HUL vaults 7.5% after bumper Q1 results

Key benchmark indices edged higher, with data showing that foreign funds remained buyers of Indian stocks on Monday, 23 July 2012, boosting sentiment. The market snapped two-day losing streak. The barometer index, BSE Sensex, advanced 40.73 points or 0.24%, off close to 45 points from the day's high and up about 80 points from the day's low. The market breadth was negative. The Sensex had declined 401.50 points or 2.32% in two trading sessions to settle at 16,877.35 on Monday, 23 July 2012, from a recent high of 17,278.85 on 19 July 2012. The Sensex has lost 511.90 points or 2.93% in this month so far (till 24 July 2012). The Sensex has jumped 1,463.16 points or 9.46% in calendar 2012 so far (till 24 July 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 1,782.22 points or 11.77%. From a 52-week high of 18,944.60 on 26 July 2011, the Sensex has lost 2,026.52 points or 10.69%. Coming back to today's trade, index heavyweight Reliance Industries (RIL) edged higher. FMCG stocks rose across the board after strong Q1 results from FMCG giant Hindustan Unilever (HUL) and branded packaged tea major Tata Global Beverages. HUL surged to record high. Godrej Consumer Products and Marico also hit record highs and Bajaj Corp hit 52-week high. Sugar stocks were in demand after domestic sugar futures moved higher. Shriram Transport Finance Company declined after poor Q1 results. Canara Bank fell as the state-run bank's ratio of net non-performing assets rose to 1.66% of net advances as on 30 June 2012 from 1.46% as on 31 March 2012. Lupin hit record high after strong Q1 results. India's third largest software services exporter by revenues Wipro dropped after the company at the time of announcement of Q1 results said it expects revenue from IT services business to remain almost flat in Q2 September 2012 over Q1 June 2012. Data showing that foreign funds remained net buyers of Indian stocks on Monday, 23 July 2012, boosted sentiment on the domestic bourses. Foreign institutional investors (FIIs) bought shares worth a net Rs 118.60 crore from the secondary equity markets on Monday, 23 July 2012, as per data from Securities & Exchange Board of India (Sebi). FIIs have made substantial purchases of Indian stocks this month. FII inflow into secondary equity markets totaled Rs 5580.50 crore in 15 trading sessions from 3 July to 23 July 2012 as per Sebi data. The market edged higher in early trade. The market regained strength after trimming intraday gains to hit fresh intraday low in morning trade. The market retained positive zone in mid-morning trade. A bout of volatility was witnessed as key benchmark regained strength after paring gains in mid-morning trade as most Asian stocks rose. The market retained positive terrain in early afternoon trade. Key benchmark indices pared gains in afternoon trade. Volatility ruled the roost as key benchmark indices regained positive terrain to hit fresh intraday highs after slipping into the red to hit 4-week lows in mid-afternoon trade. The market retained positive zone in late trade. The market may remain volatile this week as traders roll over positions from the near-month July 2012 series to August 2012 series. The July 2012 derivatives contracts expire on Thursday, 26 July 2012. The BSE Sensex was up 40.73 points or 0.24% to settle at 16,918.08, its highest closing level since 20 July 2012. The index jumped 85.39 points at the day's high of 16,962.74 in mid-afternoon trade. The index fell 37.65 points at the day's low of 16,839.70 in afternoon trade, its lowest level since 26 June 2012. The S&P CNX Nifty rose 10.25 points or 0.2% to settle at 5,128.20, its highest closing level since 20 July 2012. The Nifty hit high of 5,144 in intraday trade. The index hit a low of 5,103.25 in intraday trade, its lowest level since 26 June 2012. The BSE Mid-Cap index rose 0.16% and the BSE Small-Cap index gained 0.13%. Both these indices underperformed the Sensex. BSE clocked turnover of Rs 1809 crore, higher than Rs 1631 crore on Monday, 23 July 2012. The market breadth, indicating the overall health of the market, was negative. On BSE, 1,396 shares fell and 1,391 shares rose. A total of 130 shares were unchanged. From the 30-share Sensex pack, 15 stocks declined and rest of them rose. Shares of ONGC and GAIL (India) rose 1.15% to 1.19% after the two companies signed 3 collaboration agreements to cooperate in the field of natural gas. GAIL (India) said during trading hours today, 24 July 2012, that the company and ONGC have signed a gas co-operation agreement for sale and purchase of gas from existing and new finds of ONGC to GAIL (India) initially for a period of 3 years, with a provision of extending it further. Under the agreement, the two companies have agreed to enhance the availability and effective utilization of natural gas from new and upcoming fields of ONGC for supply of gas to customers through GAIL's infrastructure. The two companies also signed a Swap Agreement and Sales and Purchase Agreement for supply/sale of LNG by GAIL (India) to ONGC for shrinkage of C2+ Extraction at Dahej, from existing GSPA quantities from PLL and purchase of equivalent domestic gas made available by ONGC from domestic sources, subject to allocation by Ministry of Petroleum and Natural Gas. This will pave the way for commissioning of C2+ extraction plant by ONGC, GAIL (India) said in a statement. Pursuant to extraction, the C2+ components shall be supplied to ONGC Petro-additions (OPaL) for manufacturing petrochemicals at Dahej SEZ, the company said in a statement. GAIL (India) has around 19% equity in OPaL and has around 38% marketing rights of petrochemicals produced from OPaL. A shareholders agreement (SHA) pertaining to OPaL was also signed by GAIL (India) and ONGC as shareholders of OPaL. In addition, a Polymer Marketing Side Letter to SHA was signed among GAIL (India), ONGC, and OPaL under which GAIL (India) has the right to market part of polymers produced by OPaL both in domestic as well as export markets. This arrangement is expected to enhance GAIL (India)'s marketing share for polymers in the country, the company said in a statement. Besides polymer marketing rights, as per the Polymer Marketing Side Letter to SHA, GAIL (India) has the right to off-take Butadiene produced in OPaL plant to produce value added products through a special purpose vehicle (SPV), GAIL (India) said in a statement. Index heavyweight Reliance Industries (RIL) gained 0.81% to Rs 724.55. The stock hit a high of Rs 726.30 and a low of Rs 718.15. The company last week said its net profit fell 21% to Rs 4473 crore on 13.4% growth in turnover to Rs 94926 crore in Q1 June 2012 over Q1 June 2011. The gross refining margin (GRM) stood at $7.6 per barrel in Q1 June 2012, matching the GRM of Q4 March 2012, but sharply lower than GRM of $10.3 a barrel in Q1 June 2011. With regard to oil and gas exploration and production operations, RIL said it has made significant efforts towards augmenting production from KG D6. The company said it is planning to submit a Revised Field Development Plan (RFDP) for D1-D3 which is aimed at maximizing gas recovery from the existing fields. It also plans to further pursue approval of RFDP of D 26 (MA) submitted in the earlier quarter. To expedite the development projects of other discoveries, RIL is preparing development plans based on an integrated concept which is planned for submission in Q3 December 2012, RIL said in a statement. RIL has also commenced pre-development activities in the D6 block which includes Engineering Surveys i.e. Geophysical Surveys & Geotechnical Investigations and Conceptual Engineering and FEED With regard to telecom business, RIL said its subsidiary, Infotel Broadband Services (Infotel), which has emerged as a successful bidder in all the 22 circles of the auction for Broadband Wireless Access (BWA) spectrum, is in the process of setting up a world class Broadband network using state-of-the-art technologies and finalizing the arrangement with leading global technology players, service providers, infrastructure providers, application developers, device manufacturers and others to help usher the 4G revolution into India. Infotel plans to provide end-to-end solutions that address the complete digital value chain across various digital services in key domains of national interest such as education, healthcare, security, financial services, government-citizen interfaces, entertainment and working on building the requisite parts of this customers' experience which fundamentally change the lives of hundreds of millions of Indians, RIL said. FMCG stocks rose across the board after strong Q1 results from FMCG giant Hindustan Unilever (HUL) and branded packaged tea major Tata Global Beverages. Index heavyweight and cigarette maker ITC gained 0.4%. FMCG major HUL jumped 7.5% to Rs 476.05 after the company announced after market hours on Monday that net profit rose 112.3% to Rs 1331.19 crore on 13.7% growth in net sales to Rs 6250.15 crore in Q1 June 2012 over Q1 June 2011. The stock hit a record high of Rs 477.90 in intraday trade today, 24 July 2012. Profit before interest and tax (PBIT) grew by 30% with PBIT margin improving 180 basis points (bps). Profit after tax but before exceptional items, PAT (bei), grew by 48% to Rs 855 crores during the quarter. HUL said inflationary pressures during the quarter came primarily from currency depreciation. Cost pressures were managed dynamically through judicious pricing coupled with relentless focus on buying efficiencies and cost savings. Overall media intensity was up and A&P was maintained at competitive levels, higher by Rs 187 crore (+160 bps) in the quarter. HUL Chairman Harish Manwani commented: "We have delivered another quarter of strong volume led growth with an improvement in margins. The environment continues to be challenging in terms of inflation and a general economic slowdown. In this context, we are implementing our strategy with even greater rigor and managing our business dynamically to remain competitive and cost efficient. We continue to drive innovation and execution to strengthen our core business while leading market development in the emerging categories". Tata Global Beverages jumped 6.79% after the company said its consolidated profit from ordinary activities after finance cost but before exceptional items jumped 55% to Rs 153 crore in Q1 June 2012 over Q1 June 2011. Tata Global Beverages' total operating income jumped 18% to Rs 1725 crore in Q1 June 2012 over Q1 June 2011, reflecting improved performance in most major markets coupled with favourable foreign exchange translation impact, the company said in a statement. Tata Global Beverages said its profit from ordinary activities before tax at Rs 148 crore and profit after tax at Rs 99 crore in Q1 June 2012 were both lower when compared to corresponding period of the previous year primarily due to the impact of exceptional income. Exceptional income in the corresponding quarter of the previous year represented profit arising from sale of non core investments partially offset by exceptional expenditure, it said. Commenting on the Q1 results, Mr Harish Bhat, Managing Director and CEO, Tata Global Beverages said, "Our operating results for the first quarter of this financial year represent significant progress over the same quarter of the previous year. We have seen good volume growth and performance in key global markets including the United Kingdom and India, notwithstanding selective price increases which were implemented in response to higher commodity costs. In addition, we continue to drive a range of operating efficiencies, which is yielding good results". "Our focus on category expansion and innovative new beverage products such as Tata Water Plus and Tetley Chai Latte will continue to drive our company's growth. These beverages are designed to delight our consumers, and add significant value to their lives. Alongside these products, our key strategic alliances will also create big new opportunities for the future", Mr. Bhat added. Dabur India rose 0.08%, with the stock advancing for the second straight day in a row after strong Q1 results. The company announced during market hours on Monday its consolidated net profit rose 16.95% to Rs 149.40 crore on 22.01% growth in total income to Rs 1496.16 crore in Q1 June 2012 over Q1 June 2011. Godrej Consumer Products rose 4.49% to Rs 610.50. The stock hit a record high of Rs 627.10 in intraday trade today. Marico rose 3.12% to Rs 188.20. The stock hit a record high of Rs 189.50 in intraday trade today. Bajaj Corp jumped 5.56% to Rs 140.50. The stock hit a 52-week high of Rs 144.45 in intraday trade today. PSU OMCs were mixed after state-run oil marketing companies raised petrol prices with effect Tuesday due to a rise in benchmark Singapore prices. HPCL rose 2.41%. Indian Oil Corporation and BPCL fell by between 0.09% to 0.75%. Petrol prices will go up by 70 paise per liter excluding state levies. State-run fuel retailers review petrol prices every fortnight. State-run oil marketing companies (PSU OMCs) suffer underrecoveries on domestic sale of diesel, LPG and kerosene at controlled prices. Lupin rose 2.08% to Rs 582.15 after company today, 24 July 2012, said its consolidated net profit jumped 33% to Rs 280.40 crore on 44% growth in net sales to Rs 2219.20 crore in Q1 June 2012 over Q1 June 2011. The stock hit a record high of Rs 587.70 in intraday trade today. Lupin said its materials cost declined by 3% to 37% of net sales at Rs 818.70 crore in Q1 June 2012 as compared to Rs 616.90 crore in Q1 June 2011. Personnel cost decreased by 0.6% to 13.6% of net sales at Rs 301.40 crore in Q1 June 2012 as against Rs 219.30 crore Q1 June 2011. Manufacturing & other expenses increased by 2.2% to 30.5% of net sales at Rs 676 crore in Q1 June 2012 from Rs 437.20 crore in Q1 June 2011. Revenue expenditure on R&D stood at 8% of net sales at Rs 178.20 crore in Q1 June 2012, higher than 7% of net sales in Q1 June 2011. Lupin's operating working capital increased to Rs 1925.60 crore as on 30 June 2012 from Rs 1902.80 crore as on 31 March 2012. The working capital number of days stood at 78 days as on 30 June 2012 as against 99 days on 31 March 2012. Debt equity ratio stood at 0.27 as on 30 June 2012, lower than 0.32 as on 31 March 2012. Commenting on the results, Dr. Kamal K. Sharma, Managing Director, Lupin said: "We had a robust quarter. Strong operating performance aided by product launches and exceptionally strong growth across US, India, Japan and South Africa have helped us deliver yet another quarter of sustained growth". India's third largest software services exporter by revenues Wipro lost 2.93% after the company said it expects revenue from IT services business to remain almost flat in Q2 September 2012 over Q1 June 2012. The company announced before market hours today that as per International Financial Reporting Standards (IFRS) net income rose 18% to Rs 1580 crore on 24% rise in total revenues to Rs 10653 crore in Q1 June 2012 over Q1 June 2011. Wipro has projected a between 0.33% growth to 2.31% growth in revenue from IT services business at $1520 million to $1550 million in Q2 September 2012 over Q1 June 2012. Azim Premji, Chairman of Wipro, commenting on the results said: "In today's complex business environment, global corporations are increasingly investing in transformational technology initiatives to improve competitiveness. We see this shift as an opportunity for us to lead this change and help customers differentiate in this fast evolving market". Suresh Senapaty, Executive Director & Chief Financial Officer of Wipro, said: "We have seen high levels of volatility in currencies globally. We have improved profitability, while continuing to invest for growth". T K Kurien, Executive Director & Chief Executive Officer, IT Business, said: "We have delivered revenues in line with our guidance in a volatile environment. We will continue to build differentiation and invest in technology driven business transformations for our customers as well as rewarding our talent". Infosys fell 0.77%. The company announced before market hours today that it will expand its presence in the United States with a new delivery center in Milwaukee, Wisconsin. The facility will provide end-to-end technology, consulting and systems integration services, and also will house a training center. Infosys is investing in the Midwest region of the United States to support its clients in the area, including Harley-Davidson. The initiation of a five-year engagement with the world's leading American motorcycle manufacturer was the catalyst for locating the new delivery center in Milwaukee. Harley-Davidson's contract with Infosys provides a range of technology services including applications management, infrastructure support and hosting services. As part of this long-term partnership, Infosys also will establish a training center to facilitate knowledge reuse and to conduct education related to information technology operations and business processes. L&T fell 1.45% to Rs 1354.55, with the stock sliding for the second straight day on profit booking after the company reported good Q1 results during trading hours on Monday. The company's recurring profit after tax rose 19% to Rs 890 crore on 26% growth in gross revenue to Rs 12078 crore in Q1 June 2012 over Q1 June 2011. The L&T stock had witnessed pre-result rally. The scrip had jumped 22.52% to settle at Rs 1,390.05 on Friday, 20 July 2012, from a recent low of Rs 1,134.50 on 1 June 2012. L&T said the healthy revenue growth in Q1 June 2012 was on the back of a strong order book and good progress in execution of various jobs. International sales constituted 17% of the total revenue in Q1 June 2012, L&T said in a statement. L&T's order inflow jumped 21% to Rs 19594 crore in Q1 June 2012 over Q1 June 2011 despite weak investment sentiment and prevailing global uncertainties, the company said. The major orders came from infrastructure, buildings & factories and power transmission & distribution sectors, L&T said in a statement. L&T's order book stood at Rs 153095 crore as on 30 June 2012. With regard to future business outlook, L&T said that with its enhanced capacities and presence in the diverse sectors, the company is in a good position to harness the opportunities as they emerge. The superior execution capabilities and growing order book provide visibility to sustained revenue growth in the medium term, L&T said in a statement. On the international front, select markets in the Middle East, South East Asia and CIS countries hold promising prospects where the company is strengthening its presence, L&T said in a statement. Among other capital goods stocks, Thermax, BEML and Bhel, dropped by between 0.96% to 1.21%. Shares of sugar refiners rose as domestic sugar futures extended gains, helped by higher demand and by concerns poor rainfall in cane-growing areas could trim next year's production. Bajaj Hindusthan, Balrampur Chini Mills and Shree Renuka Sugars rose by between 4.31% to 5.1%. The key August contract on India's National Commodity and Derivatives Exchange has so far risen 18.8% from the start of June. Shares of sugar companies had declined recently after the cabinet committee on economic affairs on 19 July 2012 approved a 17% hike in sugarcane price that mills pay to farmers to Rs 170 per quintal for 2012-13. Sugar mills will have to pay farmers at least Rs 170 per quintal as the FRP (the minimum price that sugarcane farmers are legally guaranteed) for cane in the new season starting 1 October 2012, up from Rs 145 per quintal in the current season, which may put further pressure on their working capital that is already stretched by poor cash flows. The FRP is the sugarcane price fixed by the Centre but there are some states like Uttar Pradesh and Tamil Nadu which announce their own rate called state advisory price (SAP). The SAP is higher than the FRP Banking majors rose across the board. The country's biggest commercial bank in terms of branch network State Bank of India gained 0.11%. The bank has raised the rate of interest on NRE Rupee Term Deposits for tenor of 3 years to less than 5 years from 8.75% to 9% on deposits of less than Rs 15 lakhs with effect from 17 July 2012. Among other PSU banks, Bank of India, Bank of Baroda and Punjab National Bank rose by between 0.19% to 0.67%. India's second biggest private sector bank in terms of branch network HDFC Bank rose 0.24%. India's largest private sector bank by net profit ICICI Bank gained 0.39%. Canara Bank fell 0.9% as the state-run bank's ratio of net non-performing assets rose to 1.66% of net advances as on 30 June 2012 from 1.46% as on 31 March 2012 and 1.33% as on 30 June 2011. The ratio of gross non-performing assets (NPA) stood at 1.98% of gross advances as on 30 June 2012, higher than 1.73% as on 31 March 2012 and 1.69% as on 30 June 2011. Canara Bank's net profit rose 6.8% to Rs 775.24 crore on 18.91% growth in total income to Rs 9165.47 crore in Q1 June 2012 over Q1 June 2011. Canara Bank's Capital Adequacy Ratio (CAR) stood at 13.22% as on 30 June 2012, lower than 13.76% as on 31 March 2012 and 13.37% as on 30 June 2011. Shriram Transport Finance Company rose 1.29%, with the stock reversing initial losses. The company during market hours today, 24 July 2012, said its consolidated profit after tax declined 3.09% to Rs 342.08 crore on 5.36% growth in net interest income to Rs 843.75 crore in Q1 June 2012 over Q1 June 2011. The company's consolidated total assets under management (AUM) stood at Rs 44064.25 crore as on 30 June 2012, higher by 16.1% compared to AUM of Rs 37954.74 crore on 30 June 2011. LIC Housing Finance rose 1.09% to Rs 251.05 on bargain hunting. The company during market hours today, 24 July 2012, said its net profit declined 11.21% to Rs 227.74 crore on 24.61% growth in total income to Rs 1767.30 crore in Q1 June 2012 over Q June 2011. The LIC Housing Finance stock had declined in the run up to the result announcement. The stock had fallen 5.87% in four trading sessions to settle at Rs 248.35 on Monday, 23 July 2012, from a recent high of Rs 263.85 on 17 July 2012. LIC Housing Finance said it has recorded a healthy growth in business during the first quarter. In the Individual Loan category, the company sanctioned Rs 4900 crore in Q1 June 2012, a growth of 33% over the corresponding period of the previous year, whereas the disbursements in that category was Rs 4470 crore, a growth of 29% over the corresponding period of the previous year. In the Developer Loan category, the company sanctioned Rs 408 crore in Q1 June 2012, as against Rs 5 crore in the corresponding period of the previous year, whereas the disbursements in that category was Rs 321 crore, against Rs 77 crore for the corresponding period of the previous year. The Gross NPAs of the company stood at 0.71% on June 30, 2012 as against 0.84% as on June 30, 2011. Net NPAs stood at 0.38% on June 30, 2012 as against 0.39% on June 30, 2011. LIC Housing Finance, Director & Chief Executive, Mr. V. K. Sharma, said: "Business environment has been very challenging; however, we have been able to grow our new disbursals despite the odds and are confident of maintaining a healthy growth rate for the rest of the year. Margins have been under strain owing to the high interest rate regime and high borrowing costs that has prevailed during the quarter and a lower Developer Loan portfolio. In Q1 June 2012, Developer Loan disbursals have started to improve, which is likely to help increase the margins going forward. The asset quality of the company continues to be good even in this environment". Auto stocks were mixed. India's largest car maker by sales Maruti Suzuki India rose 2.34% on bargain hunting after recent steep slide. Maruti on Saturday, 21 July 2012, said it has issued a notice declaring a lock-out at the company's Manesar, Haryana plant after labour unrest. India's largest commercial vehicle maker by sales Tata Motors was flat. M&M declined 0.9%. M&M has suspended its plans to develop a vehicle for the US market due to changes in the US regulatory and market situation. M&M has said that it will continue to monitor the US situation and remain flexible with its approach to this market. Two wheeler makers declined after state-run oil marketing companies raised petrol prices with effect Tuesday due to a rise in benchmark Singapore prices. Bajaj Auto declined 0.12%. The company at the time of Q1 June 2012 results last week said that it has undertaken proactive measures like rationalizing the end-user cost of vehicles in Sri Lanka and with these measures the company expects normalcy in exports to resume by end of Q2 September 2012. Bajaj Auto lost exports of about 20,000 units in Sri Lanka in Q1 June 2012 due to introduction of import barriers by that country. The company also lost export of about 25,000 commercial vehicles in Q1 June 2012 due to restrictions by importing countries and due to political unrest in Egypt, Bajaj Auto said in a statement on Wednesday. Bajaj Auto has said that domestic demand for motorcycles remains subdued. Hero MotoCorp extended recent losses after the company said at the time of announcement of Q1 June 2012 results last week that consumers in rural and upcountry markets could postpone buying of motorcycles if the monsoon remains weak. The stock shed 0.79%. Hero MotoCorp's net profit rose 10.31% to Rs 615.46 crore on 9.95% growth in turnover to a record Rs 6247.28 crore in Q1 June 2012 over Q1 June 2011. Hero MotoCorp also said last week that currency volatility is a point of concern and the rupee depreciation is likely to impact the company's margins. Idea Cellular rose 0.31%, with the stock reversing initial losses. Idea's consolidated net profit fell 2.03% to Rs 234.14 crore on 2.50% growth in total revenue to Rs 5503.70 crore in Q1 June 2012 over Q4 March 2012. Idea Cellular's consolidated net profit rose 32.08% to Rs 234.14 crore on 21.8% growth in net sales to Rs 5501.49 crore in Q1 June 2012 over Q1 June 2011. Idea said in a statement that due to introduction of Telecom Consumer Protection Regulation by TRAI w.e.f. 22 March 2012 and grim market battle for supremacy, Idea's strong revenue performance of last two quarters has slowed down on sequential quarterly basis to only 2.5% revenue growth. This is primarily due to slide in average realisation per minute (ARPM) by 2.3% to 41.20 paise in comparison to 42.20 paise in Q4 March 2012, suggesting the industry growth is likely to be muted in the first half of this financial year. The company added that the long term business outlook for the company remains positive, with growing consumer affinity for brand Idea, now serving 117 million subscribers. The minutes' growth is stable at 5.3% generating 131 billion minutes compared to 124 billion minutes in Q4 March 2012, strengthening Idea's minutes' market share. This volume expansion was supported by 3.1 million visitor location register (VLR) subscriber additions during the quarter. Idea said it is confident to overcome the current uncertain regulatory phase, emerge stronger, consolidate its position in the telecom voice market and participate aggressively in the evolving wireless broadband business. Idea said it continues to extend its mobile number portability (MNP) leadership with cumulative net gain of 3.5 million customers (as on 10 July 2012) from other operators. The company remains committed to grow share of non-voice revenue which now contributes to 14.5% of total service revenue, it said. Reliance Communications (RCom) lost 2.91% to Rs 60.05, with the stock extending Monday's 2.98% losses as company has deferred the initial public offering of a unit that holds its undersea-cable assets. The stock hit a record low of Rs 59.40 in intraday trade today. The company has said it would list the unit at a later date when there were more "supportive market conditions and easing of prevailing global uncertainties." The company didn't elaborate on a time frame for a subsequent IPO. The Empowered Group of Ministers (EGoM) on telecom headed by Home Minister P Chidambaram on Friday, 20 July 2012, decided to recommend a reduction in the reserve price for the 2G spectrum auction suggested by sector regulator Trai. Media reports suggest that the ministerial pan has recommended a price of Rs 14000-16000 crore for five MHz of pan-India spectrum. That amounts to a reduction of more than 20 per cent from the base price of Rs 18110 crore suggested by the Trai. It means the base price for one MHz will be Rs 2800-3200 crore, instead of the Trai recommended Rs 3622 crore. A final decision on the price will be taken by the Union Cabinet. The EGoM has also favoured the Trai recommendation of permitting deferred payment by operators for the spectrum. However, no decision was taken on the one-time fee that DoT had proposed to levy on existing telecom operators by making changes in their licence conditions. Shares of organised retailers fell for the second straight day on reports leaders from Samajwadi Party and leftist parties have opposed to foreign direct investment (FDI) into multi-brand retail outlets. Pantaloon Retail India, Shoppers Stop and Trent shed by between 0.62% to 1.15%. Metal stocks were mixed after China's flash factory purchasing managers index rose in July to its highest level since February, boosted by a pick up in output and signs of improvement in new export orders. China is the World's largest consumer of copper and aluminum. Sterlite Industries, Hindustan Zinc and Hindalco Industries rose by between 0.69% to 2.56%. JSW Steel, Tata Steel, and Bhushan Steel shed by between 0.07% to 1.03%. Steel Authority of India (Sail) slipped 2.47%, with the stock extending Monday's 2.46% losses. The cabinet committee on economic affairs on Thursday, 19 July 2012, approved disinvestment 10.82% government stake in the state-run steel firm. The cabinet committee on economic affairs (CCEA) on Thursday, 19 July 2012, approved the disinvestment of 10.82% equity of Sail out of Government of India's shareholding of 85.82% through an offer of sale of shares through stock exchanges. After this disinvestment Government of India's shareholding in the company would come down to 75%. Sesa Goa gained 1.36% ahead of its Q1 results today, 24 July 2012 Jindal Steel & Power (JSPL) rose 0.12% ahead of its Q1 results today, 24 July 2012. JSPL has entered into a binding agreement to acquire Canadian miner CIC Energy, CIC said in a statement Tuesday. Jindal has made an offer of C$2 a share to acquire all outstanding shares of CIC, valuing the Canadian company at C$116 million. The offer represents a premium of 65% to the volume-weighted average trading price for CIC Energy's shares on the Toronto Stock Exchange for the 30-trading day period. CIC Energy said it has recommended the deal to its shareholders. It will call a meeting of shareholders by Aug. 28 to seek approval for the acquisition. CIC Energy is developing the Mmamabula Energy Complex at the Mmamabula coal field in Botswana, Africa. UltraTech Cement rose 1.18% to Rs 1614.25 after company said that it has signed an agreement with the shareholders of Gotan Lime Stone Khanij Udyog (GKUPL), Rajasthan to acquire 100% equity shares of GKUPL. With this acquisition, GKUPL has become a wholly owned subsidiary of the Company. Shares of UltraTech Cement hit a record high of Rs 1,624 in intraday trade today. UltraTech announced after market hours on Friday its net profit rose 13.9% to Rs 778.39 crore on 16.6% growth in net sales to Rs 5074.76 crore in Q1 June 2012 over Q1 June 2011. The combined domestic cement and clinker sales rose 4.85% to 9.94 million tonnes (MnT), while that for white cement and wall care putty rose 16.58% to 2.25 lakh metric tonnes (LmT). The variable cost rose by 10% as compared to Q1 June 2011. This was mainly on account of higher energy and raw material prices which are linked to the last increase in railway freight and increase in diesel prices. Although imported coal prices softened by around 19%, the depreciation in rupee by 21% offset the benefit. UltraTech Cement said the board has further sanctioned capital expenditure (capex) of Rs 1000 crore towards modernization and setting up of ready mix concrete plants across the country. This brings the total capex under implementation to around Rs 12000 crore. With regard to future business outlook, the company said the cement demand is likely to grow over 8% on the back of government's focus on infrastructure development. The surplus cement scenario is expected to continue over the next three years. Any rise in input costs will impact margins, it added. UltraTech Cement's good Q1 results sparked a rally in other cement stocks. India Cements, Jaiprakash Associates, ACC, and Ambuja Cements rose by between 0.34% to 2.92%. Cairn India rose 0.87% after company announced after market hours on Monday its consolidated net profit rose 40.31% to Rs 3825.74 crore on 43.36% growth in total income to Rs 5402.75 crore in Q1 June 2012 over Q1 June 2011. Tata Power Company declined 0.46% as the stock turned ex-dividend today, 24 July 2012, for dividend of Rs 1.25 per share for the year ended 31 March 2012 (FY 2012). Shree Ashtavinayak Cine Vision clocked highest volume of 1.67 crore shares on BSE. HDIL (55.75 lakh shares), Edelweiss Financial Services (36.12 lakh shares), Cals Refineries (33.80 lakh shares) and Suzlon Energy (28.65 lakh shares) were the other volume toppers in that order. HUL clocked highest turnover of Rs 108.89 crore on BSE. SBI (Rs 88.33 crore), HDFC (Rs 75.29 crore), Wockhardt (Rs 49.42 crore) and Chola Investment & Finance Company (Rs 49.10 crore) were the other turnover toppers in that order. On the political front, Sharad Pawar-led Nationalist Congress Party (NCP) on Monday deferred its decision on whether to withdraw from the Manmohan Singh government by a couple of days. Union Heavy Industries minister and NCP leader Praful Patel said NCP will remain an integral part of UPA until 2014. He also stressed that NCP was not a post-poll partner, but a core constituent of the UPA. Inflation is way above the desired threshold level of Reserve Bank of India, central bank governor D Subbarao said last week. The RBI's threshold level for inflation is around 5%, he said. However, the governor did issue a disclaimer that his statements did not imply RBI's decision in its July 31 policy. India's potential growth rate may have fallen to around 7.5% as the uncertainty surrounding economic activity has increased after the financial crisis of 2008-09, Subbarao said in a speech last week The Reserve Bank of India (RBI) announces first quarter review of the Monetary Policy 2012-13 on 31 July 2012. The RBI unexpectedly left its key lending rate unchanged at its last meeting in June 2012, citing inflationary concerns. Sowing of major kharif crops has picked in the last few days. According to data released by the Ministry of Agriculture, rice was sown in 144.59 lakh hectares (lh) till Friday, 20 July 2012, sharply higher than 96.79 lh a week back. It, however, remains lower than 153.37 lh of normal area for this time of the year and 161.27 lh during the corresponding period last year. Cumulative sowing of coarse cereals totaled 95.43 lh as on 20 July 2012, sharply higher than 39.76 lh a week back. It, however, remains lower than 126.20 lh of normal area for this time of the year Sowing of pulses totaled 40.19 lh as on 20 July 2012, sharply higher than 20.54 lh a week back. It, however, remains lower than 51.77 lh of normal area for this time of the year. Sowing of oilseeds totaled 108.84 lh as on 20 July 2012, sharply higher than 67.7 lh a week back. It, however, remains lower than 109.59 lh of normal area for this time of the year. Sowing of cotton totaled 83.74 lh as on 20 July 2012, compared with 65.22 lh as on 13 July 2012. It, however, remains lower than 90.03 lh of normal area for this time of the year. Sowing of jute and mesta totaled 8.27 lh as on 20 July 2012, exceeding 8.57 lh during the corresponding period last year. India Meteorological Department (IMD) on 20 July 2012 said seasonal rainfall during this year's monsoon was 22% below the long period average (LPA) till 18 July 2012. Out of 36 meteorological subdivisions, the rainfall was excess/normal over 11, deficient in 22 and scanty in 3 sub-divisions (Punjab, Haryana, Chandigarh & Delhi and Saurashtra & Kutch). In area-wise distribution, 24% area of the country received excess/normal rainfall. The monsoon rains--which make up around 70% of India's annual rainfall--are crucial to the nation's agriculture sector and broader economy. More than 60% of the country's farmland is rain-fed. The timing, distribution and quantity of rainfall are all important for crops. The four-month southwest monsoon season that starts from June accounts for almost 70% of total annual moisture that Indian soil receives in a year. The central government has prepared extensive plans to deal with the deficiency in the monsoon/rainfall in some parts of the country, the Prime Minister's Office (PMO) said on Monday, 23 July 2012. There has been reduction of around eight million hectares in the crop area sown compared to last year. While the reduction in area sown in case of rice could be covered over time, area reduction in coarse cereals is likely to persist, the statement added. While the prices of wheat and rice are stable, the prices of sugar, pulses and vegetable are showing an upward trend, the government said. A proposal for increase in subsidy for supply of pulses through Public Distribution System to BPL families is being brought before Cabinet Committee on Economic Affairs by the Ministry of Consumer Affairs, Food and Public Distribution, it said. The government will increase the availability of electricity and diesel to the grain-bowl northern region to help farmers draw ground water so that the yield of rice isn't affected, it added. It also said there is a proposal to increase the subsidy for the supply of pulses through the government's welfare program to poor families. The IMD last month predicted that rainfall this monsoon would likely be 96% of the 50-year average, with an error margin of 4%. The Prime Minister's Office said actual rainfall could be at the lower end of that range, which means around 92% of the 50-year average. An India-Mauritius joint panel will discuss a series of proposals to review the double taxation avoidance treaty between the two nations on 22-24 August in Mauritius. India has been looking to negotiate the double taxation avoidance agreement with Mauritius for the past few years to check so-called round tripping and other potential abuses. Round tripping entails moving money out of one country to another, and getting it back under the garb of foreign capital. Capital gains tax is close to zero in Mauritius and almost 40% of investments into India come through the island nation. Under the bilateral agreement, capital gains from sale of securities can be taxed only in Mauritius. The India-Mauritius joint working group will also discuss the inclusion of a so-called limitation of benefit clause, similar to the Singapore tax treaty with India, to ensure only genuine Mauritius-based companies are benefited. India's tax agreement with Singapore says that only those companies that spend a minimum of $200,000 (about Rs 1 crore) in Singapore can avail the benefits of the treaty. Sanctity of tax residency certificates issued by a country to companies operating in its jurisdiction to enable the firms to claim tax benefits under various treaties is another issue between India and Mauritius. While India in this year's national budget said the certificates are a necessary but not sufficient condition, Mauritius wants those issued by it honoured. Draft guidelines issued by Indian government for implementing the controversial anti-avoidance tax proposal viz. the GAAR state that GAAR provisions should be invoked on a foreign institutional investor (FII), if it chooses to take a treaty benefit, but would not in any case be invoked in the case of the non-resident investors of the FII. The draft guidelines suggested that the onus of proving wrongdoing should be on the authorities. Prime Minister Dr. Manmohan Singh said in a newspaper interview this month that he has identified controlling the fiscal deficit, achieving clarity on tax matters, reviving the mutual funds and insurance industries, clearing a backlog of foreign investment proposals and boosting infrastructure as his focus areas in the short term. Singh said there will be no arbitrariness in tax matters. The statement assumes significance in the context of a raging controversy over the Income Tax amendment to re-open tax demands with retrospective effect from companies like Vodafone over acquisition of companies having operations in India but registered abroad to avoid taxes. Singh last month said he is chalking out plan for the country's economic revival. Singh last month took additional charge at the finance ministry after Pranab Mukherjee resigned as finance minister on 26 June 2012 to contest the presidential polls. The monsoon session of the parliament will begin on 8 August 2012 and the session will conclude on 7 September 2012, Parliamentary Affairs Minister Pawan Kumar Bansal said on Wednesday, 18 July 2012. The government hasn't yet finalized the agenda for the session, but the expectation is that Prime Minister Dr. Manmohan Singh -- who took charge of the finance ministry after Mr. Pranab Mukherjee resigned to contest the presidential elections -- will try and push through long-pending legislations. These could include the Direct Tax Code and the insurance, pension and banking bills. The government would also place before lawmakers the first demand for additional spending for this fiscal year which began April 1. Corporate affairs minister Veerappa Moily said in a newspaper interview published on 11 July 2012 that the government is hopeful of the passage of the pension bill in the monsoon session of parliament. Investors' focus is currently on Q1 June 2012 earnings. Power Grid Corporation of India unveils Q1 results tomorrow, 25 July 2012. HCL Technologies announces Q4 June 2012 results on the same day. ITC, Bhel and Sterlite Industries (India) unveil Q1 results on 26 July 2012. Cement majors ACC and Ambuja Cements unveil Q2 June 2012 results on the same day. ICICI Bank, Grasim Industries, NTPC and Punjab National Bank unveil Q1 results on 27 July 2012. Maruti Suzuki India announces Q1 results on 28 July 2012. HDFC announces its consolidated Q1 June 2012 results on the same day. HDFC has already announced its standalone results. Bank of Baroda and GAIL (India) unveil Q1 results on 30 July 2012. Jaiprakash Associates and Cipla unveil Q1 results on 31 July 2012. Steel Authority of India announces Q1 results on 6 August 2012. Mahindra & Mahindra announces Q1 results on 8 August 2012. Ranbaxy Laboratories announces Q2 June 2012 results on 9 August 2012. Siemens unveils Q3 June 2012 results on 10 August 2012. BPCL announces Q1 results on the same day. ONGC announces Q1 results on 11 August 2012. Hindalco Industries and IDFC will unveil Q1 results on 14 August 2012. European market edged lower on Tuesday, 24 July 2012, as concerns about Spain's borrowing costs weighed on investor sentiment. Key benchmark indices in France, Germany and UK dropped by between 0.04% to 0.18%.. The purchasing managers index for the euro zone stayed unchanged in July, signaling a sixth straight month of contracting private-sector activity across the region. Germany, the Netherlands and Luxembourg had the outlooks for their AAA credit ratings lowered to negative by Moody's Investors Service, which cited rising uncertainty about Europe's debt crisis. Risks that Greece may leave the 17-nation euro currency and increasing likelihood of collective support for European countries such as Spain and Italy were among reasons for the change, Moody's said yesterday in a statement. "Given the greater ability to absorb the costs associated with this support, this burden will likely fall most heavily on more highly rated member states if the euro area is to be preserved in its current form," Moody's said. Germany's Federal Constitutional Court will announce a decision on lawsuits challenging the country's participation in the permanent euro-zone rescue fund, the European Stability Mechanism, and the fiscal pact on 12 September 2012. The court held a public hearing earlier this month to examine complaints that participation in the fund and the fiscal pact violated German law by taking some authority over the national budget away from parliament. Spain's struggle to avoid a full-fledged international bailout will be on display later on Tuesday when the government sells short-term debt amid widespread investor reluctance to hold peripheral euro zone paper. The International Monetary Fund may reportedly cutoff aid to Greece. A visit by the inspectors from the European Commission, the International Monetary Fund and the European Central Bank -- is set to start on Tuesday, 24 July 2012 -- to determine the fiscal position of Greece, which has been struggling to hold to obligations tied to 240 billion euros ($291 billion) of rescue funds over the past two years. Asian stock markets moved off their lows of the session on Tuesday after data show Chinese manufacturing activity recovered slightly in July, though European debt worries keep the most indexes in negative territory. Key benchmark indices in South Korea and Singapore rose by between 0.25% to 0.53%. Key benchmark indices in Japan, Hong Kong, Indonesia and Taiwan fell by between 0.24% to 0.44%. China's Shanghai Composite index rose 0.24%. A preliminary July survey of Chinese manufacturing conditions released Tuesday by HSBC showed overall activity at its strongest level in five months. Trading in US index futures indicated that the Dow could fall 20 points at the opening bell on Tuesday, 24 July 2012. US stocks dropped on Monday on the prospect that Spain, Europe's fourth largest economy, might need a sovereign bailout, including aid for some of its regional governments. Some prominent US firms announce earnings this week. Apple releases its much-anticipated fiscal third-quarter results after trading hours in the US on Tuesday, 24 July 2012. Boeing Co., Caterpillar Inc., Ford Motor and PepsiCo Inc. present their second-quarter results on Wednesday, 25 July 2012. Facebook Inc., which has been under scrutiny over its ability to grow its subscriber base, will report its first results as a public company on Thursday, 26 July 2012. Key US economic data due this week include new home sales on Wednesday, 25 July 2012. Data on weekly jobless claims, durable-goods orders, and pending-home sales data is due on Thursday, 26 July 2012. Data on US GDP growth figure for the second quarter is due on Friday, 27 July 2012. The Federal Open Market Committee holds a two-day policy meeting on US interest rates on 31 July and 1 August 2012.