Monday, 19 October 2015

Stronger than expected China GDP Growth: India Ratings

Foreign portfolio investors may take note of weak corporate earnings, as disinflation worries plague India Inc.’s revenue and profit.

Rupee to Trade between 65.5-65.1/USD: India Ratings and Research (Ind-Ra) expects the Indian rupee (INR) to trade sideways this week, in the 64.50-65.1/USD range. Foreign portfolio investors may take note of weak corporate earnings, as disinflation worries plague India Inc.’s revenue and profit. There are nascent signs of recovery in overall domestic growth as well, despite weakness in exports and investment demand.

The risks will be balanced by robust foreign portfolio investments (FPIs) in bond markets (USD2.1bn in the month till 15 October 2015) on high Indian real yields. Further, Asian currencies should trade firm on the lack of negative triggers, while the US dollar (USD) may strengthen against the majors such as the euro and Japanese yen on relative growth and inflation dynamics.

Global Calmness to Keep Indian Markets Range Bound: Ind-Ra opines stronger than expected China GDP growth and expectations of Fed rates on hold for a while will lead to benign global sentiments. We are entering into a phase of consolidation in global currency markets ahead of European Central Bank’s monetary policy decision this week and the US Federal Reserve Meeting later during the month.

China’s growth downturn has been arrested for now (GDP for 3Q15 at 6.9% vs expected 6.8%) as the increase in fast paced services, infrastructure spends and consumption countered the decline in manufacturing and exports.

Separately, US data remains mixed. Although consumer confidence and core inflation (particularly services inflation) indicate that the US economy is chugging along, the expectations of Fed normalising rates have been pushed to 2016 on a poor jobs report as well as on the lack of trade, industrial and retail sales data along with the complete absence of inflation pressures elsewhere within the US economy.

Bullish Steepening of Bond Curve to Continue: Amid ongoing benign global developments and heavy FPI interest in India, the bond market is likely to consolidate hereon, with yields likely to soften.

Interest on the front end of yield curve has been strong, resulting in the bullish steepening of the curve (5x10 spread down 11bp vs 14bp fortnight ago). Over the week, the interest of foreign portfolio investors in G-sec was particularly noted in short-end high-yielding securities (Figure 1). We expect this momentum to continue and yields may soften in range of 2bp-5bp through the week.

FPI to Benefit G-sec Market: With the state development loan (SDL) limit fully utilised, FPIs may pour into the G-sec market. We expect the market to remain well bid with limit worth INR30.42bn still available in G-secs.

On the states’ front, Ind-Ra observes that foreign portfolio investors have been differentiating between credits, and selectively investing in SDLs. The biggest beneficiaries of the fresh flows have been Maharashtra, Tamil Nadu and Gujarat. These SDLs have broadly traded at spread of 35bp-40bp over the benchmark 10-year G-sec.

NIIT Tech gallops 14% on strong Q2 results

The company has posted a net profit of Rs. 411.90 million for the quarter ended September 30, 2015 as compared to Rs. 581.50 million for the quarter ended September 30, 2014.

NIIT
NIIT Tech galloped 14% at Rs.561.15 on BSE today. The company has posted a net profit of Rs. 411.90 million for the quarter ended September 30, 2015 as compared to Rs. 581.50 million for the quarter ended September 30, 2014. Total Income has increased from Rs. 3204.50 million for the quarter ended September 30, 2014 to Rs. 3754.30 million for the quarter ended September 30, 2015.

The scrip opened at Rs. 493.05 and touched a high and low of Rs. 572.1 and Rs. 480 respectively. A total of 2438855(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 3012.95 crore.

The BSE group 'A' stock of face value Rs. 10 touched a 52 week high of Rs. 539 on 13-Aug-2015 and a 52 week low of Rs. 332 on 17-Dec-2014. Last one week high and low of the scrip stood at Rs. 507.25 and Rs. 443.2 respectively.

The promoters holding in the company stood at 30.84 % while Institutions and Non-Institutions held 53.18 % and 15.98 % respectively.

The stock traded below its 50 DMA.

Need to make our tax regime more investor friendly: Raghuram Rajan

He also said that there should be greater coordination between leading central banks of the world, which would result in a more effective utilisation of monetary policy tools.

Raghuram Rajan
Reserve Bank of India Governor Raghuram Rajan has thrown his weight behind simplifying of taxation in the country, so that there is a conducive environment for the FDIs to invest.

He also said that there should be greater coordination between leading central banks of the world, which would result in a more effective utilisation of monetary policy tools.

"We need to make our tax regime more investor friendly." said Rajan at a seminar organised by 'Gateway House', a private think-tank on foreign policy.

Although in praise of PM Modi's "Make in India" project, the Governor said that only a easy and predictable tax structure will create the necessary framework.

He added that India is a very open economy, very dependent on international markets being open. "We buy lot of energy, lot of commodities. So we need international market to be very open and very competitive."

On the demand-supply dynamics needed to sustain a high growth rate, he said, "We have to create underlying supply conditions that would allow us to sort of have much higher demand. In some sense I see 9 per cent growth as a situation where we are investing tremendous amount and thus creating the supply which will then help the demand."

He added, "It is a steady process rather than an overnight process. It will take some time. I don't think that we will go overnight. That (the 9 per cent) is certainly an aspiration we should have, but we need to eliminate the supply constraints, including our human capital."

Coal imports fall 27% to 12.6 mt in September

India's coal imports slumped 27% to 12.6 million tonnes (mt) in September from a year earlier as local output jumped, Coal Secretary Anil Swarup said.

Coal India
Shares of Coal India Ltd are currently trading at Rs. 337.55, down by 0.27% on BSE.

India's coal imports slumped 27% to 12.6 million tonnes (mt) in September from a year earlier as local output jumped, Coal Secretary Anil Swarup said.

"With unprecedented increase in coal production by Coal India Ltd, import of coal comes down for third successive month," Swarup said via micro-blogging site Tweeter.

With an aim to double the coal production in the country by 2020, India is opening a mine a month.

Gruh Finance profit climbs 20% to Rs. 517.10 mn

Total Income has increased from Rs. 2577.30 million for the quarter ended September 30, 2014 to Rs. 3118.10 million for the quarter ended September 30, 2015.

Gruh Finance Ltd has announced the following Un-Audited Standalone results for the quarter ended September 30, 2015 :

The company has posted a net profit of Rs. 517.10 million for the quarter ended September 30, 2015, 2015 as compared to Rs. 430.90 million for the same quarter in the previous year. Total Income has increased from Rs. 2577.30 million for the quarter ended September 30, 2014 to Rs. 3118.10 million for the quarter ended September 30, 2015.

Ultratech Cement Q2 PAT at Rs. 426 crore

The company’s sales stands at Rs. 5,951 crore for the quarter under review from Rs. 5,270 crore for the corresponding quarter of the previous year.

UltraTech Cement
Ultratech Cement, India's biggest cement company and India’s largest exporter of cement clinker, has announced the following unaudited standalone results for the quarter ended September 30, 2015.

The company reported its Q2 net profit at Rs.426 crore for the quarter ended September 30, 2015 as compared to Rs 414 crore for the same quarter in the previous year. The company’s sales stands at Rs. 5,951 crore for the quarter under review from Rs. 5,270 crore for the corresponding quarter of the previous year.

SBI Composite Index for October ​shows moderate growth

The yearly SBI Composite Index for Oct’15 is at 53.6 (Moderate Growth), compared to last month index of 53.9 (Moderate Growth). However, the Monthly Index increase to 50.8 (Low Decline) in Oct’15, from 48.4 (Low Decline) in Sep’15.

State Bank of India, SBI
In continuation of the launch of the SBI Composite Index on December 9, 2014, State Bank of India herewith releases yearly as well as monthly Composite Index value for the month of October 2015.
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The yearly SBI Composite Index for Oct’15 is at 53.6 (Moderate Growth), compared to last month index of 53.9 (Moderate Growth). However, the Monthly Index increase to 50.8 (Low Decline) in Oct’15, from 48.4 (Low Decline) in Sep’15. The upturn has been majorly driven by manufacturing, while mining and electricity are still acting as a drag on economic activity. Besides, the positive trends in capital goods sector suggest the possible pick-up in economic momentum. IIP is also driven majorly by manufacturing (particularly capital goods) as revealed by higher ex-mining and ex-electricity growth.

The m-o-m growth in ASCB credit was at 12-month high as of fortnight ended 02 Oct’15 and our internal prognosis suggests that sectors like power, steel, green energy, hydrocarbon and telecom will see a strong credit demand in the coming quarters. We also expect a smart growth in in personal loan segment especially in housing (due to rationalization of risk weights and LTV ratios) and in vehicle loan (due to festive season). The rationalization of risk weights and LTV ratios will equip banks with more capital, and our internal estimate (albeit based on certain assumptions) suggests that RBI move would release capital worth Rs 7,785 crore for entire banking industry. As our SBI index predicts the industrial growth in 2-month advance, our index numbers suggest around 7% growth in IIP for either the month of Sep’15 or Oct’15, or possibly both.

Further Centre has decided to extend the disbursement of the recently announced Rs 6000 crore soft loan to sugar sector October 16. Overall, “Minimum government, maximum governance” can yield some improvement by about minimum of 4% of net sales or so for sugar sector.

The Index captures two components of the manufacturing cycle namely month-on-month and year-on-year growth on a scale of 0 to 100. Index above 50 implies growth over previous respective period and less than 50 will suggest a contraction over respective period. 

Infosys to acquire Noah Consulting for US$70mn

The board has Considered and approved to acquire 100 percent stake in Noah Consulting LLC, head quartered in Houston, Texas (USA), a leading provider advanced information management consulting services for the oil and gas industry.

Infosys announced a definitive agreement to acquire Noah Consulting, LLC, a leading provider of advanced information management consulting services for the oil and gas industry. This acquisition was an all-cash deal, with an aggregate purchase consideration of US$70 million.

Noah Consulting helps upstream oil and gas companies, including super majors, independents and oil field service companies plan, architect and deploy information solutions to unlock the value of their oil and gas assets. Noah's deep domain expertise in upstream oil and gas, coupled with their tools, solution accelerators and proprietary methodologies, makes them a leader in driving strategic data management engagements. This acquisition combines Noah’s deep industry knowledge, information strategy planning, data governance and architecture capabilities with Infosys’ ability to provide technology and outsourcing services on a global scale to oil and gas clients.

Commenting on the acquisition, Rajesh Murthy, EVP and Global Head of Energy, Communications and Services, Infosys said, “The upstream oil and gas industry is facing unprecedented challenges that demand faster and better ways of achieving return on investment. This requires a well-defined and executed information and data management strategy that will allow companies to increase efficiencies across the lifecycle – from exploration to production. With this acquisition, we are uniquely positioned to offer end-to-end data management services to oil and gas companies globally.”

“Our oil and gas clients are adjusting to a new normal of lower oil prices. There is an urgency to improve the efficiency and effectiveness of their operations in a safe and reliable manner. This acquisition is part of Infosys’ strategy to bring next generation data analytics solutions to the oil and gas industry” said Sanjay Purohit, EVP and Global Head of Infosys Consulting.

John Ruddy, President of Noah Consulting said, “We are excited about the new capabilities that the combination of Noah and Infosys will bring to our clients. Together, we can effect transformational change for our oil and gas clients by using information management to integrate supply chain, safety, environmental and financial data with geoscience, engineering and other operational and technical data – an industry challenge that has never been addressed effectively. We look forward to making a difference together.”

Reliance Industries Shares Jump 5% on Record Q2 Profit

Reliance Industries shares jumped nearly 5 per cent on Monday after the oil-to-retail conglomerate posted record quarterly profit on the back of strong refining margins. RIL was the top Nifty gainer in morning trade.

Controlled by billionaire Mukesh Ambani, Reliance Industries on Friday reported a 12.5 per cent jump in consolidated net profit to Rs 6,720 crore, even though plunging crude prices dragged revenue down by more than a third to Rs 75,117 crore.

Higher profits came largely from gross refining margins, which rose to $10.60 per barrel, the highest in seven years and up from $8.30 in the same quarter a year earlier.

RIL generates the bulk of its revenue from refining and petrochemicals, but it has been expanding into consumer businesses such as retail and telecom to aid growth. The company confirmed plans to launch its keenly awaited 4G telecommunication service by "around December".

Reliance Industries has spent more than $14 billion to date on telecom alone, and is spreading into fashion, grocery and online banking. Its telecom arm is building India's biggest fourth-generation (4G) broadband network and plans a December launch for its Jio brand.

The company's retail business achieved a milestone of Rs 5,000 crore quarterly turnover mark for the first time. RIL said its retail division will also sell its own brand of 4G LTE smartphones under the brand name LYF, pronounced "life".

Most brokers raised their earnings per share estimate after RIL's solid Q2. CLSA upped its FY16-17 EPS estimate by 3-6 per cent, while Kotak increased RIL's EPS by 3-8 per cent.

As of 09.39 a.m., RIL shares traded 4.2 per cent higher at Rs 959.50, outperforming the 0.24 per cent gain in the broader Sensex.

Sugar prices rise 25% in two months

The International Sugar Organization (ISO) has predicted that the global sugar market will slip into a deficit after enjoying a surplus for several years.

After falling by more than 20% during January-July 2015, sugar prices have reportedly risen by ~25% over the past two months.

Erratic monsoon in the major sugarcane producing states in Uttar Pradesh, Karnataka and Maharashtra, and pick-up in festival demand have sent sugar prices higher of late, reports a business daily.

Sugar prices at the National Commodities & Derivatives Exchange jumped to Rs. 2,699 per quintal on October 7 from Rs. 2,164.15 per quintal on July 31.

Sugar price was trading at Rs. 2,718.35 per quintal on commodity bourses on January 1.

According to experts, sugar price may rise further to Rs. 3,000 per quintal by the end of March 2016.

In its first advance estimate for sugar season 2015-16, the Indian Sugar Mills Association (ISMA) has estimated production of 270 lakh tonnes, which is lower by 10 lakh tonnes compared to the preliminary estimates of July.

The International Sugar Organization (ISO) has predicted that the global sugar market will slip into a deficit after enjoying a surplus for several years.

ISO has projected a deficit of ~2.5 million tonnes in 2015-16 and forecast more than double deficit of 6.2 million tonnes in 2016-17.

RIL stock surges 4% on Q2 earnings

The Group has posted a net profit after tax, minority interest and share of profit of associates of Rs. 67200 million for the quarter ended September 30, 2015 as compared to Rs. 59720 mn for the quarter ended September 30, 2014.

Shares of Reliance Industries Ltd were trading higher by 4% at Rs. 953, after the company posted Q2 results on Friday.

RIL3 The Group has posted a net profit after tax, minority interest and share of profit of associates of Rs. 67200 million for the quarter ended September 30, 2015 as compared to Rs. 59720 mn for the quarter ended September 30, 2014. 

Total Income has decreased from Rs. 1118060 mn for the quarter ended September 30, 2014 to Rs. 724970 million for the quarter ended September 30, 2015.

The scrip opened at Rs. 941.6 and has touched a high and low of Rs. 959 and Rs. 941.6 respectively. So far 198978(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 295445.96 crore.

The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 1067 on 23-Jul-2015 and a 52 week low of Rs. 796.75 on 30-Mar-2015. Last one week high and low of the scrip stood at Rs. 914.7 and Rs. 883 respectively.

The promoters holding in the company stood at 45.21 % while Institutions and Non-Institutions held 31.77 % and 19.85 % respectively.

The stock is currently trading below its 200 DMA.

China’s Q3 GDP grows by 6.9%

China's economy grew 6.9% yoy in the third quarter, compared with 7% in the previous three months.


China's economy grew 6.9% yoy in the third quarter, compared with 7% in the previous three months. Expectations were it would grow by 6.8% in July-September period.

12 Stocks in focus today

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

HCL Tech: The IT Company has announced net profit for the quarter stood at Rs.1,726 crore vs Rs.1,783 cr QoQ.

RIL: Reliance Industries Ltd has  posted a net profit after tax, minority interest and share of profit of associates of Rs. 67,200 million for the quarter ended September 30, 2015 as compared to Rs. 59,720 mn for the quarter ended September 30, 2014.

Vedanta: The company has signed an early agreement to invest Rs.84 billion to expand and develop its mineral and mining base in Rajasthan.

South Indian Bank: The bank reported 22.4% rise in its net profit of Rs. 93.4 crore for the quarter ended September 30, 2015 as compared to Rs. 76.3 crore for the same quarter in the previous year.

CRISIL Ltd: The company has posted a net profit of Rs. 768.70 million for the quarter ended September 30, 2015 as compared to Rs. 711.10 mn for the quarter ended September 30, 2014.

DLF: The company is planning to develop 4 million sq. ft of office space in Chennai.The company will expand its DLF IT Special Economic Zone (SEZ) in Manapakkam, while in the second project, it will build a SEZ for IT and ITeS at Taramani.

M&M: Mahindra & Mahindra is planning to enter the premium motorcycle segment overseas, including Latin America, South East Asia and North Africa with its recently launched 300cc bike “Mojo”

Unichem Lab: The pharma company reported net profit for the quarter stands at Rs 23.1 crore. Revenues from Domestic Formulations stood at Rs. 188.5 crs as against Rs. 166.6 crs in the same period last year showing a growth of 13.1%.

Tata Sponge Iron Ltd: The company reported   net profit for the second quarter ended September 30 has nosedived by a whopping 75% to Rs. 5.69 cr as against net profit of Rs. 22.53 cr reported in the corresponding period a year ago.

Nestle India: The vastly popular Maggi noodles will be back on the store shelves within the next two months after Nestle India announced that all samples of the instant snack have cleared tests conducted by three laboratories.

National Buildings Construction Corporation Ltd : The company has informed BSE that Acharya N. G. Ranga Agricultural University (ANGRAU), Hyderabad has entrusted the project of civil works at different colleges of ANGRAU in the state of Telangana to NBCC for estimated amount of Rs. 126.33cr (approx).

Maruti Suzuki India: The company is planning to introduce features like airbags and anti-lock braking system as an option in its mass market models, much ahead of Government regulations coming into force in 2017.
Bajaj Electricals: The company has launched a new range of light emitting diodes (LED) luminaries called under the brand “.nxt”. It will provide this range of LED lights under this brand for IT/ITES, modern work spaces, pharmaceuticals and retail.

Hindustan Copper Ltd: The company will commence its Rs. 2.1 billion Surda mine expansion project work after the dispute between the lead contractor and the sub-contractor was resolved.

Unichem Q2 Net Edges Up 3.5% to Rs 23 Cr

New Delhi: Drug firm Unichem Laboratories today reported a 3.49 per cent rise in its standalone net profit at Rs 23.09 crore for the September quarter.

The company had posted a net profit of Rs 22.31 crore in the same period of the previous fiscal, Unichem Laboratories said in a filing to BSE.

Stand-alone total income from operations of the company also rose to Rs 305.55 crore for the quarter under review as against Rs 278.15 crore a year ago.

Unichem Laboratories manufactures a range of formulations and active pharmaceutical ingredients (APIs).

HCL Tech September Quarter Profit Meets Estimates

Mumbai: HCL Technologies Ltd, India's fourth largest software services exporter by revenue, reported a 8 per cent fall in quarterly net profit on Monday, but met Street estimates as its core manufacturing clients added more projects.

Revenue in dollar terms rose 8 per cent to $1.54 billion. In September, HCL Tech said its revenue in US dollars would have adverse impact of 80 bps on a sharp depreciation of multiple currencies against the dollar.

HCL is part of a $150-billion Indian outsourcing sector that generates the bigger part of its sales by providing services like IT network installation and development of software applications to Western clients.

Consolidated net income for HCL Technologies under US accounting standards rose to Rs 1,726 crore in the quarter ended September 30, down 8 per cent from a year earlier.

Analysts on average expected the company to report a net profit of Rs 1,723 crore, according to Thomson Reuters data.