Jan WPI inflation eases to eight-month low of 5.05% on lower food inflation

In other good news, after Retail inflation numbers India's main inflation gauge, based on monthly WPI, too eased to eight month low at 5.05% in January as compared to 6.16% in December and 7.31% during the corresponding month of the previous. The build up inflation rate in the financial year, so far, stood at 5.17% compared to a build up rate of 5.78% in the corresponding period of the previous year. However, the reading for November WPI inflation was unchanged at 7.52%.

The decline in headline inflation figure was on account of ease in food articles, which declined by 2.7 percent to 233.6 (provisional) from 240.1 (provisional) for the previous month that dragged Primary article index, which occupies 20.12% weight in the overall headline index, lower by 1.9 percent to 238.9 (provisional) from 243.6 (provisional) for the previous month. Meanwhile, the index for ‘Non-Food Articles’  group rose by 0.1 percent to 216.0 (provisional) from 215.8 (provisional) for the previous month.

Further, Fuel & Power, having weight of 14.91%, too rose by 0.7 percent to 212.8 (provisional) from 211.3 (provisional) for the previous month due to higher price of LPG (5%), aviation turbine fuel and petrol (2% each) and furnace oil, kerosene, high speed diesel and bitumen (1% each).

However, the index of Manufactured Products, which occupies 64.97% of weight in the overall index, rose by 0.5 percent to 152.6 (provisional) from 151.9 (provisional) for the previous month, which took the inflation of manufacture products at three months high level.

However, in a sign of worry, Core WPI, edged higher at 3% as compared to 2.8% (M-o-M basis). Nevertheless, eight months low January WPI, besides bringing some relief to RBI would bring some cheer to Congress party-led ruling alliance, which faces an uphill battle in a general election due by May. Notably, the government in its Mid-Year review terming high inflation as biggest risk to India’s growth outlook, pressed the need for bringing down the headline inflation below 6%.

Thus, the latest reading makes a case for RBI maintaining a status quo stance in its upcoming monetary policy review on April 1, 2014. Persistently high inflation prompted RBI Governor Raghuram Rajan to raise interest rates last month, the third hike since September, even though economic growth has been stuck around a decade-low of 4.5 percent for four quarters.

Mahindra & Mahindra reports 12% jump in Q3 net profit

Mahindra & Mahindra has reported results for third quarter ended December 31, 2013. The company has reported 11.70% rise in its net profit at Rs 934.06 crore for the quarter, as compared to Rs 836.19 crore for the same quarter in the previous year. However, total income of the company decreased by 1.83% at Rs 10650.32 crore for quarter under review as compared to Rs 10848.52 crore for the quarter ended December 31, 2012. Mahindra & Mahindra 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.

SBI plans merger of 5 associate banks in 18 months

Country's largest lender State Bank of India (SBI) plans consolidation of remaining five associate banks with itself in the next 12-18 months. "The bank (SBI) envisages consolidation of all subsidiary banks with SBI within a period of 12 to 18 months," Finance Ministry informed the Standing Committee on Finance. This was in response to a query on the stance of the government on merging the subsidiaries with SBI raised by the Parliamentary panel headed by former Finance Minister Yashwant Sinha. In the submission to the panel, SBI Chairman O P Bhatt said "there are five banks remaining. We have representations from various associations, leaders etc from these five banks which want these banks also to be merged with the State Bank of India simply because it is primarily good for the employees in multiple ways".

SBI stock price
On February 14, 2014, at 12:50 hrs State Bank of India was quoting at Rs 1500.70, up Rs 1.05, or 0.07 percent. The 52-week high of the share was Rs 2469.25 and the 52-week low was Rs 1452.90. The company's trailing 12-month (TTM) EPS was at Rs 164.91 per share as per the quarter ended September 2013. The stock's price-to-earnings (P/E) ratio was 9.1. The latest book value of the company is Rs 1325.34 per share. At current value, the price-to-book value of the company is 1.13.

Bajaj Electricals Q3 profit jumps 72% Net sales increased to Rs 1,032 crore in the quarter under review

Bajaj Electricals reported a 71.48% rise in its net profit at Rs 20.03 crore for the third quarter ended December 31, 2013.

The company had reported a net profit of Rs 11.68 crore in the same period of 2012-13, Bajaj Electricals said in a filing to the BSE today.

Net sales increased to Rs 1,032.42 crore in the quarter under review as against Rs 872.12 crore in the same period last year.

Revenues from the lighting segment stood at Rs 247.19 crore against Rs 221.57 crore, while revenues from the consumer durables segment increased to Rs 519.19 crore from Rs 504.63 crore.

Revenues from the engineering projects segment stood at Rs 266.67 crore during the third quarter against Rs 146.88 crore in the same period a year ago.

Shares of Bajaj Electricals were trading at Rs 221.20 per scrip during the afternoon trade on the BSE, up 5.64% from the previous close.

Rupee trading strong at 62.32 Vs dollar

The rupee was trading strong by 12 paise at 62.32 against the dollar at 11.58 a.m. local time.

The rupee gained 16 paise to 62.28 against the dollar in the opening trade against the previous close of 62.44 on the back of weakness in the dollar index.

On the domestic front, markets would be keenly awaiting the WPI data which is scheduled to be released today.

According to Abhishek Goenka, Founder and CEO of India Forex Advisors, the overall trend in rupee is bearish where 62.14 is the strong support level for the USDINR pair.

Call rates, G-secs

The inter-bank call money rate, the interest rate at which banks borrow money from each other to overcome short-term liquidity mismatches, opened flat against the previous close of 9.10 per cent.

Yield on the benchmark 8.83 per cent Government security, maturing in 2023,softened to 8.84 per cent from 8.86 per cent. Bond prices rose to ₹99.85 from the previous close of ₹99.75.

Infosys chief’s daughter to invest ₹150 crore to expand hotel venture

 

Infosys CEO SD Shibulal’s daughter Shruti Manchanda, who turned an entrepreneur two years ago, is set to expand her hospitality venture.

Manchanda, who owns slightly less than one per cent stake in Infosys, which according to the current market price is worth ₹1,350 crore, plans to invest up to ₹150 crore for setting up a hotel in Kerala and a resort in Tamil Nadu.

A Columbia Business School graduate, she is currently based out of New York and is also actively involved with the management of the family’s assets through Innovations Investment Management, the single family office (SFO), which takes care of all Shibulal’s personal wealth.

Innovations Investment was formed in 2005-06 to serve as an SFO for Shibulal and his family. Over the last eight years, the company handled all the global tax and compliance issues for the family members. In terms of investments, almost 100 per cent of the assets under management were cash or cash equivalents.

Since then, it has developed a portfolio, predominantly comprising real estate assets. The company has also created an investment platform for the family in Germany. Tamara Real Estate Holding & Development is the hospitality venture of Innovations. She is also a director on the board of Tamara.

The total shareholding of Shibulal and his family in Infosys is about 2.2 per cent, which amounts to ₹4,507 crore as per today’s stock price.

N Senthil Kumar, Director and CEO ofTamara , told Business Line the company will develop properties in Thiruvananthapuram in Kerala and Kodaikanal in Tamil Nadu, apart from expanding the existing resort in Coorg, Karnataka.

The Thiruvanathapuram property will be developed into a 108-room hotel. The Kodaikanal property will be developed into a 54-key resort. Tamara has properties in White Field near Bangalore, another one near Kochi and two more in Guruvayur and Madurai.

M&M Oct-Dec Qtr PAT may rise 5% at Rs 879.6cr: ICICIdirect

ICICIdirect.com has come out with its October-December quarter earnings estimates for the automobile sector. The brokerage house expects Mahindra and Mahindra   (M&M) to report a 11.1 percent degrowth quarter-on-quarter (up 5.2 percent YoY) in net profit at Rs 879.6 crore. Revenue of Mahindra and Mahindra is expected to increase by 18.2 percent Q-o-Q (down 2.1 percent Y-o-Y) to Rs 10550.6 crore, according to ICICIdirect.com. Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 12.9 percent Q-o-Q (up 6.8 percent Y-o-Y) to Rs 1293.1 crore. ICICIdirect.com on Mahindra and Mahindra: In this quarter, M&M's automotive segment witnessed contraction in volumes on a YoY basis. However, the festive season saw a QoQ increase of 9 percent to 129,400 units. However, the tractor segment has continued with its strong momentum and saw 32 percent QoQ growth to 78,400 units. Cost pressure and increase in discouting in automotive segment is likely to lead to a decline in margins by 50 bps QoQ to 12.3 percent. Top line and PAT is expected at Rs 10,500 crore and Rs 880 crore, respectively.

Natco Pharma’s Q3 net profit jumps 32% at ₹30 crore

Natco Pharma Ltd’s net profit increased 32 per cent at ₹30 crore in the third quarter of the current financial year ended December 31, 2013 compared with ₹22.6 crore in the corresponding quarter of the previous year.

The total revenue of the Hyderabad-based company increased 14.5 per cent at ₹203 crore (₹177 crore). The growth was driven by a significant growth in formulations, among others. The earnings per share stood at ₹9.34 as against ₹7.20 in the year-ago period.

Natco’s scrip lost 3.14 per cent to end at ₹743.80 on the Bombay Stock Exchange on Thursday.

Asian markets trade mostly higher in early deals on Friday Feb-14-2014

Most of the Asian equity benchmarks are trading in the green in the early deals on Friday tailing the gains in the US markets, though there was concern about the Federal Reserve’s stimulus cuts, a slowdown in China and volatility in developing markets. Japanese stock market is trading weak following the yen's rise against the US dollar after the announcement on implementation of Japan’s stimulus program. Among other markets in the Asia-Pacific region, Hong Kong, Shanghai, Indonesia, South Korea and Taiwan are trading notably higher. Malaysia is up marginally, while Singapore is trading slightly weak. Shanghai Composite added 10.51 points or 0.50% to 2,108.91,  Hang Seng increased 88.24 points or 0.40% to 22,253.77, Jakarta Composite surged 11.49 points or 0.26% to 4,503.15, KLSE Composite gained 1.83 points or 0.10% to 1,818.98, Seoul Composite rose 15.23 points or 0.79% to 1,942.19 and Taiwan Weighted was up by 76.56 points or 0.90% to 8,544.26. On the flip side, Nikkei 225 slumped by 254.83 points or 1.75% to 14,279.91 and Straits Times was down by 3.89 points or 0.13% to 3,036.01.

Bharti Airtel surges 2% on BSE

 

Bharti Airtel was the top gainer on the BSE in morning trade on Friday. At 11 a.m. it was quoting at Rs. 308.75 as against Rs. 302.60 at close on Thursday. This represented a gain of 2.03 per cent.

Tata Motors resumed its firm run on the bourses to quote at Rs. 381.50. This represented a gain of 1.48 per cent on its overnight close of Rs. 375.95.

GAIL (India) was trading at Rs. 356 as against Rs. 351.10 at close yesterday. This represented a gain of 1.40 per cent.

TCS held gains of 1.28 per cent to trade at Rs. 2,161.10 as against its overnight close of Rs.2,133.75.

NTPC powered up 1.15 per cent to quote at Rs. 131.65 as against Rs. 130.15 at close on Thursday.

High inflation rate - biggest risk to growth outlook: Economic Review Feb-14-2014

Presenting not so rosy picture of the economy and also echoing RBI’s views, the government in its ‘Mid-Year Economic Review’ tabled in the Rajya Sabha on Thursday acknowledged that high inflation rate was the biggest risk to growth outlook and pressed the need for bringing down the headline wholesale price inflation (WPI) below 6%.  Besides this, it made note of limited ability of RBI had to extend monetary policy support to growth revival in the background of high inflation. On the positive side, the report noted that despite cuts in government spending, private consumption expenditure and gross fixed capital formation had increased, indicating that the structural reforms undertaken by the government had started to bear fruits. The document highlighted that a decisive pick-up in economic activity could be gradually expected in the Indian economy over the next few quarters. As per the review, the Indian economy grew by 4.6% in the first half of 2013-14 (Apr-Mar), compared with 5.3% in the same period of the previous fiscal. Further, the review pegged India’s 2013-14 growth at 5.0%, in line with Central Statistics Office’s (CSO) advance estimate released last month. However, it also said that it may take some more time for the economy to reach its higher growth potential.