Reports » India

Indian stock market and companies daily report (September 27, 2012, Thursday)

Contributed by Angel Broking

Indian markets are expected to open flat today tracing flat to marginally positive opening trades in most of the Asian bourses and the SGX Nifty. Major Asian markets are trading slightly higher as a drop in Chinese industrial profits has reignited speculation that Chinese central bank will take measures to support economic growth.

US markets saw considerable weakness during the trading session on Wednesday, which added further to the steep losses posted in the previous session. Lingering concerns about the financial situation in Europe continued to weigh on the markets along with a negative reaction to U.S. housing data. As per the Commerce department, new home sales edged down 0.3% in contrast to economist expectation of growth. Most of the European bourses closed solidly lower on Wednesday, as investors concerns over the situation in Spain took center stage.

Meanwhile, Indian markets posted modest losses on Wednesday, as investors booked some profits on F&O expiry amid extremely weak global cues. Global cues were subdued, with continued tensions between China and Japan, lingering uncertainty over when Spain will seek a bailout and apprehensions about the effectiveness of recent central bank actions cast a shadow on global growth prospects.

Markets Today

The trend deciding level for the day is 18,625 / 5,658 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 18,677 - 18,723 / 5,678 - 5,692 levels. However, if NIFTY trades below 18,625 / 5,658 levels for the first half-an-hour of trade then it may correct up to 18,580 - 18,528 / 5,644 - 5,624 levels.

Coal India notifies new supply pact with power companies

As per the new agreement, Coal India will reduce the proportion of imported coal in its fuel supply to power producers from 15% during FY2013 to 5% in FY2017. Further, there will be no force majeure clauses, which has excused Coal India from meeting its obligations during unforeseen events beyond its control (in the past). Coal India will meet 80% of the coal requirements of power companies, a part of which will be imported. The volume of imported coal will be considered 1.5 times the volume of domestic coal as imported coal has less ash content than coal mined in India. The new FSA will be applicable to power generation units commissioned after December 2009 and units that will commission before March 2015. In case Coal India defaults to supply the stipulated quantity of imported coal, it will pay a penalty of 1.5% of the price of shortfall quantity. Since Coal India is likely to bear any loss on account of imported coal, we believe these new FSA terms will be profit-neutral for Coal India. Hence, we maintain our Neutral view on the stock.

Infosys bags contract for MCA's e-governance program

Infosys has bagged the contract to do a makeover for Ministry of Corporate Affairs (MCA). Infosys will execute the second phase of the ministry's e-governance program - MCA21, which will start from January and continue till July 2021 with a total project outlay of '358cr. Under the program, Infosys will gradually replace all desktops, printers and scanners at the ministry with fully automated systems. This also includes replacement of out-of-support servers and associated infrastructure. The project will be continued as public private partnership, with service level-based equated quarterly payments to Infosys. This move is likely to help companies as it envisages electronic filing of documents, registration of companies and public access to corporate information online through a secure interactive portal. Owing to recent stock run-up, we maintain Neutral view on the stock.

L&T bags orders worth Rs.1,241cr

Larsen & Toubro (L&T) Construction has secured new orders worth Rs.1,241cr across various business segments in the month of September 2012. The Buildings & Factories IC has bagged new orders worth '697cr for the construction of residential towers, cement plants and factory structures across the country. In the Railways Business sector, the Company has won orders aggregating '544cr from Rail Vikas Nigam Limited (RVNL). The scope of work includes Railway electrification works between Guntakal-Raichur-Wadi stations of South Central Railway and another order for railway construction, track work, signaling and telecommunication in the Lucknow and Izatnagar divisions of North Eastern Railway. We recommend Accumulate on the stock with a SOTP target price of '1,721.

Economic and Political News

- India sovereign ratings remain 'stable': Moody's

- DoT to haul up GSM biggies over 3G roaming pacts: Kapil Sibal

- GoM on drug pricing policy to meet tomorrow

Corporate News

- Kingfisher in talks with foreign carriers to sell stake

- ONGC-Teri JV to bid for $3bn Kuwait contract

- Bharti-Walmart not to wait for all states for retail FDI

- JSL gets shareholders' nod to raise up to Rs 1,552 crore