of state transport buses, the forthcoming Budget may contain a proposal for an annual grant of Rs 25bn for state road transport corporations to increase their fleet. (BS)
Large multinational enterprises (MNEs) may soon be put on notice with the Indian taxman set to get more empowered to obtain information on their global allocations of incomes and taxes. The upcoming budget will see India requiring MNEs to furnish information on their global incomes and taxes with the local income tax authorities. (BL)