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Indian stock market and companies daily report (January 02, 2013, Wednesday)

Contributed by Angel Broking

The Indian market is expected to open in the green today tracing the positive opening trades in the SGX Nifty. SGX Nifty is currently trading 0.4% higher, following reports that U.S. lawmakers are hopeful of reaching a sweeping deal to resolve the fiscal crisis that would let income taxes rise significantly for the first time in more than two decades.

US markets moved sharply higher during the trading session on Monday and ended in the green, as traders kept a close eye on developments in Washington, with comments from lawmakers indicating that a budget agreement could be reached in the near future. The rally on the day came on the heels of the downward trend seen over the past several sessions. Major European bourses declined during the trading session, as investor concerns over the ongoing budget negotiations in the United States continued to weigh on the markets.

Meanwhile, the Indian markets ended the last trading session of the year 2012 on a quiet note. Traders remained cautious and reduced their positions as uncertainty persisted over the fiscal cliff issue.

Markets Today

The trend deciding level for the day is 19,571 / 5,950 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 19,633 - 19,686 / 5,965 - 5,979 levels. However, if NIFTY trades below 19,571 / 5,950 levels for the first half-an-hour of trade then it may correct up to 19,51 9 - 19,456 / 5,936 - 5,921 levels.

Government starts coal block allocation under new policy

Business Standard reported that the government has initiated a process of coal block allocation under a new policy under which it will allocate 14 coal blocks with total coal reserves of 8.2bn tonnes to government companies. Public sector steel and power companies can apply for the blocks by January 30, 2013. The ministry has published the selection criteria based on a 30-point system assigning the highest 9 points for "preparedness of the plan". However, there is no clarity on reserve price of these blocks currently. Going forward, the government aims to allocate another 41 coal blocks through competitive bidding. Although allocating coal blocks will have no material impact on steel and power companiesRs. financials in our investment horizon, the process of allocating coal blocks via competitive bidding is structurally positive for steel and power companies.

Auto sales numbers - December 2012

Tata Motors

Tata Motors (TTMT) reported in-line volumes for December 2012 with total volumes registering a decline of 20.3% yoy (1.4% mom) to 65,582 units led by sharp decline of 19.5% yoy (1% mom) in domestic sales. On the domestic front, light commercial vehicle sales continued its momentum posting a strong growth of 27.6% yoy (8.1% mom). However, the medium and heavy commercial vehicle sales witnessed a considerable decline of 45.9% yoy leading to a 0.5% yoy (up 7.2% mom) decline in commercial vehicle sales. The MHCV segment continues to be impacted by the slowdown in the industrial activity and due to the lack of freight demand. On the passenger vehicle front, total domestic volumes fell sharply by 50.9% yoy (21.3% mom) largely on account of 52.4% yoy (16.8% mom) decline in passenger cars.

Mahindra and Mahindra

Mahindra and Mahindra (MM) reported muted volume growth of 1.4% yoy (down 12.5% mom) in December 2012 as farm equipment segment posted sharp decline in sales. The growth in the automotive segment too slowed down during the month. The automotive segment grew by a modest 5.9% yoy (down 5.9% mom) mainly due to flat growth (down 4.5% mom) in the pick-up segment and 9.3% yoy decline in the three-wheeler sales. Exports too registered a sluggish growth of 4.2% yoy. However, the passenger vehicle sales maintained its momentum on the back of the new launches XUV5OO, Quanto and Rexton, and recorded a strong growth of 17.7% yoy. In the farm-equipment segment, MM post considerably lower than expected sales as domestic volumes witnessed a decline of 10.5% yoy (down 30.6% mom).

Hero MotoCorp

Hero MotoCorp (HMCL) registered better-than-expected performance in December with total sales posting a growth of 7.8% mom to 541,615 units. On a yoy basis though, the volumes remained flat as demand in the domestic markets continue to remain sluggish. Going ahead, HMCL intends to improve sales led by various marketing and customer engagement initiatives.

TVS Motor

TVS Motor (TVSL) posted weak sales for December 2012 with total volumes registering a decline of 8.3% yoy (9.1% mom) to 156,221 units. The weak performance can be attributed to the weakness in the two-wheeler portfolio which registered a decline of 9.6% yoy (9% mom). The scooters and mopeds segment witnessed a decline of 32.2% and 8% yoy respectively during the month. Nonetheless, the motorcycle sales posted a growth of 6.3% yoy led by the launch of Phoenix. TVSL registered better-than-expected growth in three-wheeler sales (77.8% yoy) led by an impressive exports growth of 133% yoy.

Economic and Political News

- FIPB to take up IKEA plan next week

- Economic growth may not cross 6% in FY13: Assocham

- Government cuts import tariff value of gold, silver

Corporate News

- Aurobindo Pharma gets US nod for anti-migraine tablets

- Mercedes-Benz India to raise prices by 1 -3%

- L&T Finance Holdings acquires Family Credit for Rs.1 20cr

- GCPL subsidiary acquires UKRs.s fourth largest deodorant brand