BSE Bulk Deals to Watch - July 6 2009

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
6/7/2009 524412 AAREY DRUGS NIKHILBHAI VINAKANTBHAI SHAH B 35000 39.95
6/7/2009 532057 ABHINAV CAP MAHASHREE PLASTIC IND P LTD B 39900 93.75
6/7/2009 532057 ABHINAV CAP KAILASH HARDATTRAI BIYANI S 39900 93.75
6/7/2009 531223 ANJANI SYNTH ARVIND KALYANJI RAMBHIA S 71087 36.51
6/7/2009 530355 ASIAN OILFIE PASHA FINANCE PVT. LTD. B 100000 65.15
6/7/2009 530355 ASIAN OILFIE SWIFT TIE UP PVT LTD S 100000 65.15
6/7/2009 526839 CCAP LTD PANKAJ SONI B 20000 32.03
6/7/2009 526839 CCAP LTD SWETA PHOPHALIA B 20010 33.40
6/7/2009 526839 CCAP LTD PANKAJ SONI S 20000 33.40
6/7/2009 526839 CCAP LTD SWETA PHOPHALIA S 20010 32.02
6/7/2009 511636 DJS STOCK SH SHOHESH P SHAH S 65900 33.50
6/7/2009 532696 EDUCOMP SOLN OPG SECURITIES P LTD B 108518 4143.91
6/7/2009 532696 EDUCOMP SOLN OPG SECURITIES P LTD S 108518 4146.12
6/7/2009 526797 GREENPL INDU TRUPTI DINESH KAMDAR B 100000 100.00
6/7/2009 526797 GREENPL INDU MORGAN STANLEY MAURITIUS COMPANY LIMITED B 250000 100.00
6/7/2009 526797 GREENPL INDU ASHISH DHAWAN B 382758 100.27
6/7/2009 526797 GREENPL INDU GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD S 600000 100.00
6/7/2009 526797 GREENPL INDU TRUPTI DINESH KAMDAR S 100000 100.50
6/7/2009 508918 GREYCELLS EN INDIA MAX INVESTMENT FUND LTD B 88625 154.90
6/7/2009 508918 GREYCELLS EN KIRITKUMAR MUCHHALA HEMANG S 88625 154.90
6/7/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL B 76387 55.55
6/7/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL S 85073 54.54
6/7/2009 516078 JUMBO BAG LT BALAJI TRADINGENTERPRISESPRIVATELIMITED S 100000 54.52
6/7/2009 516078 JUMBO BAG LT CHIMANLAL MANEKLAL SECURITIES PVT.LTD S 36026 54.96
6/7/2009 530273 LIBERTY PHOS TRADELINK EXIM (INDIA) PVT LTD B 50000 22.25
6/7/2009 526823 RAJES FOUND ARVIND KALYANJI RAMBHIA B 26189 16.30
6/7/2009 531898 SANGUINE MD SANDIP BHARAT BHAIRAVAL B 72000 4.46
6/7/2009 512048 SPLASH MEDIA ASHOK FINSTOCK LTD S 15000 95.80
6/7/2009 526133 SUPERTEX IND SHAISHIL T JHAVERI S 71500 56.50
6/7/2009 513534 VARDHMAN IND VIKRAM JAIN & SONS (HUF) B 100000 14.10
6/7/2009 513534 VARDHMAN IND SHIVALIK SECURTIES LTD S 100000 14.10
6/7/2009 531249 WELL PACK PA AMAR PREMCHAND WALMIKI B 40000 158.39

NSE Bulk Deals to Watch - July 6 2009

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
06-JUL-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD.,BUY,124435,4165.69,-
06-JUL-2009,EVERONN,Everonn Systems India Lim,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,85631,403.64,-
06-JUL-2009,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,BUY,238646,404.32,-
06-JUL-2009,EVERONN,Everonn Systems India Lim,MULTIPLEX CAPITAL LTD.,BUY,114182,402.20,-
06-JUL-2009,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,BUY,1466388,237.69,-
06-JUL-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,10135054,21.17,-
06-JUL-2009,MAYTASINFR,Maytas Infra Limited,SAL REAL ESTATES (P) LTD,BUY,322867,69.35,-
06-JUL-2009,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD.,BUY,2347170,40.56,-
06-JUL-2009,NIITLTD,NIIT Limited,OM INVESTMENTS,BUY,938863,63.55,-
06-JUL-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD.,SELL,124435,4168.32,-
06-JUL-2009,EVERONN,Everonn Systems India Lim,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,85631,404.29,-
06-JUL-2009,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,SELL,238646,404.61,-
06-JUL-2009,EVERONN,Everonn Systems India Lim,MULTIPLEX CAPITAL LTD.,SELL,114182,402.65,-
06-JUL-2009,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,SELL,1466388,237.83,-
06-JUL-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,11416893,21.27,-
06-JUL-2009,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD.,SELL,2347170,40.54,-
06-JUL-2009,NIITLTD,NIIT Limited,OM INVESTMENTS,SELL,938863,63.58,-

Post Session Commentary - July 6 2009

Indian markets revealed its worst performance in the recent weeks today and closed with huge losses after going through bloodbath during the trading session as the Union Budget failed to motivate the investor’s sentiments. The budget focused more on infrastructure growth as the Finance Minister increased spending on roads, power and aid to the poor that raised dissatisfaction on the economic reforms. Finance Minister Pranab Mukherjee did not announced any major policy and eliminated the commodities transaction tax (CTT) along with fringe benefit tax (FBT). Besides, he had not made any change in the corporate tax and hiked the minimum alternate tax to 15% from 10% of book profit that led to negative reaction in the market. BSE Sensex ended below 14,100 level and NSE Nifty closed below 4,200 level.

The market opened today on positive note ahead of Union Budget for the current financial year. Meanwhile, the US stock markets remained closed on Friday on the celebration of Independence Day. The domestic stocks pared all opening gains slipped into red after Pranab Mukherjee started presenting the Union Budget 2009 in Lok Sabha. There was lack of clarity for disinvestment and the budget was not as per market expectations and consequently was unable to encourage sentiments. Further, benchmark indices continued to extend losses and slipped sharply lower during final trading hours on sustained selling pressure led by budget disappointment. Negative European market also fueled the weak sentiments. From the sectoral front all indices ended in red barring Consumer Durables stocks. Besides, Bank, Metal, IT, Teck, Power, Realty and Pharma contributed to most the selling pressure. BSE Mid Cap and Small Cap stocks also witnessed huge selling pressure.

Finance minister Pranab Mukherjee presented the Union Budget 2009 in Lok Sabha today. He said PSU banks and Insurance Companies would remain under government control. He abolished the surcharge on personal Income tax by 10% and increased IT exemption to Rs 2,40,000 for senior citizens. He added that there will be exemption of Rs.10,000 for all other categories. Also, the government has increased the allocation for its rural job scheme by 144% to Rs 39,000 crore and allocation for the Jawaharlal Nehru National Urban Renewal Mission by 87% to Rs 12,887 crore. Meanwhile, total budget expenditure for 2009-10 will Rs 10,28,032 crore. Further, plan expenditure, for both Centre and States, to go up by Rs 61,000 crore and fiscal deficit in 2009-10 is proposed at 6.8% of GDP.

Among the Sensex pack 28 stocks ended in red territory and 2 in green. The market breadth indicating the overall health of the market remained weak as 2020 stocks closed in red while 551 stocks closed in green and 62 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 869.65 points or 5.83% at 14,043.40 and NSE Nifty ended down by 258.55 points or 5.84% at 4,165.70. BSE Mid Caps and Small Caps closed with losses of 268.34 and 262.08 points at 4,918.88 and 5,562.87 respectively. The BSE Sensex touched intraday high of 15,097.87 and intraday low of 13,959.44.

Losers from the BSE Sensex pack are Reliance Infra (12.17%), ICICI Bank (10.09%), JP Associates (9.93%), Tata Steel (9.55%), HDFC (9.00%), L&T Ltd (8.94%), SBI (8.60%), DLF Ltd (8.23%), RCom (7.87%), Tata Power (7.15%), Hindalco (6.69%), Sterlite Industries (6.54%), Reliance (6.53%), HDFC Bank (5.88%), Tata Motors (5.71%) and ONGC Ltd (5.67%).

Only two gainers from the BSE Sensex pack are ITC Ltd (3.13%) and HUL (0.99%).

On the global markets front the Asian markets that opened before the Indian market, ended mostly lower on growth concerns. Hang Seng, Nikkei 225, Straits Times index and Seoul Composite ended lower by 223.99, 135.20 and 33.66 at 17,979.41, 9,680.87 and 2,266.09 respectively. However, Shanghai Composite and Seoul Composite gained 36.30 and 8.90 points at 3,124.67 and 1,428.94 respectively.

European markets, which opened after the Indian market, are trading in red. In Frankfurt the DAX index is trading down by 73.45 points at 4,634.76 and in London FTSE 100 is trading lower by 50.36 points at 4,185.92.

The BSE Bank stocks dropped by (8.17%) or 391.07 points to close at 7,768.63 as government stated that banks and insurance sector will be excluded from the divestment plan. Major losers are Indus Ind Bank (11.56%), ICICI Bank (10.09%), IDBI Bank (9.56%), Axis Bank (8.90%) and SBI (8.60%).

The BSE Reality index closed with decrease of (7.28%) or 250.04 points at 3,185.19. Scrips that lost are Unitech Ltd (9.26%), DLF Ltd (8.23%), Indiabull Real (6.26%), Omaxe Ltd (5.99%) and Housing Dev (5.27%).

The BSE Capital Goods index tumbled (7.02%) or 913.30 points to close at 12,099.76. Main losers are Areva (11.19%), Alstom Proje (9.91%), Punj Lloyd (9.84%), Reliance Industrial Infra (8.97%) and L&T Ltd (8.94%).

The BSE Metal ended down by (6.57%) or 743.12 points at 10,560.22. Losers are Tata Steel (9.55%), Ispat Industries (8.45%), Hindalco (46.69), Sterlite Industries (6.54%) and Steel Authority (6.50%).

The BSE Power index lost (6.36%) or 186.40 points to close at 2,743.83. Losers are Reliance Infra (12.47%), Power Grid (8.07%), Torrent Power (7.69%), Suzlon Energy (7.58%) and Tata Power (7.15%).

The BSE Oil & Gas index ended lower by (5.81%) or 558.04 points to close at 9,039.22. Aban Offshore (8.88%), RNRL (8.66%), Essar Oil Ltd (6.98%), Reliance (6.53%) and ONGC Ltd (5.67%) ended in negative territory.

Reliance Capital closed lower by 11.13%. However, the company has unveiled an ambitious plan for the next three-five years including entering the banking sector as and when regulations permit, globalizations of operations and to increase its customer base from 15 million to 50 million.

Prakash Industries Ltd fell 4.96% despite report the company will raise $100 million through issuing foreign currency convertible bonds to fund its proposed 625 megawatt thermal power project at Chhattisgarh.

DLF Ltd plunged 8.23% despite reports the company has raised Rs. 1,000 crore through sale of land parcels across four cities in the past 4-5 weeks.

Ashok Leyland Ltd plunged 8.15%, after total sales declined 44.41% to 3,971 units in June 2009 over June 2008.

Hindustan Dorr Oliver Ltd ended lower by 0.42%. The company has bagged an order from CIDCO (City & Industrial Corporation of Maharashtra Ltd), Navi Mumbai, for Design, Engineering, Supply, Construction, Erection and Commissioning of their 70 MLD Sewage Treatment Plant coming up in Kharghar, Navi Mumbai. The project value is 60.3 crores and completion period is 24 months.

Heavy volumes accompany sharp post-budget market slide

Lack of any big bang economic reforms in the Union Budget 2009-2010 resulted in sell-off on the bourses that was accompanied by heavy volumes. The BSE 30-share Sensex tanked 869.65 points or 5.83%. The Sensex fell below the psychological 14,000 mark in late trade but it soon regained that level. Weak global stocks also weighed on investor sentiment. Banking, capital goods, power metal and realty stocks led the decline.

As per provisional data released by the stock exchanges, foreign funds today, 6 July 2009, dumped shares worth a net Rs 1483.03 crore. On the other hand, domestic funds bought stocks worth a net Rs 815.71 crore.

Turnover on BSE's cash segment surged to Rs 7,314 crore from Rs 5,578.05 crore on Friday, 3 July 2009. Turnover on NSE's derivatives segment soared to Rs 96656.53 crore from Rs 54841.47 crore on 3 July 2009

Investors were disappointed after the Union Budget 2009-2010 did not contain any major reforms such as a roadmap to increase foreign direct investment in insurance sector and decontrol fuel prices. Lack of financial sector reforms and a clear roadmap on divestment were other sources of disappointment. The government set an very small target of Rs 1120 crore from divestment for the financial year ending March 2010. A surge in fiscal deficit target added to the market's woes. Finance Minister (FM) Pranab Mukherjee set a sharply higher fiscal deficit target to 6.8% for the financial year ending March 2010 after he increased spending on roads, power and aid to the poor.

Volatility on the stock market was immense. The market surged in choppy trade ahead of the Union Budget in early deals. The Sensex crossed the psychological 15,000 mark in early trade. The market extended gains gains after the Finance Minister Pranab Mukherjee said there is need to return to 9% growth at the earliest. A sell-off gripped the market later after the the minster set higher fiscal deficit target. The market cut losses after a sharp intraday fall in early afternoon trade. After a bout of volatility, the market slumped in mid-afternoon trade.

The market was expecting some announcement on decontrol on fuel prices but the FM only said that a panel will be set up to look into the pricing of petrol and diesel. The market was also surprised by the FM keeping a mum on Foreign Direct Investment (FDI) policy at a time when expectations were running high that the government will announce a roadmap for hike in foreign direct investment in insurance sector to 49% from 24%

The projected FY 2010 fiscal deficit is much higher than the 5.5% deficit forecast by Mukherjee in an interim budget in February 2009, and also higher than the 6.2% deficit recorded by the government in the previous year ended 31 March 2009.

Commenting on the stock market's negative reaction to the Union Budget, Mukherjee said the market may have expected too much from the country's annual financial document. In an interview to Lok Sabha TV after the presentation of the budget, the Finance Minister said the budget was not the only instrument to address the economy's issues.

The finance minister has forecast an increase in plan expenditure by 34% and non-plan expenditure by 37%. The total projected budgetary spending in 2009-10 stands at Rs 10.23 lakh crore. The government has proposed an increase in the allocation for government welfare schemes by 45%. Expenditure on Bharat Nirman has been hiked by 45%. The government has allocated Rs 3,91,000 crore under the National Rural Employment Guarantee Scheme this year. The allocation for rural roads scheme has been raised by 59% in 2009-10.

The 10% surcharge on personal income tax has been scrapped. The FM has scrapped the Fringe Benefit Tax and also suggested removal of the Commodities Transaction Tax (CTT). The Minimum Alternate Tax (MAT) has been hiked to 15% of book profit from 10% of boom profit. The FM has kept the corporate tax rate unchanged. Mukherjee said the government will pursue structural changes in direct and indirect taxes. He said states have agreed on basic structure of goods and services tax which will be introduced from 1 April 2010.

FM has increased personal income tax exemption by Rs 15,000 for senior citizens and by Rs 10000 for others.

The Finance Minister (FM) said the plan is to a return to a path of 9% at the earliest and to deepen and broaden the agenda for inclusive development. The FM forecast a 6.7% GDP growth for FY 2010.

The government has extended agriculture debt waiver by 6 months and provided additional Rs 1000 crore over interim budget for irrigation. Budget will provide additional subvention of 1% to farmers who pay short term farm loans on schedule. He said government will develop long distance gas pipelines to develop national grid and LNG infrastructure in the country.

The finance minister has allocated Rs 4000 crore to incentivise lending to small firms. Budget extended interest subvention to exporters in seven sectors till March 2010 and will provide relief to exporters hit by global financial crisis. FM has extended agriculture debt waiver by 6 months and provided additional Rs 1000 crore over interim budget for irrigation.

The budget has allocated Rs 5000 crore for Mumbai flood project. The government will raise allocation for urban poor schemes to Rs 3,973 crore in 2009-10.

The finance minister proposed to raise the threshold for non-promoter holding in all listed companies. The FM said the government will encourage people participation in divestment of state owned firms. He said a plan will be set up to review domestic fuel prices. He said the government plans to return to fiscal reform targets at the earliest and that institutional reforms are required to control fiscal deficit. The government plans to move towards nutrient based subsidy regime for fertilizers and to offer direct subsidy to farmers.

The FM said significant flow of foreign capital is important and that there are signs of revival in domestic industry and foreign investors have returned. He said the government will continue to provide fiscal stimulus and to provide more flexibility to Infrastructure Finance Company (IIFCL). IIFCL will facilitate 'take out' financing for infrastructure projects. He said allocation for national highways development will rise 23% and has asked states to remove bottlenecks on infrastructure projects.

The government has restored 8% excise duty on manmade fibres. It has meanwhile, scrapped the excise duty on branded jewellery. With regards to the customs duty, the duty on LCD panels has been cut to 5% from 10%. The government has imposed a 5% customs duty on set top boxes. The customs duty on wind power equipment has been cut to 5% from 7.5%.

The finance minister said fiscal deficit target will be closer to 3% of GDP by FY 2011-12 assuming a global economic recovery. He has assumed GDP growth of 8% in FY 2011 and 9% in FY 2012.

Reacting to the Budget, Prime Minister Dr. Manmohan Singh, said the Finance Minister has done a commendable job in reconciling the short term requirements of our economy, to provide a stimulus to the growth process and simultaneously to ensure that we recapture the rhythm of the growth process despite the recessionary tendencies in the world economy.

Meanwhile, credit rating agency Standard & Poor's (S&P) said India's proposed budget deficit of 6.8% of gross domestic product is within the boundary of the rating agency' expectation. The prospect of a wider fiscal gap had already prompted S&P to change the outlook on India to negative after the government said in its February interim budget that additional stimulus of 0.5% to 1% of GDP may be required, Takahira Ogawa, a Singapore-based director of sovereign ratings at S&P said.

Weak global stocks added to selling pressure on the domestic bourses today. European shares fell today to a seven-week low on worries that economic recovery may still be some way off, with energy companies and banks leading the fallers, and ahead of the start of second-quarter earnings. The key benchmark indices in France, Germany and UK were down by between 1.22% to 1.58%.

Most of Asian stocks fell today. Key benchmark indices in Hong Kong, Singapore, Japan and Taiwan were down by between 0.23% to 1.38%. Key benchmark indices in China and South Korea were up by between 0.63% to 1.18%.

Trading in US futures indicated Dow could fall 74 points at the opening bell on Monday, 6 July 2009. US markets were closed on Friday, 3 July 2009 on account of Independence Day.

The BSE 30-share Sensex tanked 869.65 points or 5.83% to 14,043.40. The Sensex rose 184.82 points at the day's high of 15,097.87 in mid-morning trade. At the day's low of 13,959.44, Sensex fell 953.61 points in late trade.

The S&P CNX Nifty was down 258.55 points or 5.84% to 4,165.70. Nifty July 2009 futures were at 4,154, at a discount of 11.70 points as compared to the spot closing of 4165.70.

The BSE Sensex is up 4,396.09 points or 45.56% in calendar year 2009 as on 6 July 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex has risen 5,883 points or 72.09% as on 6 July 2009.

Coming back to today's trade, the market breadth, indicating the overall health of the market, was weak in contrast to a strong breadth in early trade. On BSE, 543 shares rose as compared with 2,009 that fell. 62 shares remained unchanged.

From the 30 shares Sensex pack, 28 fell and 2 rose.

The BSE Mid-Cap index fell 5.17% and the BSE Small-Cap index fell 4.8%. Both the indices outperformed the Sensex.

The BSE Bankex (down 8.17%), the BSE Realty index (down 7.28%), the BSE Capital Goods index (down 7.02%), the BSE Metal index (down 6.57%), the BSE Power index (down 6.36%), underperformed the Sensex.

The BSE FMCG index (up 0.97%), the BSE Consumer Durables index (down 1.81%), the BSE Healthcare index (down 1.88%), the BSE IT index (down 2.74%), the BSE Auto index (down 3.31%), the BSE TECk index (down 3.92%), the BSE PSU index (down 5.51%), the BSE Oil & Gas index (down 5.81%), outperformed the Sensex

India's largest private sector firm by market capitalisation Reliance Industries (RIL) fell 6.54% to Rs 1,893.30 after Finance Minister Pranab Mukherjee increased the rate of minimum alternate tax to 15% from 10%.

RIL pays tax under MAT. RIL's total tax liability stood at Rs 3028 crore in the year ended March 2009 (FY 2009) which included deferred taxes of Rs 900 crore and fringe benefit tax of Rs 54 crore. While higher MAT may result in increase in tax outgo, the scrapping of the fringe benefit tax (FBT) may help mitigate the impact to some extent. The government has scrapped FBT in the Union Budget 2009-2010.

Meanwhile, the government has restored tax holiday to natural gas producers which will benefit RIL. In the last financial year's budget, the government had removed seven-year tax holiday on natural gas production while continuing the same for oil production.

In a major development RIL, late last week, moved the Supreme court, challenging the Bombay High Court judgment asking it to supply gas to the former at a price that is 44% lower than fixed by the government. In its appeal filed in the Supreme Court on Saturday 4 July 2009, Reliance Industries contended that the high court had erred in deciding the three terms - quantity, tenure and price of gas supply to power plants of Reliance Natural Resources (RNRL) affiliates.

Shares of three state-run oil marketing BPCL, HPCL and Indian Oil Corporation fell 3.68% to 4.17% as the Union Budget 2009-2010 did not include a roadmap for decontrol of fuel prices in the country.

Bank stocks fell as increase in bond yields will result in diminution in value of banks' bond portfolio. India's biggest bank in terms of branch network State Bank of India (SBI) fell 8.6%.

India's largest private sector bank by net profit ICICI Bank fell 10.09%. India's second largest private sector bank by net profit HDFC Bank fell 5.88%.

Bond yields tumbled after Mukherjee announced plans to borrow a record Rs 4.51 lakh crore in FY 2010 to fund budget spending on roads, power and aid for the poor. Bond yields and bond prices are inversely related.

India's biggest dedicated housing finance firm by operating income Housing Development Finance Corporation (HDFC) fell 9% as the finance minister did not announce a hike in tax sops for housing loans contrary to market expectations.

Realty stocks fell as finance minister made no major announcement to boost the debt ridden sector reeling under slump in demand for new homes. DLF, Indiabulls Real Estate and Unitech fell by between 6.26% to 9.26%.

Metal stocks fell as the Finance Minister did not announced measures to safeguard the domestic industry against cheap imports. Tata Steel, Sterlite Industries, Hindalco Industries, Hindustan Zinc, National Aluminum Company fell by between 4.84% to 9.55%.

Capital goods stocks fell as measures announced by the finance minister in the budget fell short of market expectation. Siemens, Praj Industries, Thermax, Siemens, ABB, Thermax, Larsen & Toubro, Bharat Heavy Electricals rose by between 1.91% to 8.94%.

Power stocks fell as finance minister failed to announce major power sector reforms in the Union Budget . NTPC, Powergrid Corporation of India, Reliance Infrastructure, Reliance Power and Tata Power Company rose by between 5.06% to 12.47%.

IT stocks fell even as the Finance Minister extended deduction in respect of export profits under the Software Technologies Parks of India (STPI) scheme available under sections 10A and 10B of the Income-tax Act till the financial year 2010-11. Infosys, TCS and Wipro fell by between 2.27% to 3.75%. In order to tide over the slowdown in exports, the Finance Minister proposed to extend the sun-set clauses for these tax holidays by one more year i.e. for the financial year 2010-11. Last year, the benefit under this section was extended to one year till 2009-2010.

India's largest cigarette maker by sales ITC rose 3.13% after the Finance Minister left excise duty on cigarettes unchanged in the Union Budget 2009-2010.

Shares of fertiliser makers fell after the Finance Minister proposed a change in the method of subsidising fertiliser prices. Rashtriya Chemicals and Fertilizers, Nagarjuna Fertilizers & Chemicals, Zuari Industries, Chambal Fertilizers & Chemicals, National fertilizers, Gujarat State Fertilizers Company, Deepak Fertilisers and Petrochemicals Corporation, Tata Chemicals fell by between 4.56% to 11.31%. Finance Minister Pranab Mukherjee, while presenting the Union Budget for 2009-10, proposed a change in the method of subsidising fertiliser prices by shifting to a 'nutrient based subsidy regime' from a 'product pricing regime'

Shares of public sector companies fell after the Union Budget 2009-2010 lacked a clear road map on divestment in state-run firms. Mahanagar Telephone Nigam, Rashtriya Chemicals and Fertilisers, Engineers India, Power Grid Corporation of India, Shipping Corporation of India, Power Finance Corporation, Rural Electrification Corporation, Steel Authority of India (SAIL) and Mangalore Refinery and Petrochemicals fell by between 5.88% to 10.26%.

The government set an very small target of Rs 1120 crore from divestment for the financial year ending March 2010. The FM said the government will encourage people participation in divestment of state owned firms.

Market men had anticipated that the government may announce aggressive stake sale in public sector units (PSUs) where its stake is much higher than 51%. Finance Ministry's annual Economic Survey presented to the parliament on the eve of the budget had suggested raising Rs 25,000 crore annually from PSU divestment.

Shares of companies, whose business is related to the agriculture sector, fell even as the finance minister reiterated the government's thrust on the agriculture sector. Aries Agro, Advanta India, Jain Irrigation, Monsanto India and Kaveri Seed Company, fell by between 3.3% to 9.1%.

Finance Minister Pranab Mukherjee, while presenting the Union Budget for 2009-10, said government will ensure that agriculture grows by at least 4% per year.

He assured to pay additional interest rate subvention of 1% to farmers who pay short-term farm loans on schedule. He also proposed to extend agriculture debt waiver by six months and to provide additional Rs 1000 crore over interim budget for irrigation.

Cals Refineries clocked the highest volume of 9 crore shares on BSE. Unitech (2.65 crore shares), Suzlon Energy (2.22 crore shares), GVK Power & Infrastructure (1.95 crore shares) and IFCI (1.69 crore shares) were the other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 382.04 crore on BSE. Educomp Solutions (Rs 330.34 crore), Reliance Infrastructure (Rs 305.24 crore), Reliance Capital (Rs 253.22 crore) and ICICI Bank (Rs 241.72 crore) were the other turnover toppers in that order.

Dish TV India slipped 7.71% after the Finance Minister imposed 5% customs duty on set top boxes.

Winners and Losers - Budget 2009

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Pre Session Commentary - July 6 2009

Today domestic markets are likely to open with a positive gap on the occasion of the UPA government’s budget to be announced in a couple of hour’s time. The sentiments of investors are optimistic on the government’s initiative to bring new policies and amendments that would help sustain the GDP growth. The investors have exuded their level of interest and optimism on Friday’s trade when markets closed with phenomenal gain at broader level.

On Friday, domestic markets closed with phenomenal gains. After a weak opening the domestic markets managed to earn substantial gain towards the end. The range bound trading in the Asian and European markets hardly guided domestic market sentiments. Infact, the reformist Railway Budget which did not include any freight increase was positive for key sectors like Steel, Cement etc. The government’s thrust was more on infrastructure development of Railways through public-private partnership and also optimum utilization of existing land and other resources. Sectors like Bankex, CG, Power, Realty and HC gained by 2.19%, 1.90%, 1.84%, 1.80% and 1.18% respectively. BSE Midcap and Smallcap managed to close with gains of 0.83% and 0.43% respectively. Today domestic markets are likely to trade in the northward direction with firm positive gain.

The BSE Sensex closed up by 254.56 points at 14,913.05 and NSE Nifty ended up by 75.40 points at 4,424.25. BSE Mid Caps closed with gains of 42.95 points and 24.71 points at 5,187.22 and 5,824.95 respectively. The BSE Sensex touched intraday high of 14,945.85 and intraday low of 14,499.74.

On Friday, US Markets were closed on the celebration of Independence Day.

Today major stock markets in Asia are trading mixed. Hang Seng is flat at 18,205.34. Shanghai Composite is up by 9.877 points at 3,098.24. Japan''s Nikkei is trading down by 154.77 points at 9,661.30. Strait Times is low by 15.36 points at 2,284.39. Seoul Composite is up by 4.13 points at 1,424.17 and KLSE Composite is flat at 1,078.71.

On Friday, the partially convertible rupee ended at Rs 47.89/91, 5 paise stronger than its previous close at 47.94/95. The rupee gained strength on the back of phenomenal gain in local stock markets.

On BSE, total number of shares traded were 35.57 Crore and total turnover stood at Rs 5,578.05 Crore. On NSE, total number of shares traded was 79.92 Crore and total turnover was Rs 16,000.4 Crore.

Top traded volumes on NSE Nifty – Suzlon Energy with total volume traded 45787182 shares, followed by Unitech with 32303807, Tata Steel with 18143006, SAIL with 12185409 and DLF with 12149973 shares.

On NSE Future and Options, total number of contracts traded in index futures was 615112 with a total turnover of Rs 12,936.98 Crore. Along with this total number of contracts traded in stock futures were 513559 with a total turnover of Rs 15,190.77 crore. Total numbers of contracts for index options were 1114757 with a total turnover of Rs 25,014.09 Crore and total numbers of contracts for stock options were 54028 and notional turnover was Rs 1,699.63 Crore.

Today, Nifty would have a support at 4,475 and resistance at 4,539 and BSE Sensex has support at 15,118 and resistance at 15,453.

Market may exhibit strong volatility

The presence of a sharp intra-day volatile trend due to lack of clarity may see the market remain edgy and move on the either side of the zone. Mixed fund inflows into the domestic equities and the global market trend will be closely monitored for further direction. Among the key local indices, the Nifty has good support around 4400 and upside till 4470-4500 levels. The Sensex has a likely support at 14750 and may face resistance at 15050.

US indices remained closed on Friday on account of Independence Day.

Indian floats trading on the US bourses were traded weak. Among the laggards Rediff lost 6.01% while Infosys & Patni Computers move down over 3% each. Tata Motors, ICICI Bank, HDFC Bank and MTNL ended in negative territory. However, Satyam and Wipro ended with steady gains.

Crude oil prices in the international market edged lower, with the Nymex light crude oil for August delivery lost by $2.58 to close at $66.73 per barrel. In the commodity space, the Comex gold for August series lost $10.30 to settle at $931 a troy ounce.

Daily trend of FII/MF investment in equities
On July 02 2009, FIIs were net buyers of stocks to the tune of Rs402 crore (purchases worth Rs2,303 crore and sales of Rs1,901 crore) while domestic mutual funds were net sellers of stocks to the tune of Rs207 crore (purchases worth Rs756 crore and sales of Rs963 crore).

Stocks with positive bias:- Powergrid (SL – 110.55), infra stocks (GMR infra, IRB, IVRCL), GE shipping, JP associates.
Stocks for investments:- IDBI, Balrampur chini , Bajaj Holdings,Emco

India Budget Speech Live

The Budget Starts at 11 AM

You can watch the Live Video here

Union Budget Live Video 2009

Union budget to set the direction for market

Investors may remain cautious ahead of the Union Budget. However market may see a subdued start tracking weak Asia. The Union Budget 2009-2010 at 11:00 IST today, 6 July 2009, will play a key role in dictating further market direction as it will help to gauge the new government's policy stance. The mega event becomes all the more important in the wake of the global financial crisis.

The market is expecting a big bang economic reforms by the Congress-led government after its thumping victory in the 15th Lok Sabha elections. Sector specific action may be seen as finance minister may announce measures to support growth and incentives for sectors like infrastructure, auto, realty, textiles, education, agriculture, steel, healthcare among others.

Asian stocks declined today as commodities prices and shipping rates dropped amid concern the global economic recovery will falter. The key benchmark indices in Hong Kong, Japan, Singapore and Taiwan fell by between 0.4% to 1.58%. The key benchmark indices in China and South Korea rose by between 0.23% to 0.6%.

Trading in US futures indicated Dow could fall 46 points at the opening bell today, 6 July 2009.

The US markets had remained shut on Friday, 3 July 2009 on account of their Independence Day.

Back home, the broad expectations from the budget are thrust on infrastructure, including easier financing of long-gestation infrastructure projects, a plan for disinvestment, some reforms such as hiking foreign direct investment limit for insurance and a clear road map to rein in the high fiscal deficit in the future. Consumption is likely to be shored up through the various rural spending programmes. At the same time, the government may rollback tax sops given to sectors doing well such as services.

The corporate sector is expecting a removal of the fringe benefit tax (FBT). Under the current dispensation, an employer has to pay FBT at 30% on the fringe benefit, the taxable value of which is determined in accordance with a formula. FBT is a tax levied on perquisites-or fringe benefits -provided by an employer to his employees.

Domestic brokerages and fund houses want the government to remove securities transaction tax (STT) on trading in securities in the Budget. The Securities & Exchange Board of India (Sebi) members have already forwarded the demand of premier stock exchanges, BSE and NSE, to Finance Minister Pranab Mukherjee for scrapping STT in the Budget.

STT, which was introduced in the Union Budget 2004-05 by the then Finance Minister P Chidambaram, taxes every purchase and sale of securities entered into in a recognised stock exchange in India in securities like shares, debentures, bonds, and units of mutual funds. Equity investors pay an STT of 0.125% for every transaction in cash for the delivery of shares.

The Economic Survey for 2008-09 presented by Finance Minister Pranab Mukherjee in Parliament on 2 July 2009 said that India's industry is recovering from a slowdown in the last financial year. There are positive signs the Indian industry may have weathered the most severe part of the shock and is moving toward a recovery, the survey indicated.

Meanwhile, the Employees' Provident Fund Organization (EPFO) on Saturday deferred the decision on investing 15 per cent of its corpus of about Rs 1.82 lakh crore into equity, a move which could have seen Rs 25,000 crore flowing into the capital markets. EPFO has decided to retain the interest rate at 8.5 per cent for year 2009-10 for 50 million provident fund subscribers.

As per the provisional figures on NSE, the foreign funds bought shares worth Rs 210.82 crore and the domestic funds bought shares worth Rs 298.58 crore on Friday, 3 July 2009.

SGX Nifty trading flat - July 6 2009

SGX Nifty trading flat 4,422.0 +2.0

Daily News Roundup - July 6 2009

RNRL moves Supreme Court to make Reliance Industries’ execute Bombay HC order. (BL)

SBI has offered a loan of up to US$1bn to Bharti Airtel to partly fund its planned stake buy in South Africa’s MTN.(TOI)

Centre has advised SBI not to pursue with the RBI the issue of acquisition of State Bank of Indore.(BL)

Ashok Leyland June sales down 44% yoy.(BL)

ACC has reported a marginal rise of 1% in dispatches at 1.81mn tonnes in June.(BL)

NTPC may sign gas deal with Reliance Industries, says a top executive.(Mint)

JSW Steel output up 45% to 1.4mn tonnes in Q1 FY10.(FE)

Tata Capital, a subsidiary of Tata Sons, has tied up with Japanese securities firm Mizuho Securities to raise a private equity fund in Japan.(DNA)

SAIL scraps Rs20bn contract with POSCO.(Mint)

HUL to streamline its product portfolio.(DNA)

ABG Shipyard to raise US$150mn.(FE)

Government likely to raise Rs18.5bn from NHPC IPO.(FE)

Reliance Communications gets shareholders’ approval for stake sale.(FE)

JSW Steel plans to infuse up to Rs1bn into JSW Severfield Structures, its UK-based JV with Severfield Reeve Structures.(DNA)

Shriram Transport Finance to raise Rs10bn via NCDs.(FE)

Sesa Goa, JSW Steel and Rashtriya Ispat Nigam, amongst others are in race for acquiring mining rights for the largest iron ore deposit in Afghanistan. (BS)

Bharti Airtel and MTN which are in US$23bn merger talks, to approach SEBI to grant an exemption to the South African firm from making an open offer here following the deal. (ET)

Wockhardt is in talks with a few MNCs to sell two of its best-selling brands Protinex and Farex. (ET)

DLF to raise funds worth Rs5bn in the coming weeks by selling land. (ET)

JP Hydro plans to raise up to Rs15bn through issue of financial securities in the market and merge Jaiprakash Power Ventures with itself. (BS)

Hindustan Construction raised Rs4.8bn through the issue of shares to QIBs through private placement. (BS)

Chennai Petroleum plans to invest over Rs70bn in the next five years on its expansion plan and on connectivity projects. (BS)

Uco Bank to invest Rs450mn in its general insurance company, which would be operational by March next year. (BS)

GMR Infra plans Rs25bn Vemagiri Power expansion, to put up an additional capacity of 750 Mw in Vemagiri, adjacent to its existing natural gas-fired combined cycle power plant of 388.5MW. (BS)

BSNL plans to offer stake to a foreign telecom entity, as an alternative to an IPO. (BS)

Hero Group shelves plans to enter the commercial vehicle segment. (BS)

Pantaloon Retail plans to invest close to Rs3.5bn over the next one year to expand its value hypermarket chain Big Bazaar. (BS)

Cinemax to invest around Rs180-200mn by the end of financial year 2009-10 on expansion plans in Gujarat. (BS)

Dalmia Cement to set up a second manufacturing facility in Tamil Nadu with an investment of around Rs8bn. (BS)

SREI Infrastructure emerges as the lowest bidder for the Rs11.41bn road project on National Highway-91 in Uttar Pradesh. (BS)

SpiceJet to look for acquisition opportunities. (ET)

Essar may pick up operating stake in GSPC’s Gujarat block.(BL)

Foreign exchange reserves increased by US$932mn to US$265bn for the week ended June 26.(BL)

Railway Ministry appoints Sam Pitroda as the head of an expert committee for suggesting schemes to use its optical fibre cable network commercially.(BL)

SEBI has made it mandatory for foreign venture capital investors to obtain firm commitment of at least US$1mn from their investors for eligibility to apply for registration.(BL)

EPF interest rate maintained at 8.5%.(BL)

Government cancels coal linkages of 25 captive power plants with combined capacity of 1,292MW.(FE)

Cargo traffic at major ports sees 2% growth.(Mint)

Telecom Dispute Settlement Appellate Tribunal has asked DoT to decide on the policy for allocating 2G spectrum within six weeks.(BL)

Average assets under management of mutual funds up 5% at the end of June.(TOI)

Commerce and Industry Ministry has proposed a marginal hike in FDI limit in FM radio-from 20% to 24%.(TOI)

Department of Telecom has sought sector regulator TRAI’s views on auctioning new bands of airwaves outside the spectrum bands allotted to service providers so far. (ET)

Department of Industrial Policy and Promotion to meet on July 10 to discuss the foreign direct investment policy in the cigarette industry. (BS)

It’s time for Plan B

Plans are only good intentions unless they immediately degenerate into hard work.

Finance Minister Pranab Mukherjee will deliver his first full budget after 25 years. Quite a few measures have already been revealed. Not all of those will find a place in the budget though. Crucial road maps such as the ones on Disinvestment, GST, STT and FBT could come through. It’s a no-brainer that allocations towards UPA’s pet social schemes will be bolstered. There will also be a renewed thrust on infrastructure.

A return to fiscal prudence will most likely be postponed till the global economy revives. A statement of intent towards a few critical reforms should cheer the markets. Take a call only after going through the fine print. After all, this remains a one-day event. Keep in mind that the global scene doesn’t look promising. Doubts continue to emerge on the pace and timing of the global recovery.

We expect a nervous start. Don’t bet too much on the budget. Other variables like earnings, liquidity, monsoon and global conditions are likely to drive the sentiment going forward. In case the budget remains high on rhetoric, better have Plan B ready.

FIIs were net buyers in the cash segment on Friday at Rs2.11bn while the local institutions too poured in Rs2.98bn. In the F&O segment, the foreign funds were net buyers at Rs9.1bn.

Asian stocks are mostly down this morning amid renewed concerns that the nascent global economic recovery could run out of steam. The MSCI Asia Pacific Index lost 0.1% to 102.74 as of 9:50 a.m. in Tokyo. The regional benchmark has slipped 2.4% since climbing to an eight-month high on June 12. The index has rallied 45% since falling to a more than five-year low on March 9. Japan's Nikkei 225 Stock Average and the Hang Seng index in Hong Kong are down 1-1.5%.

United States' Vice President Joe Biden says that the Obama administration misread how bad the economy was, when the stimulus package was being put together at the beginning of the year. Unemployment, at 9.5%, is far higher that the 8% top promised at the time the stimulus was passed. But Biden said in an interview it was too early to say whether additional stimulus money was needed.

The experts are divided on whether the green shoots of global recovery, which have led to a worldwide rally in the past three months, are for real. One school of thought says the so-called recovery might turn out to be a chimera. Others predict that any global recovery, even if it does materialise, may not sustain for long before the same starts to fizzle out. The optimist cap is of the view that historically, deep depressions/recessions have been followed by strong rebounds.

What we would suggest is that amid all the gloom and doom, India does promise to outperform, especially if the raingods keep showering their blessings. However, one should not get carried away, as here too, the recovery may not be as fast as one expects it to be. Also, valuations have soared to levels where one may not be too comfortable buying stocks. There is more likelihood of the market falling then rising from current levels. So, wait for a while before forming a broader view on the markets.

In New York, the US financial markets were closed on Friday for the July 4 holiday.

The European markets ended nearly unchanged on Friday, as most market players chose to remain guarded at the end of another bad week, after a few economic reports put a question mark on claims that the global economic slump may be moderating. What made the matters worse was lack of cues from the US markets, which were shut on account of the Independence Day holiday.

After rising sharply on Wednesday, a worse-than-expected US jobs report dealt a blow to recovery hopes on Thursday and pulled European shares sharply lower in the afternoon of that session. On Friday, the pan-European Dow Jones Stoxx 600 index finished almost unchanged at 204.08 amid low volumes.

The UK's FTSE 100 index ended 0.1% higher at 4,236.28, while the French CAC-40 index rose 0.1% to 3,119.51, while the German DAX index slipped 0.2% to 4,708.21.

The Dow Jones Stoxx 600 index, which is a regional benchmark, fell 0.2% on the week after reports showed that unemployment in Europe and the US rose. The regional stock benchmark is down 4.8% since June 12 on speculation that the recent spurt in share prices has been overdone without a commensurate improvement in the economic outlook.

National benchmark indexes fell in eight of the 18 western European markets last week. The UK’s FTSE 100 slipped 0.1% on the week, while Germany’s DAX dropped 1.4%. France’s CAC retreated 0.3%.

Unemployment in the 16-member euro region increased to 9.5% in May from a revised 9.3% in April, the European Union (EU) statistics office in Luxembourg said this week. The US unemployment rate rose to 9.5% in June, the highest since August 1983. A separate report showed confidence among US consumers slipped unexpectedly in June. The Conference Board’s sentiment index decreased to 49.3 from a revised 54.8 in May.

Data released on Friday showed the second straight month of expansion for the UK services sector in June, though the reading was below consensus estimates. Euro-zone retail sales fell 0.4% in May and the Euro-zone June composite PMI increased to 44.6.

In last week's other important development, European Central Bank (ECB) President Jean-Claude Trichet signaled that the central bank has no immediate plans to cut interest rates again and said the euro region’s economy will start to recover in the middle of 2010. The ECB kept its key lending rate at a record low of 1%.

Asian stocks fell last week, the second weekly decline in three, as government data in the US and Europe revealed that the labour markets in two of the world's biggest economies remains in doldrums.

The MSCI Asia Pacific Index lost 0.8% last week, retreating from last weeks 2.2% gain. That pared the regional stock benchmark's record 28% in the three months ended June 30 on optimism that the global economy is stabilizing.

The Asian stock benchmark has now climbed 47% since reaching a more than five-year low on March 9.

The BSE Sensex surged 257 points at 14,915 after touching a high of 14,946 and a low of 14,499. The index had opened at 14,553 against the previous close of 14,658.

The NSE Nifty surged 75 points or 1.8% to shut shop at 4,424.

Asian markets ended mixed; the Nikkei index in Japan slipped 0.7% at 9,816, Australia's S&P/ASX ended down 1.2% at 3,828. Hang Seng index gained 0.2% at 18,203.

Elsewhere in the Europe, stocks were trading in the red. The FTSE index was flat at 4,234. The DAX index was flat at 4,716. CAC 40 index was down 0.3% at 3,106.

Coming back to India, among the BSE Sectoral indices BSE Bankex index was the top gainer gaining 2.2%, followed by the BSE Capital Goods index up 2.1%, BSE Pharma index up 2% and BSE Power index up 2%.

The BSE Mid-Cap index ended marginally higher by 0.8% and BSE Small-Cap index was up 0.3%.

In the Sensex, the major gainers were HDFC, Tata Steel, JP Associates, M&M, L&T, SBI, ICICI Bank and Reliance Infra.

On the other hand, major losers were Hindalco, Hero Honda, Sterlite, RCom, Grasim and DLF.

Among the big gainers in the broader market were Jain Irrigation, Shriram Transport, Glenmark, Chambal Fert, IDFC and Ashok Leyland.

Outside the frontline indices, the top losers included GMDC, REI Agro,KSK Energy, Jai Corp, Bhushan Steel, Apollo Hosp, BEML and Exide Ind.

SGX Nifty Live Update - July 6 2009

SGX Nifty trading at 4,439.0 +19.0

Cummins India

Shareholders can stay invested in Cummins India (CIL), a leading manufacturer of diesel engines. Though the stock is not inexpensive at Rs 273 (13 times its FY09 per share earnings), what lends confidence is its strong position in the domestic market. With the new government likely to increase thrust on improving road and power infrastructure in the country, Cummins appears well-positioned to leverage on the opportunity.

However, a drastic fall expected in its high margin export revenues may still mute overall sales and profits for the year.

Hit by recessionary trends in the overseas markets, the company expects its export revenues — in spite of the backing of its MNC parent, Cummins Inc — to be hit during the year.
Results scorecard

For the year-ended March 2009, Cummins India reported a sales and earnings growth of over 40 per cent and 54.5 per cent respectively. The topline growth, however, was helped by the increased contributions from Cummins Sales and Service and Cummins Auto Services, two subsidiaries that the company had amalgamated with itself during the year.

Excluding contributions from the two, the company’s revenue and profit growth was limited to about 23 per cent and 32 per cent respectively.

On the margin front too, the company managed to better itself, what with operating margins expanding by 1.4 percentage points to 14.6 per cent, helped primarily by lower raw material cost.

Cummins’ performance for the last quarter, however, does not reflect a healthy picture. Net sales (excluding the amalgamated subsidiaries) declined 8.2 per cent, while its profits dropped by over 18 per cent.

Interestingly, the company saw its exports contribution equal that of its domestic revenues during the quarter.

While increased sourcing by Cummins Inc drove the export revenues, the management does not expect a continuance of such volumes in exports in the coming quarters.

On the contrary, it expects the export revenues to slide drastically due to the recessionary trends in the overseas target markets.

Cummins India’s guidance projects a fall of over 50-70 per cent in its export revenues for the year. While on the face of it such guidance may appear a tad too pessimistic considering that there have been slight signs of revival in most global economies, it still may not be way off the mark.

Any revival in global economies may take a couple of quarters to translate into orders for Cummins India. Besides, Cummins Inc itself has given a guidance with a 30 per cent fall in revenues this year.

Even so, channel inventories of its parent may be the first to get cleared in the event of revival in demand; curtailing export revenues for the Indian arm.

This may call for a greater reliance by the company on the domestic market.
key to growth

Cummins India appears well-placed to benefit from the government’s thrust on improving infrastructure, with its domestic operations straddling high potential sectors such as infrastructure, road development, telecom, construction, mining, auto and power.

While the bulk of its domestic revenues are made up from power generation (30-35 per cent) and industrial (10-15 per cent), revenues from the auto sector (5 per cent) may perk up in the coming years.

The JNNURM (Jawaharlal Nehru National Urban Renewal Mission) scheme, under which the government is aiming to provide improved public transport system in 63 cities, may help the company rake in decent growth in the auto segment, as the scheme would provide assistance to States as a one-time measure for the purchase of buses for the urban transport system. The company has already won the Delhi tender for the Commonwealth Games for the supply of engines for 2,500 buses.

Besides, with the availability of natural gas likely to improve, the demand for its gas-based generators and engine may also look up. That said, it still remains to be seen how far Cummins succeeds in capturing a meaty share of the domestic market, even as the shrinking overseas market is certain to attract competition.

While the company has made clear its intention not to participate in any price war, CIL may lose volume growth if competitors do cut prices.

However, to its credit, CIL’s strong balance-sheet with little debt and high cash (Rs 400 crore), not to mention its long-standing relations in the industry, do make it a strong contender in the domestic market.

Trends in order and revenue inflows over the next couple of quarters may, therefore, bear a close watch.

via BL