After a bout of correction, Indian equity markets seem to have changed track again, upwards. The National Stock Exchange’s Nifty 50 closed Monday at 4,898 bouncing back after a brief but strong correction to about 4,600 levels.
The road ahead
The Indian market has been rising on the back of the weakening dollar, feels Jitendra Sriram, VP & Fund Manager – Equities at HSBC. “The markets will remain volatile ahead because the amount of cues that’s are coming in from global sources whether be the euro zone or US remains mixed,” he said.
The market looked a little expensive at Nifty 5,000 levels, Sriram said. “To our mind, either there is a time value where corporate earnings catch up or there is a pullback in the index, which will tempt investors to come back and buy into the market.”
“A lot of people are still convinced that market is just not yet a buy on rallies or aggressively buy on dips,” said Sajiv Dhawan of JV Capital Services. “There are a lot of people looking to short and they are expecting the markets to fall further in month of November-December.”
“Personally speaking we are on the long side as we do follow strict levels, there is no reason as of now to short, I think that time is obviously gone but sentiment remains skittish,” he added.
Dhawan’s advice is to keep buying but with strict stop-losses.
View on stocks/sectors
Banks: “It’s an investment call; you buy the dips,” Dhawan said. “The stocks corrected maybe 10-15% plus from their highs. The negative news in the form of higher interest rates ahead if factored in into the prices to an extent. It’s still full of potential of mergers and acquisitions, you have seen ministers discuss their state banks saying they would like bring their down holding into that stock. You have seen private sector banks like ICICI Bank, HDFC Bank having several ‘buy’ recommendations,” he added. “Across the board whether it’s a PSU, private banks for us it’s an investment call and you buy on any sharp decline.”
Aviation: “From a near-term perspective there are various triggers,” said Sriram. “One is you are entering the busy season in terms of tourist arrivals, generally the monsoon quarter tends to be little weak and you are entering a phase where load factors will go up,” he said, adding that air tariffs were also showing some kind of strength. “These are the two factors, which are driving up space.”
Sugar: Sriram said he was positive on the sector, adding that the fair and remunerative price (FRP) the nation introduced recently was a plus for the long term. “It brings down the impact of the vagaries of local state level regulations on the space.”
Maruti Suzuki has come out with its second quarter FY10 results. Its net profit shot up 99.3% to Rs 570 crore versus Rs 286 crore, on year-on-year basis (YoY).
The company's net sales increased 45.94% to Rs 7,049 crore as against Rs 4,830 crore (YoY).
The topline as well as the bottomline numbers were below expectations. CNBC-TV18 was expecting net profit at Rs 597 crore and net sales at Rs 7,091 crore.
Raw material cost went up 46.9% to Rs 5,255 crore versus Rs 3,578 crore (YoY).
In a press conference, Maruti said buoyant exports helped strong growth in second quarter. However, the company said they would be cautiously optimistic on volumes in near future and margins will be seen under pressure going forward. "High commodity prices and strong Yen will tighten margins."
The company's Q2 domestic passenger car market share stood at 54.9%, it added.
Maruti Says
-Development of new models on track
-Concerned that input costs could go up
-Target 1.3 lakh units exports in FY10
-Remain watchful of interest rates, inflation
-Domestic demand broadly good
-See good market potential for CNG vehicles
-Expect higher steel prices in October-March
-FY10 capex seen at Rs 2,100 crore
-FY11 capex seen around Rs 2,000 cr
-Company has cash reserves of Rs 5,300 cr
-Not sure strong demand to continue after October
The government on Wednesday said the disinvestment process in steel giant SAIL will start in the current fiscal.
"The first phase of disinvestment will happen in the current fiscal," Steel Minister Virbhadra Singh said in New Delhi after a conference wherein trading firm MSTC presented a dividend of Rs 15.31 crore to the minister.
Singh has already approved a proposal for 20 per cent two-phase Follow-on-Public Offer (FPO) of SAIL. The next phase is likely the next fiscal, the minister said.
Giving details of divestment plans, Steel Secretary P K Rastogi said that the FPO will be a combination of five per cent dilution of government's equity and five per cent issue of additional shares by the company.
The government will mobilise around Rs 8,000 crore through the FPO at current share prices The amount may vary depending on the share price of SAIL, he added. Rastogi further said the proposal has got in-principle approval from the Disinvestment Department of the Finance Ministry and SAIL's board is now finalising the proposal.
SAIL would be informing market regulator SEBI about the planned FPO. Once the regulator approval is obtained, the ministry will prepare a note to be sent to the Cabinet for its approval, which is likely by December.
SAIL, which will also raise about Rs 8,000 crore through two-pahse FPO, will use fund part finance its Rs 70,000-crore expansion projects.
KOCHI: Brokerage firm Geojit BNP Paribas Financial Services has clocked a net profit of Rs 13.06 crore in the second quarter of this fiscal, registering a 150 per cent growth over Rs 5.22 crore in the same period last year.
The Geojit Managing Director, Mr C.K. George, attributed the positive results to favourable market conditions and renewed investor confidence that have led to the growth of the company.
Revenue in the same period stood at Rs 80.95 crore, witnessing a growth of 60 per cent over Rs 50.61 crore in the corresponding period last year, he said.
The company’s profit before tax rose 110 per cent to Rs 22.11 crore from Rs 10.54 crore in the same period last year.
For the six months ended September, the company’s consolidated income rose 61 per cent to Rs 157.63 crore from Rs 97.96 crore during the same period last year.
Its consolidated profit before tax went up by 107 per cent to Rs 43.28 crore from Rs 20.88 crore, while consolidated net profit rose 113 per cent to Rs 26.31 crore from Rs 12.33 crore.
The company has added about 68,000 clients over the past year and is confident that these numbers will grow in this financial year, he added.
Geojit has opened new branches in North India, Gujarat, West Bengal and Orissa to reach out to local investors, he said. — PTI
The earnings season officially kicked off in US, with aluminium giant, Alcoa reporting after the bell. The Dow component bettered street expectations on both earnings and revenue. The company reported profit of 4 cents a share in the third quarter, excluding one-time items; analysts were expecting a loss.
Alcoa’s sales reached USD 4.62 billion, ahead of analysts' USD 4.55 billion dollar forecast. Its stock jumped more than 5% in after hours trading.
Top tier IT companies are expected to post better sequential growth in revenue in the September 2009 quarter compared with the previous quarter. The expectation of an improved performance rides on the possibility of moderate growth in business volumes and stable pricing. Analysts are also expecting companies to provide guidance on a better outlook for the third quarter and for FY10, following higher deal closures and receding pressure on billing rates. Here are the expected results of the top four IT companies:
Sales: 7355.1 cr
QoQ Change: 2.1%
YoY Change: 5.8%
PAT: 1524.2 cr
QoQ Change: 0.3%
YoY Change: 20.8%
Infosys
Sales: 5593.2 cr
QoQ Change: 2.2%
YoY Change: 3.2%
PAT: 1531.0 cr
QoQ Change: 0.3%
YoY Change: 6.9%
Sales: 6,603.6 cr
QoQ Change: 3.5%
YoY Change: -0.1%
PAT: 1043.7 cr
QoQ Change: 2.8%
YoY Change: 6.7%
HCL Technologies
Sales: 2,987.8 cr
QoQ Change: 2.7%
YoY Change: 26.1%
PAT: 317.8 cr
QoQ Change: 1.0%
YoY Change: 13.1%
Total expected earnings for top 4
Sales: 22,539.7 cr
QoQ Change: 2.6%
YoY Change: 5.6%
PAT: 4,416.8 cr
QoQ Change: 0.9%
YoY Change: 11.7%
Ambani group firm Reliance Industries today reported a consolidated net profit of Rs 15,296 crore for the year ended March 31,
2009.
The company had registered a net profit of Rs 15,324 crore (from ordinary activities) in the FY'08, the company stated in a filing to the Bombay Stock Exchange.
The announcement of audited financial results for 2008-09 came late as the merger of Reliance Petroleum with RIL was awaiting regulatory and court approvals.
The figures include those of Reliance Petroleum Ltd (RPL), which amalgamated with the company with effect from April 1, 2008 and are therefore, not comparable with those of previous year, the company said in the filing.
The net turnover of the company stood at Rs 1,51,224 crore for the year ended March 31, 2009, whereas it was Rs 1,37,147 crore a year-ago.
RIL has also proposed a dividend of Rs 13 per fully paid-up equity shares of Rs 10 each aggregating to Rs 2,219 crore, including the dividend distribution tax, the filing added.
The board has considered dividend on the shares issued to the shareholders erstwhile RPL as well.
The RIL board also approved a bonus issue of one share for each share held in the company, subject to the approval of the shareholders.
The Reliance Industries board on Wednesday approved bonus issue in the ratio 1:1. The issue is subject to approval from shareholders. The RIL bonus issue is applicable for RPL shareholders.
RIL had announced a bonus issue in the ratio 1:1 in 1997. Prior to that, the company had announced a bonus issue in the ratio 3:5 in 1980 and 1983.
“The proposal for bonus is as per RIL’s policy of rewarding shareholders,” said Alok Agarwal, CFO of RIL.
He said that the company has been able to ramp up capacity despite significant challenges in costs and availability of rigs.
RIL has started production at 16 of 18 oil wells at KG D6 block and ramp-up of output from the block is on track, he said. And the benefits of KG D6 gas has lead to substantial savings in terms of imports, Agarwal added.
Gas price at $4.2/mmbtu leads to annual savings of Rs 25,000 crore to consumers, he said. He pegged the value of RIL’s treasury stock at Rs.40,000 crore
NEW DELHI: Power equipment maker PCI today said it has filed a draft red herring prospectus with the market regulator SEBI for divesting 26.62
per cent of its stake and raise an unspecified amount through an IPO.
The company plans to offer 50 lakh shares of Rs 10 each for the issue, which will be carried out through a 100 per cent book building process, PCI Ltd said in a statement.
"The issue constitutes 26.62 per cent of the fully diluted post issue paid-up capital of the company," it added.
The exact price band of the shares to be offloaded would be decided later with SPA Merchant Bankers Ltd, who would be acting as book running lead managers.
PCI's major business activities include manufacturing, assembling and marketing of a range of equipment, instruments and systems relating to power, energy, telecom, railways, aviation and other sectors.
Its major clients include state sector firms like BHEL, NTPC and IRSO.
s:ET
Nuclear power is the next new frontier for India's ambitious companies following in the heels of Punj Lloyd and L&T.
The Hindustan Construction Company (HCC) on Wednesday announced its plans to enter into this uncharted sector.
Things seem to have started moving in the nuclear power front.
HCC has entered the nuclear power sector and has tied up with UK based AMEC for the same.
The Indo-US civil nuclear treaty signed last year has opened up a multi-billion dollar opportunity not just for global majors like Westinghouse, Areva and GE, but also for Indian companies like HCC, which is eyeing orders worth Rs 5-6,000 crore per year over a period of next five years.
Ajit Gulabchand, CMD of HCC, said, “The total opportunity is of about Rs 1 lakh- 50,000 crore, out of which Rs 60,000 crore order will be for implementation and HCC is eying about Rs 20-30,000 crore order in five years time.”
Nuclear power is at a nascent stage right now. But with the government ready to invite bids for about 15 nuclear reactors over the next 3-4 months, nuclear power capacity is poised to double to 10,000 megawatts.
Meanwhile, the government is likely invite bids for 15 nuclear reactor projects in next few months. India's present nuclear power capacity is little over 5000 MW.
But its nuclear power capacity will be about 10000 MW by 2012-13 and opportunities for nuclear power players in India is more than Rs 60,000 crore.
But how HCC takes on competition such as L&T-Westinghouse combine or other big firms with its tie-up with UK-based AMEC, a consultancy services expert that has little exposure to project execution?
“It will be a competition and we have our own competence. We will focus more on project execution and not on equipment manufacturing. So the other companies would be competition at some point but the same companies will be our supplier at some point,” said Gulabchand.
Bigger opportunity means bigger competition and it is not just HCC that surely will try and consolidate its position in the nuclear power field. But other players like L&T, Punj Lloyd, BHEL and Bharat Forge will move beyond the framework of the memorandum of understanding.
Over all, it will be India as a country that will be benefiting from the government's nuclear power programme in terms of cheaper and cleaner fuel.
- Grab BhartiARTL in opening bell only, so that u can book huge profit today irrespective of market trend...:)
We recommend a buy in the stock of Atul from a short-term perspective. It is evident from the charts that it took support around Rs 35 in March and began to trend up. Since then, it has been on an intermediate-term uptrend, shaping higher peaks and bottoms. In late August, the stock conclusively broke through a significant resistance level of Rs 70 with good volume. The stock is trading well above its 21- and 50-day moving averages. It gained almost 6 per cent accompanied with high volume on September 30, reinforcing the uptrend. The daily relative strength index (RSI) bounced back into the bullish zone and the weekly RSI is already featuring in this zone. The daily moving average convergence and divergence (MACD) indicator has signalled a buy. Given that the stock’s medium-term uptrend is intact, we are bullish from a short-term perspective. We anticipate its up-move to continue until it hits our price target of Rs 95 in the approaching trading sessions. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 81.
Oil India opened at Rs 1,019 on the BSE as against the issue price of Rs 1,050. The company had come out with an initial public offering (IPO) of 26.45 million equity shares of face value Rs 10 each and raised around $570 million at an issue price of Rs 1,050 per share.
The IPO was subscribed 31 times with the QIB portion being subscribed 54 times, HNI 10 times and retail 1.8 times.
The scrip ended up 8.5% at Rs 1,140 from its issue price of Rs 1,050.
The counter witnessed trades of 8.3 million shares on the BSE today.
The much-anticipated deal between India's Bharti and South Africa's MTN that aimed to merge the two telecom giant has failed yet again. The contentious issue of dual listing proved to be the deal breaker.
MTN has said that it would send out a statement later on. The company has requested the SA exchanges to suspend trading till tomorrow.Consequently, the company’s share trading has been suspended.
Bharti, in a statement, said, the company has decided to disengage itself from the deal. “We hope the South African government will review its position in the future and allow both the companies an opportunity to re-engage.” The statement further said that the South African government had expressed its inability to accept it in the current form. Also, it stated, Bharti would continue to explore international expansion opportunity and could also re-look at the deal if the SA government changes position.
The much-anticipated deal between India's Bharti and South Africa's MTN that aimed to merge the two telecom giant has failed yet again. The contentious issue of dual listing proved to be the deal breaker, learns CNBC-TV18. Bharti, in a statement, said, the company has decided to disengage itself from the deal. “We hope the South African government will review its position in the future and allow both the companies an opportunity to re-engage.” The statement further said that the South African government had expressed its inability to accept it in the current form. Also, it stated, Bharti would continue to explore international expansion opportunity and could also re-look at the deal if the SA government changes position.
s: MC, Alliesfin
The market regulator, SEBI (Securities & Exchange Board of India) has okayed Indiabulls Power's IPO (initial public offering). This subsidiary of Indiabulls Realty is expected to raise around Rs 2,000 crore.
The proceeds of the issue will be used to part finance the construction and development of the 1,320 MW Amravati Power Project Phase – I (Rs 775 crore from the issue) and for funding equity contribution in the company’s wholly owned subsidiary, IRL, to part finance the construction and development of the 1,335 MW Nashik Power Project (Rs 660 crore from the issue).
The company has filed its DRHP (draft red herring prospectus) with the SEBI on July 15, 2009. It is coming out with an IPO of 33.98 crore equity shares of Rs 10 each. There will also be a green shoe option of up to 50,900,000 equity shares, which will take the issue size to 39.07 crore shares. Before the green shoe option, the issue will constitute 16.98% of the fully diluted post issue paid-up capital of the company and post the green shoe option - 19.06%.
The Company has five thermal power projects under development, which will have a combined installed capacity of 6,615 MW.
s:MC
Pfizer has declared its numbers for the quarter ended August 2009 (Q3). Its net profit went up 8.3% at Rs 41.15 crore as against Rs 38 crore in the same period of last year.
Kewal Handa said Pfizer grew at a higher rate than the industry.
The industry has grown at about 12.4% whereas Pfizer has grown at about 13.8%. So, we are growing really higher than the industry and both higher than the multinational and Indian companies as far as the IMS data.
We have done 15% growth on a year-to-date (YTD) basis and profits are growing at about 3%. On a quarterly basis, the growth has been 9% with the profit growing at about 8%.
On a YTD basis, we are about Rs 500 crore, and on the basis of quarter, we did about Rs 200 crore this quarter.
EBITDA margins are at around about 24% against the previous quarter of 21%.
I think that has already been released by Pfizer where some vaccines are getting divested. That has no impact as far as India’s operation is concerned.
The parent company is now holding 70.4%.
On Tuesday keep a watch on this stock
Reliance Infrastructure is likely to cross $7 billion-mark over the medium term, as investment in the infrastructure sector emerges key to the sustenance of GDP growth in the country.
According to a report by leading investment bank Goldman Sachs, Reliance Infrastructure currently has about $3 billion of projects under construction or implementation and has high visibility for winning about $4.2 billion worth projects over the medium term.
The bullish trend in the order book position of Reliance Infrastructure is largely in line with the 11th Five Year Plan of the country, which highlights that an investment of $500 billion is needed in the infrastructure sector, primarily in power, roads, railways, water, ports and airports.
The report further said going forward, Reliance Infra is likely to benefit from the opportunities that may arise for the private sector in the infrastructure space, on account of its strong cash position and low gross debt to equity ratio.
Though the company's order book is dominated by the power segment, it is building expertise to undertake projects in sectors such as urban infrastructure, cement, steel and airports.
S:BL
Buy: Syndicate Bank
Buy in Syndicate Bank from a short-term perspective. It is evident from the charts of the stock that after recording a multi-year low of Rs 37.6 in March, the stock has been on an intermediate term uptrend. However, it has been consolidating sideways in the range of Rs 76-84 over the past month. On September 11, the stock gained almost 4 per cent, accompanied with good volume. The stock is trading well above its 21- and 50-day moving averages. Both the daily and weekly relative strength index (RSI) have re-entered the bullish zone from the neutral region. The daily moving average convergence and divergence indicator is signalling a buy. Considering that the intermediate-term up trendline is intact, we are positively biased on this stock from a short-term perspective. We expect the stock to move up further until it hits our price target of Rs 92 in the approaching trading sessions. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 79.
S:BL
The stand-off between the Jet Airways management and its pilots has come to an end, The pilots will return to work with immediate effect.
A new co-ordination committee will be formed for pilots' grievances and both, the pilots and the management will have representatives in the new committee.
Buy this stock with market opening on 14.09.2009
For good returns
Nirmal Jain, Chairman and Managing Director at India Infoline said :
The momentum in the market was likely to take the Nifty past 5,000 soon, adding that he had a target of 5,200 for the Nifty. The undertone will remain distinctly positive.
His views on some stocks:
He was bullish on Patel Engineering, Nagarjuna Construction and IRB infra. He also said that DLF and Unitech were seeing good offtakes and added that the realty companies could see record sales.
On Oil India, Jain said the stock was likely to open at Rs 1,200, adding that Oil India was priced better than NHPC.
More over 5,000 is just about 4% away from the current levels. The sheer momentum of the market will not take it cross 5,000. Once it crosses 5,000, 5,200 is not a difficult target. Few things that have changed in the last few weeks are driving this rally. Of course, global liquidity has been very strong and India is also one of the beneficiaries of that but beside that there has been relatively better news on monsoon. Our research team did a survey in six states and many districts and we found that National Rural Employment Guarantee Scheme (NREGS) money has actually reached the lower stratum of the society and that is cushioning the negative impact of poor monsoon. Also, the food grain stocks are adequate. So the negative impact of monsoon is not as much as people feared earlier. The consumption story continues and that coupled with huge investment flow in infrastructure projects are driving the market up. We are also seeing that companies like Unitech and DLF are seeing very good offtake in fact, the sales that they are talking about in this year probably would be record in terms of the area sold. Of course, they are selling at lower price but the good news is that they are able to sell the housing units in the urban areas like Delhi where they are based. So all in all market looks ripe for a good revival and a rally from here. To summarise, driven by global liquidity on one hand and Indian macro fundamentals are relatively better than the rest of the world.
S: MC
Jet Air, IVRCL, Madhucon Proj, Sobha
stocks that are in news today: Bharti-MTN update-Denies reports of any agreement with MTN-No revised offer has been finalised: Sources((reports said Bharti-MTN reach a $24 billion preliminary agreement, Bharti hikes cash offer to $14 billion)) Oil India IPO closes today, subscribed
-Overall 4 times
-QIB 7.2 times
-Retail 0.31 times
-HNI 0.04 times
NSE revises index changes date:
-IDFC & JP Associates to replace Nalco & Tata Communication in Nifty from October 22 ((versus October 20 earlier))
Mint Exclusive
-Axis AMC, Indiabulls join race for DBS Chola
-Mint Alert: CNBC reported on September 7 L&T Finance bidding for DBS Chola
Other stocks that are in news today:
Saroj Dutta to CNBC-TV18: Jet’s loss of revenue due to strike at around $6 million a day
Madhucon Project plans to merge 3 SPVs into 1, then raise Rs 500-600 crore – DNA
IVRCL plans to consolidate holding in SPV under one roof before unlocking value – DNA
Cement prices down by Rs 3/bag in Mumbai to Rs 255/bag – DNA
Sobha Developers likely to get nod for Rs 5,000 crore township project in Kochi this week – DNA
L&T Finance says open to both starting up or acquiring an AMC
Shasun Chemicals sells plant of subsidiary in Scotland ((plant was closed in March))
Henkel set to sell factory Kolkata factory to VVF – DNA
Disa India revised open offer opens on September 16, closes on October 5
Varun Industries’ Madagascar subsidiary signs production sharing contract for off-shore gas block
3.32 crore Sesa Goa shares to hit market ((preferential allotment))
Ex-dividend: Hindalco @ Rs 1.35
Ex-bonus: Hiran Orgochem @ 4:1
Ex-event: Himachal Fibres ((reduction of capital))
Indian ADRs: Satyam, ICICI Bank up 4%, Infosys up 2%, HDFC bank up 1%
S:MC
