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Indian stock market and companies daily report (November 27, 2009, Friday)

Contributed by Angel Broking

By Angel Broking

Intraday volatility was high as traders rolled over positions in the derivative segment from November 2009 series to December 2009 series ahead of the expiry of the near-month November 2009 contracts.The market weakened in early afternoon trade as Asian stocks fell. The market cut losses after an initial slide. However, the intraday recovery proved short-lived. Weakness in European markets following a setback in Chinese stocks triggered a sell-off on the domestic bourses in late trade. The Sensex and the Nifty were down by 2% each. However, the BSE Mid-Cap and Small-Cap Indices lost by 1.4% and 1% respectively. Among the front liners, HUL, Sun Pharma, ACC and Hero Honda gained between 0.6-0.8%, while ICICI Bank, Tata Steel, M&M, SBI and RIL lost between 3-4%. In the Midcap segment, S Kumars, Shaw Wallace, Redington, HT Media and PVP Vent Ltd. gained between 3-7%, while Hindustan Oil, Dena Bank, Sintex Industries, Vijaya Bank and Mcleod Russel lost between 5-7%.

Markets Today

The trend deciding level for the day is 5036 / 16955. NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 5086 / 17102. However, if NIFTY trades below 5036 / 16955 for the first half-an-hour of trade then it may correct up to 4956 – 4906 / 16708 - 16562.

ONGC eyes 20-25% stake in Iranian gas field

ONGC is eyeing a 20-25% stake in a giant Iranian gas field, even as it awaits Tehran’s nod for its plan to develop a gas field it had discovered two years ago. ONGC Videsh (OVL), the overseas arm of ONGC, will discuss participation in the development of Phase-12 of the gigantic South Pars gas field in the Persian Gulf, when top officials of Iranian national oil firm visit the country next week. The Hinduja Group is also interested in the US $7.5bn South Pars Phase-12 (SP-12) project, but OVL’s pursuit is independent of it. OVL has not approached Petropars, the unit of National Iranian Oil Co (NIOC), which holds the rights for the field, for picking a stake through a joint venture with the Hindujas. It is said that both OVL and the Hindujas had in the past signed separate MoUs with Petropars for SP-12 and are independently talking to NIOC. If the Hindujas are able to convince Iran to give them a stake in the field, the state-run company will welcome them in the Consortium formed by Petropars. In its talk with NIOC next week, OVL would also take up the issue of granting development rights for the offshore Farsi gas fields for which it, along with IOC and Oil India, has submitted a US $5bn development plan. It is said that OVL would negotiate getting LNG in return for its efforts in both the projects. We remain Neutral on ONGC.

Ranbaxy launches Valtrex with six months exclusivity

Ranbaxy has launched 500mg and 1gm tablets of the generic version of the block buster drug, Valtrex (Valaciclovir), in the US. Valtrex is an anti-viral drug of GlaxoSmithKline Pharma with annual sales of US $1.6bn in the US. Ranbaxy would enjoy six-month exclusivity as it had FTF status for the generic version of Valtrex. We expect Valtrex to contribute US $200mn to Top-line and US $80mn to Bottom-line of the company during the exclusivity period, which translates into NPV of Rs9 per share. The company has launched the drug from its Ohm facility in the US. The launch of Valtrex with six month exclusivity is positive, as the company has been able to protect its FTF status (unlike Imitrex) given that the Dewas facility is still under the US FDA scanner. The stock is Under Review.

Tata Steel – Consolidated 2QFY2010 Result Review

Tata Steel’s consolidated Sales increased 9%qoq (down 42.5% yoy) to Rs25,395cr for 2QFY2010. Sales volume increased 14% qoq to 6.2mn tonnes. The company recorded a positive EBITDA of Rs371cr compared to a loss of Rs30cr in 1QFY2010. This included a one-time loss of US $170mn on account of Teeside restructuring. Net Loss for the quarter was Rs2,707cr (which included restructuring charges of Rs911cr) as compared to a Loss of Rs2,238cr. We remain Neutral on the stock. Tata Motors – Consolidated 2QFY2010 Result Preview Tata Motors is expected to declare its consolidated 2QFY2010 Results today. We estimate the company to record Net Sales of Rs17,745cr, up 116.3% yoy. The 2QFY2010 consolidated financial performance of the company is not comparable to 2QFY2009 on account of the acquisition of Jaguar Land Rover (JLR) in June 2008. For 2QFY2010, the company is estimated to report Net Loss of Rs184cr. On a sequential basis, the company is estimated to register growth of about 8.3% qoq in Top-line. The Net Loss of Rs329cr in 1QFY2010 is expected to reduce sequentially in 2QFY2010 to Rs184cr. The stock is Under Review.

Economic and Political News

- Food inflation rises to 15.58%
- Broadcasters ask govt to clear all DAVP dues
- Companies raise US $2bn via FCCBs in October

Corporate News
- IOCL invests Rs 2,200 cr in Paradeep refinery
- 3i Infotech BPO appoints Parag Patankar as CEO
- TCS ties up with US-based 3Com to build the Andhra Wide Area Network project