Reports » India
Indian stock market and companies daily report (September 03, 2013, Tuesday)
Indian markets are expected to open in the positive territory tracking a positive opening in SGX Nifty. Most of the Asian markets are trading in the positive territory.
The US markets were closed yesterday for the Labor Day national holiday. Meanwhile the European markets ended notably higher on Monday, after results of two separate surveys showed that China's manufacturing sector performance strengthened in August, suggesting that the overall economic growth may gather pace in the coming months. Manufacturing data from the region also helped influence sentiment.
Indian shares rose sharply to hit a two-week high on Monday, as falling oil prices and the rupee's rebound last week following measures announced by the RBI outweighed weaker-than-expected GDP data. Global cues remained supportive, further bolstering investor sentiment.
The trend deciding level for the day is 18,836/ 5,532 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 18,992 - 19,099 / 5,584 - 5,618 levels. However, if NIFTY trades below 1 8,836/ 5,532 levels for the first half-an-hour of trade then it may correct up to 18,729 - 18,573 / 5,498 - 5,445 levels.
Auto Monthly - August 2013 Ashok Leyland
Ashok Leyland (AL) witnessed a steep decline of 18.3% mom in its total sales to 7,139 units led by the weak demand environment amidst slowdown in the economic activity. While medium and heavy commercial vehicle (MHCV) sales posted a decline of 21.1% mom; Dost sales too posted a decline of 11.3% mom during the month. On a yoy basis too, total sales declined by 24.3% with MHCV and Dost sales registering a decline of 25.1% and 22.4% yoy respectively.
Bajaj Auto recorded an in-line volume growth of 11% mom to 312,188 units led by a 12.9% mom growth in the motorcycle sales primarily driven by the exports. Total exports surged sharply by 31% mom during the month. The three-wheeler sales however declined 2.6% mom as the sales continue to be impacted due to the slowdown in Egypt. Domestic sales too declined by 1.9% mom due to the weak demand for motorcycles. On a yoy basis, total sales posted a decline of 9.5% yoy following a 21.2% decline in domestic volumes. Exports however, registered a growth of 9.6% yoy. The company has launched new three-wheelers in an attempt to progressively replace the entire portfolio over the next 3-4 months. Further, the company also intends to launch new variants of Discover around the festival season.
Hero MotoCorp (HMCL) registered lower-than-expected volumes in August 2013 as volumes continue to be impacted by the slowdown in motorcycle demand and higher competition from Honda. Overall sales declined 5.7% mom to 459,996 units. However, on a yoy basis, the sales grew by 3.6% primarily due to the base effect. Going ahead, the company expects better monsoons to revive growth during the festival season.
Mahindra and Mahindra
Mahindra and Mahindra's (MM) tractor sales came in lower-than-expected at 14,158 units, down 23.3% mom as domestic sales declined by 23.8% mom during the month. However on a yoy basis, tractor sales grew by 7% yoy led by a 9.3% yoy growth in domestic sales driven by good monsoon and improved prospects for kharif crop. Meanwhile, the company has reached an agreement on the wage settlement issue with the workers at the Nashik plant after negotiating for almost a year. According to the media reports, the company will give an average wage hike of '9,300/ month to all its 2,950 permanent employees at the facility and the union has agreed to scale up production by 18% in a quid-pro-quo arrangement. The Nashik plant employs around ~4,000 workers, out of which ~ 1,000 are on contract basis, and produces models like Bolero, Scorpio, Xylo Quanto and Verito.
Maruti Suzuki (MSIL) registered a better-than-expected volume growth of 4.8% mom to 87,323 units driven by a strong 38.6% mom growth in exports. The domestic volumes though grew modestly by 1.2% mom and were led by a strong 25.4% mom growth in the compact segment. The utility vehicle sales of MSIL have slowed down considerably over the last few months due to the increasing competition from Renault and Ford and also due to the slowdown in demand for diesel vehicles post the recent hike in the fuel prices. On a yoy basis, total sales registered a growth of 61.2% yoy primarily due to the low base of last year. The company's sales in August 2012 were impacted due to the labor problems at the Manesar plant which had led to temporary shutdown in production.
TCS bags deal to implement NCB's core banking platform
As part of efforts to develop electronic services and ensure quality services to its customers across all channels, the National Commercial Bank (NCB) has selected Tata Consultancy Services (TCS) to implement a new core banking software platform. The agreement between the two parties will be valid for two years. The selection of TCS by the NCB was based on the former's expertise in the field of core banking software and delivery of IT services. The agreement comes as part of NCB's endeavour to provide the highest levels of service to its customers through the provision of advanced and technically sophisticated service channels. We continue to remain positive on TCS but owing to recent sharp run up in the stock price, we maintain our Neutral rating on the stock
NTPC likely to bid for ultra-mega power projects
NTPC Ltd. is likely to bid for two ultra-mega power projects (UMPPs) worth '20,000cr each in Odisha and Tamil Nadu according to a top company executive. However, the Chairman & MD said that they have been participating in UMPPs and will bid for such projects as and when they come. The Power Finance Corporation (PFC) is expected to invite preliminary bids for the two UMPPs this week. He also said that raising funds will not be an issue and the company would also bid aggressively for coal blocks if the government puts them on auction. It is working on coal blocks in Jharkhand, Andhra Pradesh and Odisha with total geological reserves of 3,732 million tonnes (mt) and mineable reserves of 2,035 mt. The company plans to mine around 33 mt per annum by 2017 from these blocks. The Ministry of Coal has also allocated four additional blocks to NTPC in Chattisgarh and Odisha. NTPC plans to produce nearly 100 million tonnes over the next 5-6 years to meet its fuel demand. Currently, NTPC has an installed capacity of ~41,000MW excluding its joint ventures. We maintain Buy on the stock with a Target Price of '163.
SAIL's August sales volumes grows 16% yoy
SAIL reported sales volumes for August 2013. Its sales volumes grew by 16% yoy to 1.09mn tonnes during August 2013. The increase in volumes is mainly due to lower base during August 2012 in our view. However, given the weak steel demand in India, we expect SAIL to lose market share. Hence, we maintain our Neutral rating on the stock.
Economic and Political News
- Bhutan seeks investments from India in various sectors
- India, Japan to resume negotiations on civil nuclear pact
- HSBC, Nomura cut GDP forecast to 4-4.2%
- Odisha eases restriction on iron ore fines sale to sponge iron plants
- NSIC signs pact with SBI for cheap loans to MSMEs
- Larsen & Toubro bags orders worth '1,141cr. in August
- CIL produces 31.6 MT of coal in Aug; misses target
- ONGC, Essar Oil shortlisted to bid for Iraq's Nassiriya field
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