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Reports India

Indian stock market and companies daily report (March 27, 2014, Thursday)

March 27, 2014, Thursday, 06:03 GMT | 02:03 EST | 10:33 IST | 13:03 SGT
Contributed by Angel Broking


The Indian Markets are expected to open on a flattish note tracking flat opening in SGX Nifty and negative opening in most of the Asian markets.

US markets finished lower on Wednesday after mid-afternoon selling intensified when President Barack Obama, in a speech in Brussels, called for further economic sanctions against Russia over its annexation of Crimea. The Commerce Department's report on durable goods orders indicated that the durable goods orders surged up by 2.2% in February following a revised 1.3% decrease in January, however, when excluding a jump in orders for transportation equipment, durable goods orders inched up by just 0.2% in February compared to estimates for a 0.3% increase. Meanwhile, European markets rallied on Wednesday, extending recent gains amid renewed talk about monetary stimulus from the European Central Bank.

Indian markets ended a choppy session modestly higher on Wednesday, with sentiment underpinned by continued foreign fund inflows and firm global cues. FIIs invested around US$2.5bn in Indian equities over the past one month on growing expectations that a stable pro-reform government at the Centre will be able to push through reforms.


Markets Today

The trend deciding level for the day is 22,096 / 6,603 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 22,171 - 22,248 / 6,626 - 6,650 levels. However, if NIFTY trades below 22,096 / 6,603 levels for the first half-an-hour of trade then it may correct 22,020 - 21,944 / 6,579 - 6,556 levels.


Indian Court panel recommends resumption of mining in Goa

A panel of Indian Court has recommended to resume mining in Goa with certain conditions and lower production. Mining in Goa has been banned in Goa since October 201 2. The iron ore mining capacity has been recommended with a cap of 20mn tonnes which is 40% lower than Goa's FY2012 production. Supreme Court is likely to accept most recommendations in our view. However, resumption of mining in Goa is unlikely to affect domestic iron ore pricing as the Goan low-grade is mainly meant for exports.

Sesa Sterlite is likely to be a beneficiary once the mining resumes in Goa. However, the clearances of regulatory hurdles (permissions, R&R etc) are likely to take their own time (as witnessed in Karnataka) in our view. Moreover, there is no clarity on the quantum of production capacity limit recommended for Sesa Sterlite's iron ore mining. We await further clarity on this matter. Until then, we maintain our estimates and Accumulate rating on the stock.


Infosys gives salary hike of 4-10% from April 1, 2014

As per media reports, Infosys has given salary increments of 4% - 10% for employees between job levels 2 and 6. The increments will be effective April 1, 2014. Level 2 comprises junior employees, including non-engineering graduates and customer support executives, and level 6 are project managers and senior project managers. In February, the company had said it would give an average of 5% to 7% salary increase for employees between job levels 2 and 6.

In the last two years, increments were delayed, following the company's mediocre performance. Last year it was given effective from July, soon after Mr. Narayana Murthy's return to the company. The year before that it was given in October. Mr. Murthy had recently stated that the company would return to the April-March cycle this year. Last year, there was an average ~8% increase in salaries for employees in India and ~3% for those based overseas. Given that and the company's objective to revert to April cycle, we had already factored wage hikes from April 1, 2014 (7% offshore and 2% onsite). We maintain our Accumulate rating on the stock with a target price of Rs.3570.


J&J Pharmaceuticals resumes the supply of Doxil

J&J Pharmaceuticals has resumed the supply of Doxil (doxorubicin Hcl liposome injection) by manufacturing it through an alternative manufacturing approach. As per the new approach, J&J will source the bulk product from the Ben Venue plant, while another manufacturer will make the finished product. The new approach has not been approved by the US FDA. However, the launch has been facilitated with US FDA regulatory discretion. As a result, the supply has been restricted to one lot of Doxil 20 mg/10 ml vials. The re-entry of J&J into the market is negative for Sun Pharmaceuticals. In the absence of the innovator, Sun was enjoying sole player status in the Doxorubicin Hcl liposome injection market. However, given, the only generic in the place, the company should not face much pressure, thus we expect that the event, would have a marginal impact on the Sun Pharmaceuticals numbers. We remain neutral on the stock.


Economic and Political News

- Indirect tax collection at Rs.4.4lakh cr in April, 2013 - Feb, 2014

- Lower CAD limits India's exposure to global shocks: Moody's

- Oil refining sector outlook subdued on higher under-recoveries

- SC grants conditional bail to Subrata Roy

- UAE Exchange handles US$7.18bn remittances in 2013


Corporate News

- Educomp Solutions gets approval for debt restructuring

- R-Infra buys additional 2.32% stake in R-Power

- Suven Life gets 2 product patents in US