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Indian stock market and companies daily report (March 07, 2013, Thursday)

Contributed by Angel Broking

The Indian market is expected to open in the red today, mirroring negative opening trades in the SGX Nifty and mixed opening in the Asian markets.

After moving notably higher over the course of TuesdayRs.s session, US stocks turned in a relatively lackluster performance during trading on Wednesday, amid uncertainty about the near-term outlook for the markets, following recent strength. The majority of the European markets ended WednesdayRs.s trading session in negative territory. The markets were up in early trade, adding to the strong rally of the previous session. The better-than-expected private sector employment data released in the afternoon also provided support. However, those early gains began to erode in late trading. Investors will watch out for ThursdayRs.s announcement from the ECB, as well as the US jobs report on Friday.

Meanwhile, Indian shares rose on Wednesday, mirroring strong global cues, with upbeat economic data from the United States and continued hopes for easy monetary policy in Japan and elsewhere underpinning sentiment.


Markets Today

The trend deciding level for the day is 1 9,247/ 5,814 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 19,299 - 19,345 / 5,833 - 5,848 levels. However, if NIFTY trades below 19,247/ 5,814 levels for the first half-an-hour of trade then it may correct up to 1 9,201 - 19,149 / 5,800 - 5,780 levels.


Cement dispatches - February 2013

Cement demand continued to remain weak during February 2013 as economic slowdown impacted construction activities. Prolonged cold weather too impacted demand in some regions during the month. During February 2013 Ultratech Cement posted a 5.9% yoy decline in cement dispatches to 3.31 mn tonnes. Shree Cement too posted a 16% yoy decline in dispatches to 0.97mn tonnes. JK Lakshmi Cement posted a marginal 1.3% yoy decline in dispatches. However, Dalmia Bharat Cement a south based player posted an impressive 33% yoy growth in dispatches for the month of February. We maintain a Buy on JK Lakshmi Cement with a target price of Rs.143. We maintain a neutral on Ultratech Cement and Shree Cement.


Tool down protest at MM's Nashik plant impacts production

As per media reports, around 3,000 workers at Mahindra and MahindraRs.s (MM) Nashik plant are on a tool down protest since March 5, 2013. The workers have been protesting against the suspension of the Union general secretary who was being alleged of stopping the production on March 3, 2013. The workers at the plant have been agitating over the issue of the impending salary revisions. According to the company, the Employee Union has also issued a notice of strike on or after March 11, 2013, should the Charter of Demand made by union is not settled.

The tool down strike has impacted the production of the company and according to the initial estimates the company has lost around 500 units of production. The Nashik plant of MM manufactures popular models like, Scorpio, Xylo, Bolero and Verito. While the loss in production is not likely to have immediate impact given that MM has three weeks of channel inventory; we fear that a prolonged strike would impact the sales volume significantly. However on the positive side, management has stated that they are in a regular dialogue with the Union members for the wage negotiation process and expects to reach a mutually agreeable settlement at the earliest possible. At Rs.878, MM is trading at 13.7x FY2014 earnings. We maintain our Buy rating on the stock with an SOTP based target price of Rs.1,019.


Economic and Political News

- Share of exports in IndiaRs.s overall GDP rises to 17.7% in FY1 2

- Companies facing probe allowed to tap ECBs via automatic route: RBI

- Moily red flags Finance MinistryRs.s proposal on fuel pricing

- Power Ministry seeks feedback from companies to overcome sectoral issues


Corporate News

- 4,000 MW Mundra UMPP fully operational: Tata Power

- RCF stake sale offer on March 8: disinvestment secretary

- RIL teams up with Samsung, plans 4G phones for 5.5k

- Coal India's CMD should be replaced, says UK-based TCI