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Indian stock market and companies daily report (April 03, 2013, Wednesday)
The Indian market is expected to open in the red today mirroring the negative opening trades in the SGX nifty and most of the Asian bourses.
The US markets continued to perform well throughout the trading session on Tuesday and ended on a positive note. Positive sentiment on the Wall Street was generated by the release of a Commerce Department report showing a notable rebound in factory orders in the month of February. Traders also kept an eye on developments in Europe, where Cyprus was reportedly given an additional two years to meet the conditions of its bailout agreement. Most of the European bourses rallied higher on Tuesday, after returning from their four day Easter holiday weekend. Economic data from Europe and the U.S. contributed to the positive mood.
Meanwhile, Indian markets rose sharply on Tuesday, extending recent gains after the RBI rationalized investment limits for foreign investors in bonds in a bid to attract more foreign flows to plug the widening current account deficit. Investor sentiments were also improved after Finance Minister asserted that the government remains committed to reforms.
The trend deciding level for the day is 18,976 / 5,730 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 19,125 - 19,210 / 5,773 - 5,797 levels. However, if NIFTY trades below 18,976 / 5,730 levels for the first half-an-hour of trade then it may correct up to 18,891 - 18,742 / 5,705 - 5,663 levels.
Auto sales numbers - March 2013 Ashok Leyland
Ashok Leyland (AL) reported in-line volumes (up 39.6% mom) in March 2013 with Dost volumes registering a strong mom growth of 44.1%. The medium and heavy commercial vehicle (MHCV) sales too posted a strong growth of 37.6% mom probably on account of higher dispatches to the dealers. The total volumes however, registered a decline of 1.9% yoy led by weakness in the CV segment, which declined by 19.7% yoy. Exports too recorded a decline of 47.1% yoy during the month.
Bajaj Auto (BJAUT) registered extremely weak volumes in March 2013 led by sluggish performance across the product segments. Total volumes registered a steep decline of 10.2% yoy (9.4% mom) to 301,231 units as domestic volumes posted a sharp decline of 12.3% yoy. While motorcycle sales declined by 11.2% yoy (8.3% mom), three-wheeler sales reported a decline of 1.4% yoy (16.8% mom). Export volumes too registered a decline of 5.9% yoy (25% mom) primarily on account of ~20,000 units in the transit which would be reflected in the month of April.
Maruti Suzuki (MSIL) reported in-line volumes primarily driven by growth in the Super Compact (up 22% yoy and 9.6% mom) and Utility Vehicle (up 8.9% mom) segments led by Dzire and Ertiga respectively. Total volumes for the month registered a decline of 4.8% yoy to 119,937 units largely due to the slowdown in the demand for entry levels cars and vans. As a result, the Mini and Vans segments witnessed a steep decline of 14.7% yoy and 23.6% yoy respectively. Export volumes too registered a decline of 8.9% yoy as demand in key export markets continues to remain weak. However, on a sequential basis, the total volumes posted a strong 9.5% growth driven by strong performance across all the segments.
L&T Construction bagged Rs.3,700cr orders in March
Larsen & Toubro said its building & factories business has bagged new orders worth Rs.1,986cr for the construction of residential towers and commercial development across India. In the Power T&D segment it has secured new orders worth Rs.1,097cr which includes a major order from Punjab State Power Corporation for the execution of R-APDRP (Part B) Project on turnkey basis at Amritsar, Jalandhar and Ludhiana city. The companyRs.s solar business has won new EPC orders worth Rs.373cr for the construction of Solar PV Plants in Rajasthan and Tuticorin, Tamil Nadu. Also the company has secured additional order worth Rs.244cr from various ongoing jobs in the Infrastructure and Metallurgical & Material Handling Business. We continue to maintain our Buy rating on the stock with a target price of Rs.1,795.
Supreme Court refuses closure for SterliteRs.s copper plant; fines Rs.100cr.
The Supreme Court has quashed the September 2010 High Court Order which had asked Sterlite Industries (Sterlite) to shut its Tuticorin smelter due to not meeting environmental norms. The Supreme Court has allowed the plant to remain operational although it has fined Rs.100cr to Sterlite for violating pollution control norms. However, the judgment will have no bearing on Tamil Nadu Pollution Control BoardRs.s (TNPCB) order dated March 30, 2013, to shut down the copper plant in the wake of alleged gas leak from it, as the Supreme CourtRs.s verdict is confined to the High CourtRs.s 2010 order. Hence, lack of clarity on the duration of closure of the smelter still remains. As per Sterlite, it had provided the technical details to TNPCB which revealed there were no violations. We await further clarity on the matter. Meanwhile, we recommend Accumulate rating on the stock with a target price of Rs.98.
Mukesh Ambani's 4G arm Reliance Jio inks Rs.1,200cr pact with Anil Ambani's RCom
Mukesh Ambani's Reliance Jio, which will offer 4G services, has signed an agreement with Reliance Communications (RCom), controlled by his younger brother Anil Ambani, to use the latterRs.s fibre-optic network for a one-time payment of Rs.1,200cr. The deal is non-exclusive. This implies, RCom is free to offer fibre optics to other firms, too, while Reliance Jio can avail of other firmsRs. infra.
Though the size of the agreement is small, it carries a symbolic significance because, RCom says, the deal is the first in a series of agreements between the two groups, raising expectations of further action in the near future. According to the agreement, Reliance Jio Infocomm will utilise multiple fibre pairs across RComRs.s 120,000 km of inter-city fibre-optic network. This means Reliance Jio will pay around Rs. 1lakh for every km of the network, which is close to a tenth of the cost it would have had to bear to put up its own fibre. The amount will be paid to RCom as soon as it readies the network for RILRs.s use.
According to the company's announcement, more telecom infrastructure-sharing deals are in the works. This may largely involve RILRs.s 4G services riding on telecom towers owned by RCom. This deal increases the possibility of a consolidation of RComRs.s telecom tower infrastructure business, which is currently debt laden. RCom has been looking out for strategic investors for the business to reduce the borrowings and such an arrangement would be the next big trigger for RComRs.s stock. We continue to remain Neutral on the stock with the trigger being RCom signing a pact for its tower infrastructure business and the current deal extending to sharing the telecom infrastructure including towers.
NALCO reported FY2013 production numbers
NALCO reported its FY2013 bauxite production numbers. The bauxite production grew by 8.0% yoy to 5.4mn tonnes. This was inline our estimate of 5.9mn tonnes. Hence we maintain our Neutral rating on the stock.
MOIL raises manganese ore prices by 9% for April-June quarter
MOIL has raised the manganese ore prices for all the grades by 9% for the April to June quarter. MOIL follows a policy of quarterly price revisions based demand supply dynamics. We maintain our Accumulate rating on the stock with a target price of Rs.243.
HC refuses relief to Mallya, banks free to sell shares
The Bombay High Court on Tuesday refused to stop lenders to Kingfisher Airlines from selling the pledged shares for recovering their dues. UBI Holdings (promoters of United Spirits) had pledged its stake in United Spirits Ltd (USL) and Mangalore Chemicals with the lenders as security against loans to the airline. The lenders, led by the State Bank of India, sold 730,000 shares of USL over the past two weeks. The average sell price of USL shares for transactions on April 2nd was Rs 1,856 per share. The core committee of the lenders had set a floor price of Rs 1,850. The lenders also sold all the pledged stock of Mangalore Chemicals. Pleading for relief, UB Holdings had sought three weeks stay on sale of pledged shares by the Kingfisher AirlineRs.s lenders and claimed that continuous sale would push USL share prices down, thereby harming investor interests. UBI holdings also offered to arrange for buyer for these shares. However, the court has refused to restrain the lenders from selling the shares of USL which is a negative for the stock. We maintain our neutral view on United Spirits
Economic and Political News
- Foreign trade policy to be announced by month-end
- Govt. unlikely to hike gold duty again: Chidambaram
- Govt. inks Rs.1,367cr loan pact with ADB for road development
- Credit quality pressures likely to ease for corporates: Crisil
- Honda to invest Rs.2500cr in India by next year
- Kingfisher pays June-July salary to employees
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