Sensex, Nifty end flat

Stock markets in India were stuck in a narrow trading range for the third consecutive trading session as the struggle for specific direction prolonged. Market participants remained cautious ahead to new Federal Reserve Chair Janet Yellen's first testimony before lawmakers.

Meanwhile, exports posted a sluggish 3.79% growth in January 2014 to US$26.75bn compared to the same month last year. Gold & silver imports fell by 77% during the month to US$1.72bn responding to higher import duties and other restrictions imposed by the Government pulling down total imports by 18.07% to US$36.67bn. As a result, trade deficit almost halved to US$9.92bn in January 2014 compared to US$18.87bn in January 2013. 

Car sales in India fell for the fourth straight month in January this year with a decline of 7.59%. domestic car sales stood at 1,60,289 units in January this year compared to 1,73,449 vehicles in the same month of 2013. Compounding the problem for the auto industry was the prolonged slump in the commercial vehicles segment, under which heavy and medium CVs saw 23rd month of consecutive drop in sales. 

Coming back to today’s action, the markets ended with modest gains on Tuesday led by the IT, Telecom, Auto and the Consumer Durables stocks. Even the mid-cap and the small-cap stocks were trading higher. 

On the other hand, Power, Oil and Gas, Realty ann the Pharma stocks were under selling pressure.

Finally, the BSE Sensex closed at 20363 up 29 points while the NSE Nifty ended higher by 9 points to close at 6063 compared with the previous closing.

Dr Reddys Laboratories reports 70% rise in Q3 consolidated net profit

Dr Reddys Laboratories has reported results for the third quarter ended December 31, 2013.

The company has reported 79.77% rise in its net profit at Rs 623.17 crore for the quarter as compared to Rs 346.64 crore for the same quarter in the previous year. Total income of the company has increased by 21.07% at Rs 2646.96 crore for quarter under review as compared to Rs 2186.30 crore for the quarter ended December 31, 2012.

On the consolidated basis, the group has reported 70.22% rise in its net profit at Rs 618.42 crore for the quarter ended December 31, 2013 as compared to Rs 363.31 crore for the same quarter in the previous year. Total income of the group has increased by 22.95% at Rs 3551.49 crore for quarter under review as compared to Rs 2888.47 crore for the quarter ended December 31, 2012.

Thomas Cook Insurance Services buys 86.67 lakh shares of Sterling Holiday Resorts: Report

Thomas Cook Insurance Services has reportedly bought 86.67 lakh shares of Sterling Holiday Resorts (India) through open market route. The shares were purchased on an average price of Rs 97.82 valuing the transaction to Rs 36.50 crore. On the other hand, Bright Star Investments has sold 17 lakh shares in the company for an average price of Rs 98 through open market route.

Sterling Holiday Resorts is in the business of developing and running holiday resorts, hotel, restaurants etc. It has holiday resorts at various cities including Kodaikanal, Goa, Manali, Munnar, Puri, Darjeeling, Lonavala, Gangtok etc.

IOB plans to raise Rs 400 crore by selling shares to LIC

Indian Overseas Bank (IOB), the public sector bank is planning to raise Rs 400 crore by selling shares on preferential basis to Life Insurance Corporation (LIC). The bank is holding an extraordinary general meeting on February 26, 2014 to get the approval of shareholders. The bank will issue and allot up to 8.15 crore of Rs 10 each shares at an issue price of Rs 48.84 per share aggregating to Rs 398.05 crore.

Earlier, the bank had received Rs 1,200 crore from the government as part of capital infusion plan for public sector banks for the current fiscal. After this infusion, Government of India's holding in the bank has increased to 79.01%, from 73.80%.

Indian Overseas Bank has reported 35.56% fall in its net profit at Rs 75.07 crore for third quarter ended December 31, 2013 as compared to Rs 116.50 crore for the same quarter in the previous year. However, total income of the bank has increased by 5.87% at Rs 6190.26 crore for quarter under review as compared to Rs 5846.98 crore for the quarter ended December 31, 2012.

Power Ministry asks for Rs 5,000 cr subsidy to support gas-based power plants

Amid concerns over rising natural gas prices and scarcity of gas for power plants, Power Ministry has sought a subsidy of Rs 5,000 crore over the next two years to support state distribution companies, as they will have to pay double for natural gas prices from April 1.

Earlier, in June’13, the government had approved Rangarajan Committee formula for pricing of all domestically produced gas at an average of international hub rates and cost of imported LNG. Such averaging pricing will raise the effective gas price to $11.43 per million British thermal unit (mmBtu) from $4.2 per mmBtu, leading to cost of electricity generation of around Rs 10.47 per unit. The power ministry has then said that gas based power stations would need to be supported by the government through an appropriate subsidy mechanism. As per ministry proposal, subsidy to state discoms should be the difference in actual tariff and Rs 5/unit for Rs 2014-15 and Rs 5.50 for 2015-16. The subsidy to be borne by government would be about Rs 3,621 crore in 2014-15 and Rs 2,056 crore in 2015-16 in order to support administered price mechanism for gas-based power plants. 

India’s total installed power generation capacity is 225,793 MW, of which 20,000 MW or nearly 8 percent, is gas-based. With the hike in the natural gas price as per the approved formula, the cost of gas-based power will shoot around Rs 10 per unit, making it unattractive for state discoms as such a high cost of electricity cannot be absorbed by consumers. Meanwhile, the present cost of power produced with blended imported coal comes to about Rs 3.45 per unit.

Furthermore, Power Ministry also asked for three years moratorium and waiver of penal interest for projects that are operating on low plant load factor on account of less availability of natural gas in the country. Presently, around 6,000 MW of the total 20,000 MW installed gas based capacity in the country is stranded because of unavailability of natural gas.

India ranks 5th in consumer confidence among emerging market economies

The latest emerging market consumer survey by Credit Suisse has ranked India at fifth position in terms of consumer confidence. The survey, based on nearly 16,000 face-to-face interviews with consumers across nine emerging economies, highlighted that optimism level in India slipped four percentage points over last year. The list was topped by China, while , Indonesia and Mexico remained at third and fourth position.

The survey stated that confidence among emerging market consumers has deteriorated during the last year with around 26 percent of respondents believing that their personal finances would improve over the next three months as compared to 28 percent a year ago. However, the survey found that there are signs of an underlying improvement, as more people now expect inflation to fall and are increasing spending on items. On area wise, the survey highlighted larger improvement in rural areas than urban in most categories with net balance of people expecting income to rise was (+) 6 percent in rural areas versus (-) 15 percent in urban areas.

In terms of spending categories, the  survey highlighted that there has been more growth in discretionary categories items such as cars and smartphones in 2013. Survey expected that the growth in discretionary categories items to remain firm, alongside other items such as watches and branded goods.

RBI raises FII limit in Dabur India to 30%

Reserve Bank of India (RBI) has increased foreign institutional investors' (FIIs) investment limit in Dabur India to 30% of its paid-up capital. RBI has notified that FIIs, through primary market and stock exchanges, can now purchase up to 30% of the paid up capital of Dabur under the Portfolio Investment Scheme (PIS).  Dabur India has passed resolutions at the board of directors' level and a special resolution by the shareholders, agreeing to enhance the limit for the purchase of its equity shares and convertible debentures by FIIs.

Dabur India is one of the largest FMCG Company in India. Building on a legacy of quality and experience of over 125 years, Dabur operates in key consumer products categories like Hair Care, Oral Care, Health Care, Skin Care, Home Care & Foods.

TTML’s total subscribers stood at 10,461,948 in January 2014

Tata Teleservices (Maharashtra) (TTML) has reported the subscriber figures as on January 31, 2014. The company’s total subscribers stood at 10,461,948 of which Wireline contributes 770,463, FWT 745,834 and Mobile 8,945,651 subscribers.

In Mumbai service area, the company’s total subscribers stood at 3,987,842 of which Wireline contributes 519,175, FWT 8,432 and Mobile 3,460,235 subscribers while in Rest of Maharashtra, the company’s total subscribers stood at 6,474,106 of which Wireline contributes 251,288, FWT 737,402 and Mobile 5,485,416 subscribers.

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

ACC inaugurates cement blending unit at Udupi district

ACC has inaugurated a cement blending unit situated at Padubidri in Udupi district. The unit is capable of blending 30,000 tonnes of cement a month. The Udupi plant will cater to the requirements of cement in coastal Karnataka and Kerala.

The clinker from ACC’s plant at Wadi in Gulbarga district is used for cement production at the blending unit in Udupi district. The unit uses fly-ash from the thermal power plant of Udupi Power Corporation in Udupi.

Besides, the company also has two modern satellite cement grinding units located at Thondebhavi near Bengaluru and Kudithini near Bellary which utilize clinker from the Wadi plant.

DSCL enters into a joint Venture with Axiall Corporation

DCM Shriram Consolidated (DSCL), an integrated business entity with presence in the Agri-rural, Chloro-Vinyl sector and Polymer Compounding in India, has entered into a Joint Venture Agreement for its Polymer Compounding business with Axiall Corporation, a North American manufacturer of Chloro-Vinyl, Aromatics and Building Products.

Under the agreement, subject to customary closing conditions and regulatory approval, Axiall will invest Rs. 34.65 crore in SVP (a 100% subsidiary of DSCL) to acquire a 50% stake in SVP. Consequently, SVP will have access to Axiall’s Polymer Compounding Technology and market knowledge. This arrangement is intended to enable SVP to launch latest-generation Polymer Compounds in India, offering more cost-effective Polymer Solutions for different applications to Indian customers.

DCM Shriram Consolidated is an integrated business entity, with a presence across the entire Agri-rural value chain and Chloro-Vinyl industry. The company is one of the leading players in Polymer Compounding in India.

Jaiprakash Associates reports net loss of Rs 88.71 crore in Q3

Jaiprakash Associates has reported results for third quarter ended December 31, 2013.

The company has reported a net loss of Rs 88.71 crore for the quarter as compared to net profit of Rs 110.93 crore for the same quarter in the previous year. Total income of the company has decreased by 9.50% at Rs 3181.81 crore for quarter under review as compared to Rs 3516.02 crore for the quarter ended December 31, 2012.

Jaiprakash Associates, in last year, divested its cement units in Gujarat and Andhra Pradesh into a separate company, Jaypee Cement, in order to monetize a part of its investments to help the parent company reduce its debt. Jaypee group’s cement division currently operates modern, computerized process control cement plants with an aggregate capacity of 21.3 MTPA.

NMDC reports 21% jump in Q3 net profit

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

The company has reported 21.23% rise in its net profit at Rs 1567.30 crore for the quarter, as compared to Rs 1292.80 crore for the same quarter in the previous year. Total income of the company increased by 27.92% at Rs 3330.87 crore for quarter under review as compared to Rs 2603.95 crore for the quarter ended December 31, 2012.

NMDC is a state-controlled mineral producer of the Government of India. It is fully owned by the Government of India and is under administrative control of the Ministry of Steel.

M&M ties-up with Canara Bank to provide loan facility to its customers

Mahindra & Mahindra (M&M) has entered into a tie-up with Canara Bank to provide loan facility to its customers. The company has entered into a preferred financier tie-up with Canara Bank. Through this tie-up the auto major’s customers can avail a car loan from any of the 4,600 branches of the bank.

Besides, this tie-up will enable both the company and the bank to leverage on the inherent strengths of each other’s vast pan-India network of 4,600 branches and 250 dealers, respectively.

Mahindra & Mahindra (M&M) is the flagship company of the Mahindra Group, a multinational conglomerate based in Mumbai, India. Amongst the various business interests of its parent group, the company is mainly involved in the automobile manufacturing. It is one of the leading auto companies of India.

Bad loans of NBFC to peak out by March 2015: India Ratings

Credit assessor, India Ratings and Research, in its report has underscored that bad loan across major non-banking financial companies (NBFCs) would peak by March 2015, despite the ease in asset quality pressures by second half of fiscal year 2015. According to the rating agency, the gross non-performing assets (NPAs) of major Indian NBFCs, will hit 4.2% of their total assets by March 2015, compared with 2.5% in March 2013. Nevertheless, the ratings agency has kept the outlook of NBFC sector stable in 2014.

The agency expects the revival of certain infrastructure projects (cleared by the cabinet committee in recent months), pick-up in industrial growth and corporate capex investments to benefit most of the commercial assets financed by the NBFCs, from second quarter of FY15 onwards. It, however noted that NBFC’s new business growth would remain subdued till third quarter of FY15, as it would require a longer period of sustained growth in the index of industrial production.

However, it also pointed that in a scenario of continued weak industrial growth and infrastructure projects remaining stalled, the asset quality pressures could intensify and adversely impact the NBFCs with large unseasoned portfolios.

It further, highlighted that NBFCs’ defenses, in the form of solid pre-provision operating profit (PPOP) and capital buffers offer a strong cushion against India Ratings’ stress tests on scenarios of spike in credit costs and elevated funding costs. Recently, in a report, India Ratings highlighted that stressed loans across Indian banks are likely to increase to 14% of total loans by March 2015 from 9 % in March 2013.

Tata Power successfully commissions 10kW micro-hydro project

Tata Power, India’s largest integrated power company has successfully commissioned a 10kW micro-hydro project. The low-head, micro-hydro turbine installed in the tailrace of the 150MW Bhira hydro power station in Maharashtra utilizes the existing flow rate available to generate sufficiently clean energy to manage its auxiliary loads. The micro unit was successfully synchronized to the grid.

The 150MW hydro station was started at Bhira about 90 years ago. The successful installation and commissioning of the 10kW, micro-hydro turbine is a new breakthrough for the Bhira project. The micro turbine is connected to the 415V auxiliary network.

Besides, the invertors and other associated equipment required for synchronizing the unit to the auxiliary grid was jointly developed by the Clean Technology Group and Tata Power engineers. Tata Power will now be in a position to add this facility at additional locations.