IDFC Gets RBI Nod for Starting Banking Operation, Shares Surge 7%

 Infrastructure financing firm IDFC Ltd on Friday said the Reserve Bank of India (RBI) has granted banking licence to IDFC Bank for undertaking banking business in the country.

"The RBI on July 23, 2015 has granted Banking Licence to IDFC Bank Limited for undertaking banking business in India under Section 22(1) of the Banking Regulation Act, 1949," IDFC said in a stock exchange filing.

IDFC and Bandhan Financial Services Pvt Ltd emerged successful out of 25 contenders for new bank licences issued by the Reserve Bank of India (RBI) in April last year.

Bandhan Financial got RBI approval last month.

IDFC Bank plans to start operation from October 1 with an initial loan book of around Rs 55,000 crore. The bank proposes to start operations with 20 branches.

It has almost completed the process of demerger of financial undertaking into IDFC Bank.

The demerger was in accordance with RBI conditions which require IDFC to transfer the relevant business activities to the proposed IDFC Bank.

All new banks are to be set up through a non-operative financial holding company, according to the guidelines. IDFC Bank was established as a public limited company to carry out business of banking pursuant to approval granted by the Reserve Bank in April 2014.

Shares of IDFC rose as much as 6.8 per cent on Friday as compared to a flat Nifty.

ABG Shipyard rallies after block deal

The stock has rallied over 7 percent on the BSE.

ABG Shipyard has zoomed to a high of Rs. 211 - up 7.1 percent following a huge block deal.

The BSE counter has witnessed a huge block deal of around 6.5 million shares at around Rs. 198.

The stock is now up 5.5 percent at Rs. 208. The counter has seen heavy volume of around 6.9 million shares as against the two-week daily average volume of around 53,000 shares on the BSE.

Meanwhile, the Sensex has slipped 78 points to 28,291.

Tata Motors expected to do better than Maruti in near future

In comparison, Tata Motors has corrected by more than 20% in same period. And this is a lot to do with the issues faced by the company in Europe and then in China.

Maruti has been making news recently for things other than its vehicles too. And it is which no other Indian subsidiary of a MNC has ever done before. The Indian entity has surpassed the market cap of its parent Suzuki in Japan. This is a big achievement for an Indian company. But in past year, Maruti has delivered a return of stunning 65% and is looking expensive in the available one in automotive packs. 
 
In comparison, Tata Motors has corrected by more than 20% in same period. And this is a lot to do with the issues faced by the company in Europe and then in China. When compared on valuations front, Tata Motors seems to be a no-brainer for a lot of investors. And considering that Maruti is already being referred to as an expensive pick in automobile industry, chances of money moving to Tata Motors seem higher than that to Maruti. This in turn will have a positive impact on the stock, which is expected to do well in next year and a half.
 
Even company’s management is bullish that Tata Motors will be able to deliver double-digit growths when overall industry is expected to grow at 6% to 8%. The company is also renewing its focus on the domestic market as it expect the same to pick and act as a counter balance to the issues faced in European markets.

Some experts are also of the view that market is getting over pessimistic about the China issues and the stock might not go much lower than the current levels. And with a slew of launches lined up where company is also set to launch entry level Jaguar in Asian markets, the near term future seems bright for Tata Motors. Another thing to note is that unlike other luxury brands like Audi, etc., company’s Jaguar brand has still got a lot of potential to grow.

For the retail investors, it should be noted that automobile sector is cyclical in nature and consequently, the stocks can go down steeply even from the levels which look very cheap. But having said that, it seems that market has already priced in all the possible negatives in the stock price, even before the same has happened in reality. So risk-reward ratio seems to be more in favor of reward currently. But this will not happen immediately. The investors will have to have the appetite of further short-term shocks and have a lot of patience, if they want to make decent returns on this counter.

Biocon Q1 net profit up 23% at Rs. 126 crore

Total Income has increased from Rs. 7,419.50 million for the quarter ended June 30, 2014 to Rs. 8,565.10 million for the quarter ended June 30, 2015.

Biocon Ltd, Asia's premier biopharmaceuticals company, announced that it has delivered a strong consolidated financial performance for Q1 FY16.

The company has posted a net profit after taxes and Minority Interest of Rs. 1,262.40 million for the quarter ended June 30, 2015 as compared to Rs. 1,029.10 million for the quarter ended June 30, 2014. Total Income has increased from Rs. 7,419.50 million for the quarter ended June 30, 2014 to Rs. 8,565.10 million for the quarter ended June 30, 2015.

Commenting on the quarterly performance and highlights, Chairperson and Managing Director, Kiran Mazumdar-Shaw stated, "The strong performance this quarter reflects the overall growth of our business backed by a combination of product sales and monetization of RnD assets through licensing. Our Biosimilars strategy is playing out well with five programs in phase 3 clinical development. During the quarter we successfully licensed biosimilar Trastuzumab in key emerging markets. Our Insulins business was boosted with the launch of insulin Glargine in Mexico and Colombia. Our focus on key brands in Branded Formulations has begun to translate into a better quality of earnings."

RIL to announce Q1 results today

Reliance Industries Ltd has announced that a meeting of the Board of Directors of the Company will be held on July 24, 2015, inter alia, to consider and approve the standalone and consolidated unaudited financial results of the Company for the quarter ended June 30, 2015.

Reliance Industries Ltd has announced that a meeting of the Board of Directors of the Company will be held on July 24, 2015, inter alia, to consider and approve the standalone and consolidated unaudited financial results of the Company for the quarter ended June 30, 2015.

Pursuant to this, the Company has decided that the close period (i.e. closure of trading window) for the Insiders covered under the Company’s “Code to Regulate, Monitor and Report Trading by Insiders" would commence from 6:00 p.m. on July 16, 2015 and end 48 hours after the results are made public on July 24, 2015.

We expect Reliance Industries to report a GRM of US$9.4/bbl as compared to US$10.1/bbl reported in Q4 FY15. However, petrochemical spreads have improved during the quarter.

Crude oil production from MA-1 field and gas production from KG-D6 field are likely to see moderate declines on a qoq basis.

25 Stocks in focus today

Check out the companies which will be in focus during trade today based on recent and latest news developments.

Biocon Ltd: The pharma company has announced a net profit after taxes and Minority Interest of Rs. 1,262.40 million for the quarter ended June 30, 2015 as compared to Rs. 1,029.10 million for the quarter ended June 30, 2014.

Rallis India Ltd: The company has posted a net profit after taxes and minority interest of Rs. 330.90 million for the quarter ended June 30, 2015 as compared to Rs. 369.80 million for the quarter ended June 30, 2014.

Wipro Ltd: The net profit for the quarter stood at Rs. 2190 crore. The IT Services Rs Revenue was at Rs. 10,229 Crore.

Wockhardt Ltd: The pharma company  has announced that inspection of the Company's manufacturing unit at 57, Kunjhal Barotiwala, Nalagarh, District Solan, Himachal Pradesh by US FDA has since been completed.

Lupin: The pharma company has announced a net profit after taxes and Minority Interest of Rs. 5,250.20 million for the quarter ended June 30, 2015 as compared to Rs. 6,247.40 million for the quarter ended June 30, 2014. Total Income has decreased from Rs. 33,697.30 million for the quarter ended June 30, 2014 to Rs. 32,258.10 million for the quarter ended June 30, 2015. Moreover, the pharma major company  has entered into a definitive agreement to acquire privately held GAVIS Pharmaceuticals LLC and Novel Laboratories Inc.

Alstom T&D India: The Company has posted a net profit of Rs. 195.8 million for the quarter ended June 30, 2015 as compared to Rs. 284.4 million for the quarter ended June 30, 2014. Total Income has increased from Rs. 6,734.6 million for the quarter ended June 30, 2014 to Rs. 8,117.6 million for the quarter ended June 30, 2015.

Gail (India) Ltd: The company has reported a net profit of Rs. 4241.40 mn for the quarter ended June 30, 2015 as compared to Rs. 6214.40 million for the quarter ended June 30, 2014.

Bharti Airtel: Issues of call drop is rising in the telecom industry. In Telecom Regulatory Authority of India (Trai), Bharti Aitrel is on the lead in regards to complaints for call drop, compared to the other telecom service providers.

Sterling Holidays:  The  net profit for Q1 at Rs 0.7 Crore. The Consolidated Total Income for the quarter stands at Rs 55.4 Crore.

Nocil Ltd :  The company booked a net profit of Rs. 16.7 crore for the quarter ended June 2015, as against Rs. 10.1 crore in a year ago period. During the period under review, the company's Total Income stood at Rs. 186 crore Vs Rs. 176.7 crore for the above mentioned period.

Andhra Petro : The company reported net loss for the quarter was at Rs.1.5 crore. The Total Income for the quarter was at Rs.105.5 Crore.

Tata Consultancy Services: The IT company  announced that it is establishing a research effort on Intelligent Systems at IIIT Hyderabad named after Shri FC Kohli.

Maruti Suzuki India: The company has launched a new initiative called Nexa. These are retail outlets, which will sell premium products, as Maruti looks to further cement its position as the largest carmaker in India.

L&T Finance Holdings Ltd: The company has posted results for the first quarter ended 30th June, 2015. The cons net profit for the quarter was at Rs. 192.5 Crore. The Consolidated Income from Ops for Q1 stands at Rs.1,717.6 crore.

Dewan Housing Finance Corporation Ltd: The company posted a net profit after tax of Rs. 1732.827 mn for the quarter ended June 30, 2015 as compared to Rs. 1622.818 min for the quarter ended June 30, 2014.

Persistent Systems : The company has  signed an agreement with Intel Overseas Funding Corporation to acquire the stock of Aepona Holdings Limited, a Republic of Ireland corporation.

SpiceJet: The country’s #2 low-cost carrier and most innovative airline announced the launch of ‘Book Now, Pay Later’, a convenient Equated Monthly Installment (EMI) scheme.

Somany Ceramics Ltd: Net Sales increased by 18.6% to Rs. 391.46 crores in the Q1’FY16 as compared to Rs. 330.17 crores in the Q1’FY15.  PAT stood at Rs. 10.49 crores during the quarter.

Indian Bank: The bank  has  posted a net profit of Rs. 2152.776 million for the quarter ended June 30, 2015 as compared to Rs. 2071.597 mn for the quarter ended June 30, 2014.

United Breweries Ltd: The company has posted a net profit of Rs. 1,228.10 million for the quarter ended June 30, 2015 as compared to Rs. 1,288.40 million for the quarter ended June 30, 2014. Total Income has increased from Rs. 14,569.40 million for the quarter ended June 30, 2014 to Rs. 15,018.60 million for the quarter ended June 30, 2015.

Sterlite Technologies: The company reported in standalone Q1 net profit to Rs. 20.3 crore as compared to Rs. 39.1 crore on quarter-on-quarter basis. During the period under review, the company's Total Income stood at Rs. 975 crore Vs Rs. 979 crore (QoQ).

Lakshmi Vilas Bank Ltd: The bank booked a net profit of Rs. 40.3 crore. Total interest income for the quarter ended June 2015 grew by 15.78%, to Rs. 614.09 Crs against Rs. 530.39 Crs in the corresponding period of previous financial year.

Bajaj Auto Ltd: The company has posted a net profit after tax of Rs. 10148.00 million for the quarter ended June 30, 2015 as compared to Rs. 7399.80 million for the quarter ended June 30, 2014, thereby increasing by nearly 37%.

Wipro Sees Stronger Quarters Ahead on Calmer Oil Prices

 Wipro Ltd, India's third biggest software services exporter, expects less volatile global oil prices to revive spending on IT outsourcing by its energy and utility clients.

Wipro, also listed in the United States, makes about 18 per cent of its sales from the energy sector, compared to about 5 per cent at bigger rivals Tata Consultancy Services (TCS) and Infosys.

A drop in crude prices had made many energy sector clients cut back on spending, prompting Wipro to give a tepid forecast in the past quarter. Volatility has calmed this week after the price of Brent fell about 12 per cent in July.

"We are not expecting to see a further decline in energy in the second quarter," chief executive T K Kurien told reporters at a conference. The company's energy business sales had dropped about a third over the past year.

For the quarter ended June, Wipro's fiscal first quarter, the company posted a net profit of Rs 2,190 crore ($343.8 million), broadly in line with forecasts and posting a growth of 4 per cent over the corresponding period last year.

Analysts, on an average, expected a profit of Rs 2,183 crore, according to Thomson Reuters data.

The company posted a 10 per cent rise in quarterly revenue, but that was lower than the 12.4 per cent rise rival Infosys recorded in the comparable quarter.

Wipro, which makes about three quarters of its sales in the United States and Europe, said its IT services revenue would be in the range of $1.82-$1.86 billion in the current quarter, a growth of up to 3.9 per cent over the preceding quarter.

Dipen Shah, head of private client group research at Kotak Securities, said the September quarter guidance was "slightly ahead" of expectations. He said the management's comments about energy sector sales having bottomed out were also encouraging.

During the quarter ended June, IT services revenues came in at $1.79 billion, rising 1.1 per cent from the January-March period and hitting the top end of its forecast.

Government Proposes to Strip RBI Chief of Veto Power on Interest Rate

In a move that may dilute powers of the chief of Reserve Bank of India (RBI), the government has proposed taking away his authority to veto the interest rate decision of the central bank's monetary policy committee.

At present, the RBI governor consults a Technical Advisory Committee, but does not necessarily go by the majority opinion while deciding on the monetary policy stance.

The revised draft of Indian Financial Code (IFC), released on Thursday by the Finance Ministry, has also proposed that an all-powerful monetary policy committee would have four representatives of the government and only three from the central bank, including the 'RBI Chairperson' - thus giving full control to the government on policy rate.

The draft talks of 'RBI Chairperson' and not 'RBI Governor'. RBI is headed by a governor, at present.

The IFC, which is conceived as an overarching legislation for the financial sector, proposes that the monetary policy committee will be entrusted with the task of deciding the key policy rate and chasing the annual retail inflation target to be decided by the government in consultation with the RBI.

"Inflation target for each financial year will be determined in terms of the Consumer Price Index (CPI) by the Central Government in consultation with the Reserve Bank every three years," said the draft, on which the Finance Ministry has invited comments till August 8.

The first draft, submitted in March 2013, too had talked about the committee and majority vote, but gave powers to RBI chairperson to supersede the decision of the panel.

"In exceptional and unusual circumstances, if the RBI Chairperson disagrees with a decision taken at a meeting of the Monetary Policy Committee, the RBI Chairperson will have the right to supersede such decision," it had said. This provision has been dropped in the revised draft.        

Sensex Set to Open Lower Amid Weak Global Cues

9:01 a.m. Rupee opens lower at 63.97/dollar against Thursday's close of 63.76

8:54 a.m. Sensex set to open lower amid weak global cues. SGX CNX NIFTY is down nearly 0.25 per cent at 8,583

8:52 a.m. Asian shares dropped sharply on Friday after a survey of Chinese manufacturing activity was weaker than expected, while U.S. jobs data underpinned the dollar as it bolstered bets that the U.S. Federal Reserve is on track to hike interest rates later this year.

The flash Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) dropped to 48.2, below economists' estimate for a reading of 49.7 and the lowest reading since April last year. It was the fifth straight month below 50, the level which separates contraction from expansion.

MSCI's broadest index of Asia-Pacific shares outside Japan was down about 0.8 percent, on course for a weekly loss of more than 2 percent.

8:50 a.m. China's factory sector contracted by the most in 15 months in July as shrinking orders depressed output, a preliminary private survey showed on Friday, a worse-than-expected result that should reinforce bets the struggling Chinese economy will get more stimulus.

The flash Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) dropped to 48.2, the lowest reading since April last year and a fifth straight month below 50, the level which separates contraction from expansion.

Economists polled by Reuters had forecast a reading of 49.7, slightly stronger than June's final reading of 49.4.