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Indian stock market and companies daily report (March 08, 2013, Friday)

Contributed by Angel Broking

The Indian market is expected to open flat today, mirroring flat opening trades in the SGX Nifty in spite of positive opening in the Asian markets.

US market moved mostly higher over the course of the trading day on Thursday, after turning in lackluster performance in the previous session. The modest strength on Wall Street came following the release of a report from the Labor Department showing an unexpected drop in weekly jobless claims. The report said initial jobless claims fell to 340,000 in the week ended March 2nd, a decrease of 7,000 from the previous week's revised figure of 347,000. Most of the European markets ended the trading session on Thursday with modest gains. The markets pared their gains after the ECB and the BoE both maintained their respective interest rates. The European Central Bank maintained status quo in March amid rising concerns that the political stalemate in Italy could kindle the Eurozone sovereign debt crisis as the bloc battles a recession.

Meanwhile, Indian shares extended gains for a third straight session, as technology stocks gained on expectations of improving sector earnings this year, especially in the United States.


Markets Today

The trend deciding level for the day is 19,364/ 5,848 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 19,515 - 19,617 / 5,894 - 5,924 levels. However, if NIFTY trades below 19,364/ 5,848 levels for the first half-an-hour of trade then it may correct up to 19,262 - 19,111 / 5,817 - 5,771 levels.


Coal India reports production and offtake for February 2013

Coal India (CIL) reported its February production and offtake numbers. The production was 42.6mn tonne in the month of February which was 4% below the target set by CIL while the offtake was 39.7mn tonne, ie 3% below their target. We maintain our production and offtake targets at 458mn tonne and 470mn tonne, respectively, for FY2013. We maintain our Buy rating on the stock with a target price of ?368.


MM workers call off protests at Nashik plant

According to media reports, the tool down protest which was carried out by the workers at Mahindra and Mahindra's (MM) Nashik plant has been called off and normal production has been restored at the plant. This is following an agreement with the Employee Union to withdraw suspension of two workers and finalize wage agreement by April 15, 2013. Also, the management continues to negotiate with the workers to arrive at a long term wage settlement agreement. We see this as a positive development for MM and restoration of normal operations at the plant will enable the company to meet the market demand. Although MM has lost —1,100 units in production because of the protests, we do not expect any significant impact of the same on its market share or the profitability given that MM has three weeks of inventory in the pipeline. We continue to maintain our positive stance on the stock. At '885, MM is trading at 13.8x FY2014 earnings. We maintain our Buy rating on the stock with an SOTP based target price of ?1,019.


Divestment in RCF

The government is to divest 12.5% stake in Rashtriya Chemicals and Fertilizers (RCF) through the OFS route today. Government shareholding in the company is expected to come down to 80% post the stake sale from 92.5%. So far, the government has raised '21,500cr through its disinvestment program for FY2013 fiscal as against its revised estimate of '24,000cr for the period. The disinvestment in RCF is likely to fetch the exchequer approximately '300cr. Going ahead, MMTC, SAIL and NALCO are amongst the likely candidates for disinvestment. The government has increased disinvestment target for FY2014 by 66.7% (at '40,000cr) as compared to its revised estimate and meeting the budgeted target would depend on buoyancy in the capital market.


Economic and Political News

- Government to cut subsidies outgo to 1.5% of GDP by FY2017

- National free roaming likely before October: Sibal

- Double-digit growth without reforms dangerous: Moody's


Corporate News

- Coal India to set up Rs.9,000cr power plant in Odisha

- HPCL to set up Rs.37,000cr project in Rajasthan

- L&T approaches government to surrender SEZ, 16 companies seek more time

- Wipro launches new platform for healthcare providers