New York: 20:17 || London: 01:17 || Mumbai: 04:47 || Singapore: 07:17

Reports India

Indian stock market and companies daily report (April 03, 2014, Thursday)

April 3, 2014, Thursday, 03:24 GMT | 22:24 EST | 06:54 IST | 09:24 SGT
Contributed by Angel Broking

Indian markets are expected to open in the green tracking positive start to SGX Nifty and most of the Asian indices.

US stocks showed lack of direction throughout the trading day on Wednesday but managed to close modestly higher. The modest strength on Wall Street came following the release of some relatively upbeat economic data, including ADP's report on private sector employment. According to the ADP report, private sector employment increased by 191,000 jobs in March following an upwardly revised increase of 178,000 jobs in February. The Commerce Department also released a separate report showing that factory orders rebounded by more than expected in February (up 1.6% as against expectations of an increase of 1.2%) after showing notable decreases in the previous two months.

Meanwhile, Indian shares saw further upside on Wednesday to close at fresh record highs following upbeat US manufacturing data and Election Commission's nod for issuing new banking licenses. Trading on Thursday is likely to be impacted by release of US economic reports on weekly jobless claims, international trade, and service sector activity. Additionally, traders would keenly await report on the monthly jobs that is scheduled to be released on Friday.

Markets Today

The trend deciding level for the day is 22,539/6,747 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 22,605 - 22,658/6,770 - 6,786 levels. However, if NIFTY trades below 22,539/6,747 levels for the first half-an-hour of trade then it may correct 22,486 - 22,420/6,730 - 6,707 levels.

RBI grants in principle approval for bank license to IDFC and Bandhan Financial services

The reserve bank of India has granted 'in-principle' approval to set up banks to IDFC (Mumbai based Infra lender) and Bandhan Financial Services Private Ltd (Kolkata based microfinance institution). RBI is also to consider Department of Posts as recommended by High Level Advisory Committee (HLAC) in consultation with Government of India. The in-principle approval stands valid for 18 months during which IDFC and Bandhan Financial will have to meet all RBI guidelines to secure a permanent licence and begin banking activities. Total 25 applicants were screened by HLAC chaired by Dr. Bimal Jalan after being scrutinised by RBI for grant of license. Going ahead RBI plans to grant licenses more frequently, that is, virtually "on tap". Also entities which did not qualify for current process could reapply for differentiated licences going forward.

Bajaj Auto registers lower-than-expected sales in March 2014

Bajaj Auto (BJAUT) reported lower-than-expected sales in March 2014, with total sales posting a marginal growth of 1% yoy to 304,330 units. The company's sales underperformed its peers like Hero MotoCorp and TVS Motor Company which reported strong growth of 11.9% and 1 6.2% yoy respectively. The domestic sales of the company disappointed once again, despite the new launches, and witnessed a decline of 6.9% yoy. We believe that weakness in Discover volumes coupled with higher competition in the entry and executive motorcycle segments continue to impact the company's performance. While motorcycle sales of the company grew by 1.3% yoy; three-wheeler sales registered a fall of 1.3% yoy during the month. Export volumes though continued its strong traction witnessing a robust growth of 16.6% yoy driven by continued momentum in Africa. At the current price, the stock is trading at 13.8x FY2016E earnings. We maintain our Buy rating on the stock with a target price of ?2,455.

Ashok Leyland receives orders for vehicles from Government of Zimbabwe

Ashok Leyland has bagged a contract from the Ministry of Tourism & Hospitality Industry, Government of Zimbabwe for supply of 670 vehicles. The order is being valued around US$50mn and is expected to be executed in FY2015. The company's export volumes have remained broadly flat in FY2014 due to weakness in major export markets like Sri Lanka, Bangladesh and Middle East. We expect the exports performance to improve going ahead led by revival in demand in the key markets and also due to entering into newer countries. On the domestic front though, the demand outlook for commercial vehicle sales is expected to remain weak due to slowdown in economic activity. We maintain our Neutral rating on the stock.

Economic and Political News

- Private investment in roads hinges on key policy changes

- Grant of NDMA to India by Pakistan will boost bilateral trade: FIEO

- PE firms invest US$2bn via 89 deals in 1QCY2014: Report

Corporate News

- Airtel's data user base expected to reach 129mn by FY201 7: CLSA

- RIL gets US$500mn loan from Export Development Canada

- Oman may buy stake in Petronet's planned unit in India