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Reports India

Indian stock market and companies daily report (December 27, 2013, Friday)

December 27, 2013, Friday, 04:16 GMT | 23:16 EST | 08:46 IST | 11:16 SGT
Contributed by Angel Broking

Indian markets are expected to open flat tracking marginally positive opening in the Asian markets.

The US markets rallied on Thursday, extending their record run after government data showed a decline in weekly jobless claims. Optimism about the outlook for the economy contributed to the strength on Wall Street following the release of a report from the Labor Department showing a steep drop in weekly jobless claims in the week ended December 21st. The Labor Department indicated that the initial jobless claims tumbled to 338,000, a decrease of 42,000 from the previous week's revised figure of 380,000. The notable decrease partly offset the sharp jump seen in the first week of December, reflecting the volatility typically seen during the holiday season.

The Indian markets closed flat with a positive bias on December derivative contracts expiry day, but the broader markets outperformed benchmarks for the third consecutive session on Thursday.

Markets Today

The trend deciding level for the day is 21,075 / 6,280 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 21,136 - 21,197 / 6,301 - 6,324 levels. However, if NIFTY trades below 21,075 / 6,280 levels for the first half-an-hour of trade then it may correct up to 21,013 - 20,952 / 6,258 - 6,237 levels.

Trai imposes fine on nine telecom companies for poor service

Telecom regulator TRAI has imposed cumulative penalty of Rs.50 lakh on nine mobile operators for failing to meet quality of service benchmarks in the second quarter ended June 2013, as per media reports. The regulator has imposed maximum penalty of Rs.14.5 lakh on state-run telecom company BSNL for failing to meet 13 quality of service parameters. TRAI imposed Rs.12.5 lakh penalty on Aircel and Reliance Communications (including Reliance Telecom) for failing to meet certain parameters. The regulator imposed a penalty of Rs.3 lakh on Idea Cellular, Rs.2 lakh each on Bharti Airtel and Vodafone, Rs.1.5 lakh each on Uninor and Vodafone; no penalty was imposed on Videocon, Loop Mobile and state-run MTNL. A fine of Rs.50,000 was imposed on CDMA operator MTS. Under existing regulations, TRAI can impose up to Rs.50,000 penalty on telecom operators for failing to meet any quality of service parameter for mobile services and up to Rs.1 lakh for repeating such failure. We maintain our Neutral view on the telecom sector.

ONGC temporarily shuts oilfield operations in South Sudan

ONGC's foreign subsidiary ONGC Videsh (OVL) has temporarily shut its two oilfield operations in South Sudan due to ongoing tensions and security issues in the country. The two fields which were operational are Greater Nile Oil Project (GNOP) Block 1, 2 & 4 and SPOC Block 5A in which OVL has 25.0% stake and it has been shut w.e.f December 22, 2013. The impact of this shutdown on the total production of oil & oil equivalent gas (O& OEG) for ONGC is less than 1.0% on the consolidated level and hence we do not see any meaningful impact on the company's financial performance in the near-term. Moreover, this is likely to be a temporary shutdown. Hence, we maintain our Accumulate view on the stock with a target price of Rs.318.

JSW Steel to hike prices by 2%

Media reports suggests that JSW Steel will raise steel prices by 2% in the domestic market to pass on the rising costs. Domestic iron ore prices have increased by 25% recently while coking coal prices have also increased by USD10-20/tonne effective January 2014. However, steel demand in India remains weak currently. Hence, we remain cautious of any price hikes by steel makers. We maintain our Sell rating on the stock with a target price of Rs.775.

IGL raises CNG prices by Rs.4.5/kg in Delhi

Indraprasth Gas (IGL) has raised CNG prices by Rs.4.5/kg to Rs.50.1/kg. Recently the Gujarat High court had ordered GAIL to supply domestically produced natural gas in the same proportion to all the CGD companies across the country. Due to this order IGL's share of domestic gas allocation will be reduced which will now be substituted by (expensive) imported gas. Therefore, in our view this price hike is only a pass through of the increased cost of gas. Hence, this hike is unlikely to have meaningful impact on the company's profits. Thus, we maintain our estimates and Neutral rating on the stock.

IRB Infrastructure Developers has achieved financial closure of IRB Westcoast Tollway

IRB Infrastructure's wholly-owned subsidiary IRB Westcoast Tollway Pvt. has achieved financial closure in terms of the concession agreement executed with NHAI, by tying up of project finance of Rs.1,406cr. The total cost of the project is estimate to be Rs.2,639cr, out of which viability gap funding from NHAI of Rs.536cr, equity contribution by the company will be ~Rs.697cr and remaining will be funded through project finance. A Consortium of Lenders comprising of IDBI Bank ltd -Lead Institution, Allahabad Bank, Bank of Baroda, Bank of India, Canara Bank and Union Bank of India have financed this project. We maintain our Accumulate rating on the stock with a target price of Rs.104.

Economic and Political News

- Cabinet nod to coal supply for 9 power projects with tapering linkage

- CCEA nod for loans to sugar mills to clear cane price arrears

- Court rejects riots petition against Narendra Modi

- Poor economy derails Planning Commission's 8% growth target

- Sluggish markets, debt posing challenges for project management: SCOPE

Corporate News

- Bajaj Corp has formed a 100% subsidiary Bajaj Corp International for skin and hair care products business

- Government gives nod for hiking foreign investment in Axis Bank to 62%

- Government infuses Rs.700cr and Rs.400cr in Dena Bank and Allahabad Bank respectively thorugh prefential allotment

- NTPCl ines up new projects of 19,000 MW capacity

- Tata Steel to commission 1st phase of Odisha plant by March 2015

- UltraTech Cement gets EAC clearance to set up a facility in Tamil Nadu