Infosys, trade deficit fail to cheer indices

The Indian equity market ended on a flat note on Friday despite better than expected quarterly earning from IT bellwether Infosys and narrowing trade deficit data. Infosys bottom line soared by 21% sequentially to US$463mn, on better control on operating costs. The company grew its revenues in dollar terms by 1.7% compared to the Q2. Infy added 54 new clients in the quarter and have added 15 clients where the deal size is over US$100mn. Infosys also improved its utilisation from 73.7% in the second quarter to 74.1%.

Commenting on the same, Amar Ambani, Head of Research at IIFL said, “ Infosys Q3 FY14 results were healthy characterized by significant margin (27.6% v/s expected 27.1%) and bottomline (Rs. 28.75bn v/s expected Rs. 27.5bn) beat. Driven by various cost rationalization initiatives, the operating margin improved by impressive 170bps qoq. The scope for further margin improvement remains significant as efficiency initiatives continue and utilization continues to improve in a accelerating revenue growth environment.FY14 dollar growth guidance upgrade was in-line with our expectations to 11.5-12%. There is also a marked improvement in management commentary which is reassuring. We remain positive on the stock and have upgraded earnings estimates for FY14/15.” 

India's trade deficit widened in December, but imports continued to fall, driven by curbs on gold. The trade deficit stood at US$10.14bn compared with US$9.22bn in November. However, trade deficit for December eased significantly on a year-on-year basis. Merchandise exports rose 3.49% yoy to US $26.35bn, slowing down from a 5.86% pace in November. Imports fell 15.25% yoy to US$36.49bn led by a 68.83% yoy drop in gold and silver imports.

On the currency front, the rupee hit a one-week high of 61.94 on Friday, its highest since January 2. The pair was trading at around 61.98/99 versus its close of 62.07/08 on Thursday, tracking broad losses in the dollar versus other major currency.

The Reserve Bank of India (RBI) was in action during this week. The apex bank announced that it revised the loan-to-value (LTV) cap for gold loan non-banking financial companies (NBFCs) to 75% this quarter from 60%. Muthoot Finance further gained by 7% and Manappuram surged higher by 15%.

Finally, BSE Sensex closed at 20,758 up 45 points, while NSE Nifty closed at 6,171 up 3 points over the previous close.

FIIs increase stake in Larsen & Toubro to 17.85% in Q3 FY14

Foreign institutional investors (FIIs) have increased their stake in Larsen & Toubro (L&T) to 17.85% in October-December from 15.25% in Q2 FY14. FIIs have purchased an additional 24.2 million shares or 2.6% stake of L&T in Q3 FY14 after better than expected results for the quarter ended September. Presently FIIs holding in the company is highest since December 2007. However, total holdings of domestic institutional investors (DIIs) in the company have drop to 36.61% from 37.36% during the quarter.

Larsen & Toubro (L&T) is a technology, engineering, construction and manufacturing company. It is one of the largest and most respected companies in India's private sector. More than seven decades of a strong, customer-focused approach and the continuous quest for world-class quality have enabled it to attain and sustain leadership in all its major lines of business.

BPCL to shut crude unit at Mumbai refinery for maintenance work: Report

Bharat Petroleum Corporation (BPCL) is reportedly planning to shut crude unit at its Mumbai refinery for about 15 days in April-May on account of 40-day maintenance work at its catalytic cracker unit. The company will use the opportunity to carry out some modification in the crude unit too.

The cracker has a capacity of 0.65 million tonnes a year and the crude unit operates at about 80,000 barrels per day. Separately, the refiner has completed a 28-day maintenance shutdown at its 900,000 tonnes a year fluidised catalytic cracker unit.

BPCL is into exploration, production and retailing of petroleum and petrol related products. The retail business unit of BPCL is into marketing of petrol, diesel and kerosene.

RBI relaxes FDI guidelines to give foreign investors exit option

With an aim to enhance foreign investment into the country, the Reserve Bank of India (RBI) has given foreign investors an option to exit their investments by selling their holdings of equity or debt.

As per the modified Foreign Direct Investment (FDI) norms, FDI contracts now have optionally clauses, which allow investors to exit, subject to the conditions of minimum lock-in period and without any assured returns. Earlier, equity shares, compulsorily and mandatorily convertible preference shares or debentures issued to persons resident outside India were not allowed to have any optional clause. FDI is considered crucial for the economic development of the country and India would require around $1 trillion in the 12th five year plan (2012-2017), to overhaul its infrastructure sector such as ports, airports and highways to boost growth.

Despite the government's various efforts to increase FDI, foreign investments in the current fiscal have declined, which reflects the need to take more measures to improve the business environment in the country. During April-October period of current fiscal, FDI in India declined by about 15 percent to $12.6 billion crore as against the $14.78 billion recorded in the same period of previous fiscal. The sectors that received large inflows during the first five months of current fiscal include food processing industries ($2.14 billion), services ($1.36 billion), pharmaceuticals ($1.08 billion), automobile ($784 million) and construction development ($699 million). 

TTML’s total subscribers stood at 10,412,090 in December 2013

Tata Teleservices (Maharashtra) (TTML) has reported the subscriber figures as on December 30, 2013. The company’s total subscribers stood at 10,412,090 of which Wireline contributes 768,305, FWT 748,218 and Mobile 8,895,567 subscribers.

In Mumbai service area, the company’s total subscribers stood at 3,989,879 of which Wireline contributes 518,645, FWT 8,440 and Mobile 3,462,794 subscribers while in Rest of Maharashtra, the company’s total subscribers stood at 6,422,211 of which Wireline contributes 249,660, FWT 739,778 and Mobile 5,432,773 subscribers.

Tata Teleservices Maharashtra (TTML) is a part of the Tata Group. This telecom services company has its presence all over Maharashtra and Goa.

Indian economic growth likely to improve in coming future: ZyFin BCI

As per the ZyFin Business firm, a leading macro analytics firm focused on emerging markets, highlighted that Indian economic growth is likely to improve in the coming future on the back of increasing exports and industrial activity in the country. ZyFin Research's Business Cycle Indicator (BCI) that reflects various macroeconomic trends on a monthly basis has registered 4.7 percent growth in December 2013 compared to the same period in the previous year. In November, BCI had improved by 4.2 per cent on year-on-year basis.

Further, ZyFin firm noted that an improvement in BCI for December was led by improving foreign trade statistics, slight decline in petrol import bill and forex reserves among others. ZyFin BCI is a real-time indicator of the Index of Industrial Production (IIP), providing an estimate of the IIP two months prior to the country’s official release. A continuous uptrend in BCI for the three consecutive months signifies an improving business cycle and if this uptick extends for two more months, a more sustainable growth can be expected in industrial activity in India.

However, the analytics firm added that existing downtrend in key real economic variables like production of aluminium, pig iron and electricity, declining domestic air passenger traffic and constricted money supply has become a concerns for economic growth. Highlighting that recovery in consumer demand is essential for a sustained economic growth, ZyFin's Consumer Outlook Index for December has also showed some early indications of improvement in consumer demand in India.  

SBI’s arm enters into business alliance agreement with two Japanese entities

SBI Capital Markets, the investment-banking subsidiary of State Bank of India, has entered into a business alliance agreement with Japan's Mizuho Bank (MHBK) and Mizuho Securities (MHSC) to strengthen cooperation in a wide range of investment banking fields. This agreement is related to promotion of products and knowledge- sharing in areas of syndicate loans, project finance and debt capital markets.  The strategic alliance among the three institutions is a significant step towards synergising their strengths and supporting growing India-Japan relationship.

State Bank of India has reported 35.07% fall in its net profit at Rs 2375.01 crore for the second quarter ended September 30, 2013 as compared to Rs 3658.14 crore for the same quarter in the previous year. However, total income of the bank has increased by 12.88% at Rs 37199.92 crore for quarter under review as compared to Rs 32953.47 crore for the quarter ended September 30, 2012

MCX-SX receives SEBI approval to launch interest rate futures

Multi Commodity Exchange of India (MCX) promoted MCX Stock Exchange (MCX-SX), the new stock exchange, and NSE will be launching interest rate futures. Both the exchanges will launch the product in their currency derivatives segment after receiving approval for the same from The Securities and Exchange Board of India (SEBI).

NSE will launch trading in this instrument on January 21 while MCX-SX will commence trading within this month. The product will benefit banks, brokerage houses, insurance companies and primary dealers, etc.

MCX-SX is the first and only exchange in India to have adopted the Industry Classification Benchmark (ICB), the global company classification standard of the FTSE Group, and also collaborated with Indian Statistical Institute (ISI) - India’s premier statistical research institute - and FTKMC for creating SX40 and other index product offerings that would be launched in the future.

Govt mulls partial rollback of bulk diesel prices

In view of substantial drop in bulk fuel sales, Oil ministry is mulling a partial rollback of bulk diesel prices. In January 2013 government had decided to raise the price of subsidized diesel in small amounts every month and also asked bulk buyers to pay market rates for diesel. However, since then, the sales of bulk diesel had gone down from 18% of the overall diesel sales to 10%. As, all state transport utilities are depending on retail outlets, leaving railways and defense as the only bulk consumers in the country.

Meanwhile, the Petroleum Secretary Vivek Rae has underscored that suggestions put forward by Kirit Parikh panel for a higher dose of monthly diesel price would also be taken up before the Cabinet soon. The Parikh committee, among other things, had suggested Rs 5 hike on diesel prices, Rs 250 a cylinder increase in the price of domestic cooking gas and Rs 4 a litre in kerosene oil, with immediate effect.

Oil Ministry too has highlighted that there was a need to review the subsidy sharing mechanism to ensure that upstream companies get about $65 a barrel on sale of crude oil, which is currently in the range of $40-42 a barrel. This move would be a big positive for upstream oil companies like Oil and Natural Gas Corporation (ONGC) and Oil India, while the Parikh panel has suggested keeping GAIL India out of subsidy sharing mechanism.

Canara Bank staff to support strike call given by UFBU

Canara Bank has received a notice from Canara Bank Staff Federation expressing their support to the strike call given by UFBU. The United Forum of Bank Unions (UFBU) have given a call for All India Industry Strike on 20th and 21st January, 2014.

Canara Bank is India’s fifth largest Public Sector bank (PSB) in terms of assets. As on September 30, 2013, it had assets of around Rs 450,200 crore and advances of around Rs 281100 crore. The bank’s strong market position is underpinned by its market share of around 5.0 percent in deposits and 4.8 percent in advances as on September 30, 2013.

Tara Jewellers’ first stand-alone pop-up store goes live in Gujarat

Tara Jewellers’ first stand-alone pop-up store went live at Virtuous Retail’s VR Surat - retail lifestyle destination. The store will be live for six months.

Tara Jewellers’ collection, which consists of bling pieces for neck, ears and more, is an amalgamation of intricate craftsmanship with a contemporary touch.

Tara Jewels is an integrated player in the jewellery industry with experience ranging from designing to retailing of jewellery. They have been the second highest exporter of studded jewellery from EPZ and EOU complexes in India for the year 2006-2007, 2007-2008 and 2008-2009.

Tech Mahindra plans to buyout Financial Technologies: Report

Tech Mahindra is reportedly planning to buyout Financial Technologies (FT) if the promoter is asked to sell his stake as part of the NSEL scam proceedings. In this regard, the company has initiated an evaluation of Financial Technologies for a buyout possibility.

Tech Mahindra wants to re-gain its strength in the BFSI segment which had been hit bad in the Satyam portfolio. FT may provide enough traction in this vertical.

Tech Mahindra is a leading provider of solutions and services to the telecommunications industry with a majority stake owned by Mahindra & Mahindra. The company, since 2002 has operations in China with offices in Beijing, Shanghai, Nanjing and Guangzhou.

Infosys surges on reporting 21% growth in consolidated net profit

Infosys is currently trading at Rs. 3512.00, up by 60.95 points or 1.77 % from its previous closing of Rs. 3451.05 on the BSE.

The scrip opened at Rs. 3494.00 and has touched a high and low of Rs. 3529.90 and Rs. 3449.00 respectively. So far 102282 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 5 has touched a 52 week high of Rs. 3581.00 on 06-Jan-2014 and a 52 week low of Rs. 2190.00 on 29-Apr-2013.

Last one week high and low of the scrip stood at Rs. 3581.00 and Rs. 3417.30 respectively. The current market cap of the company is Rs. 198171.77 crore.

The promoters holding in the company stood at 15.94 % while Institutions and Non-Institutions held 56.09 % and 12.82 % respectively.

Infosys has reported results for the third quarter ended December 31, 2013.

The company has reported 20.75% rise in its net profit after exceptional item at Rs 2735 crore for the quarter as compared to Rs 2265 crore for the same quarter in the previous year. Total income from operations of the company has increased by 23.92% at Rs 12242 crore for quarter under review as compared to Rs 9879 crore for the quarter ended December 31, 2012.

On the consolidated basis, the group has registered a growth of 21.36% in net profit at Rs 2875 crore as compared to Rs 2369 crore in the same quarter previous year. Total income of the company rose 25.90% to Rs 13757 crore for quarter under review as against Rs 10927 crore in corresponding quarter previous year.

Tata Power’s arm launches solar-based electricity back-up system for domestic consumers

Tata Power, India’s largest integrated power company’s arm - Tata Power Solar, has launched a solar-based electricity back-up system for domestic consumers. The product called ‘Tata Dynamo’ works like a regular inverter that uses solar energy as its primary source of power.

The power pack, a combination of solar PV panels, inverter and battery, will help consumers enjoy uninterrupted power supply for up to eight hours at an affordable cost. The system charges itself while powering appliances and automatically shifts to regular electricity when sunlight is unavailable.

The system has been designed for simple and easy installation and maintenance-free operations and has a life expectancy of 8 to 10 years. The product will be available across the country through Tata Power Solar's over 1,000-dealer network.

VA Tech Wabag bags order worth $40 million in Tanzania

VA Tech Wabag, a leading multinational company specialized in water and waste water management, has bagged it’s first ever order in Tanzania. The project is funded by EXIM Bank of India under the Indian line of credit.

The project is a Design and Build Contract from Dar Es Salaam Water & Sewerage Authority (DAWASA) for a value of $40 million. The scope of the work comprises building of 130 MLD Upper Ruvu Water Treatment Plant in The United Republic of Tanzania.

VA Tech Wabag is a multinational player in the water treatment industry. It offers complete life cycle solutions including conceptualization, design, engineering, procurement, supply, installation, construction and O&M services.

Deccan Gold Mines commences drilling programme at Ganajur

Deccan Gold Mines (DGML) has commenced diamond core drilling in its Ganajur-Karajgi PL block. The Ganajur gold project is a lead project of Deccan Exploration Services (DESPL), a wholly-owned subsidiary of DGML. The Ganajur-Karajgi PL block comprises the highly rated Ganajur Main gold deposit and several satellite prospects such as Ganajur SE, Karajgi Main, Karajgi East, Ganajur South, Ganajur Central and Karajgi Hut prospects hosting gold mineralization in banded iron formations discovered by DESPL.

Previous drilling campaigns in the project, exceeding 6,000 meters of drilling have already demonstrated that the Ganajur-Karajgi PL block contains 308,000 Oz of gold up to a depth of 120 meters under ‘indicated’ category. Subsequent geophysical studies have suggested the possible extension of the Ganajur Main Ore body along strike and depth.

The present program of nearly 4000-5000 meters of diamond core drilling will cover Ganajur Main, its extensions and the surrounding satellite prospects and will include metallurgical and geo-technical drilling. DGML has engaged South West Pinnacle Exploration to undertake this exploratory drilling programme. The purpose of this drilling programme is to find additional resources in Ganajur Main Project and upgrade the Inferred and Indicated category of resources published earlier.

DGML has already entered into a Memorandum of Understanding with the Government of Karnataka to establish a gold mining industry in this project area. Mining Lease application in respect of the Ganajur Main project is under consideration at the Ministry of Mines, New Delhi.

Inflation to come down in coming months: Arvind Mayaram

Economic Affairs Secretary Arvind Mayaram has underscored that inflation is expected to come down in the coming months, but has added that country would need to bridge the demand-supply gap of essential food items to keep prices under check in the long run. However, he admitted that inflation was a problem and though it would marginally ease in the immediate future, to keep the declining momentum in lower single digits for the longer term, the country would have to continue to work towards increasing production and improving the logistics for movement of vegetables.

India’s headline inflation guage, WPI inflation rose to a 14-month high of 7.52%, while the retail inflation, CPI was in double digits at 11.24% in November. The rise in inflation can be blamed mainly to sharp rise in vegetables and protein-rich items.

Economic Affairs Secretary has also pointed that APMC Act had begun to hurt, by restricting movement and dissemination of food and cereals and underscored the need for food distribution to be more open and market oriented. Citing statistics, Mayaram said that spurt in demand for food products driven by improvement in living standards, was adding to inflationary pressure.

Markets to get a cautious start; Infosys numbers eyed

The Indian markets once again declined in last session with majority of traders remaining on sidelines ahead of major domestic and global events. Today, the start is likely to be cautious and all eyes will be on the Infosys Q3 numbers, which will kick start the official earnings season. There is general expectation that the IT bellwether will report a profit growth of over 12% for the quarter and may upgrade its annual revenue outlook by a notch. Infosys had earlier projected an annual revenue growth of 9-10%, well below the industry average of 12-14%. There will be some concern in the market with global rating agency Moody’s cautioning that low growth and high inflation could weaken the country’s debt profile and raise financing cost. There will be some buzz in the market with Reserve Bank of India (RBI) allowing put-call options in foreign inflows with riders. RBI has said that if a company opts for pre-contracted exit price while accepting funds from an overseas investor, under some conditions such contracts will be legal. There will be some buzz in coal and power stocks, as the Supreme Court has asked the government to cancel all pre-2005 coal block allotments to private entities stuck for years over forest or environment clearances at the state level. PSU OMCs too may remain under pressure on buzz that the government is considering partial rollback of market price of diesel sold to bulk users like road transport buses.

The US markets ended mostly flat ahead of the release of the closely watched monthly jobs report and trader seemed reluctant to make any significant moves. The Asian markets have made a mixed start and the Japanese market is still showing weakness, down by around half a percent, while some of the indices are trading higher by over quarter of a percent.

Back home, reversing all their initial gains, key domestic benchmarks witnessed consolidation on Thursday with both the gauges snapping the session on a flat note with negative bias, as investors remained on sidelines ahead of the Infosys’ third quarter performance which will set the tone of earnings season for the Oct-Dec quarter. However, losses remained capped as some support came in from Economic Affairs Secretary Arvind Mayaram’s statement that 2013-14 is likely to end with an economic growth of about 5 percent on the back of spurt in investment activities in the latter half of the fiscal. Firm opening in European markets too helped the Indian equity markets. However, disappointing cues from Asian markets took their toll on Indian markets and dragged the frontline gauges in the red. Nikkei ended the session with a cut of one and a half percent as stronger yen weighed on export-oriented stocks. Back home, sentiments remained dampened on report that domestic passenger car sales declined 4.52% to 1,32,561 units in December, compared with 1,38,835 units sold in the year-ago month. Meanwhile, total sales of commercial vehicles sales were down 25.53% to 46,757 units in December from 62,786 units, while total sale of vehicles across categories registered a decline of 1.21% to 14,31,632 units from 14,49,203 units in December 2012. Additionally, stocks like Gokul Refoils & Solvent, Sanwaria Agro, JVL Agro Industries edged lower in trade on reports of CCEA considering proposal to hike import duty hike on refined edible oil to 10%.  On the flip side, shares of gold finance companies like Muthoot, Manappuram Finance traded jubilantly on the decision of Reserve Bank of India (RBI) to allow finance companies to offer loans of up to 75% of the value of pledged gold as against 60% earlier. Moreover, shares of public sector oil marketing companies viz. BPCL, HPCL and IOC all edged higher as US crude oil futures traded near the lowest level in six weeks after data showed US crude stockpiles increased more than forecast. Finally, the BSE Sensex declined by 16.01 points or 0.08%, to settle at 20713.37, while the CNX Nifty lost 6.25 points or 0.10% to settle at 6,168.35.