ITC hits one month low post September quarter earnings

The stock was down nearly 3% at Rs 331 on the Bombay Stock Exchange.

ITC is trading lower by nearly 3% at Rs 331 on the Bombay Stock Exchange (BSE), after reporting lower than expected revenue and net profit growth for the second quarter ended September 2013 (Q2).

The stock opened at Rs 338 and touched a low of Rs 330, its lowest level since September 13 on the BSE. The stock, which has nearly 11% weightage on the S&P BSE Sensex, was the biggest drag on markets. ITC contributed nearly 55 points fall in benchmark index Sensex, which was up around 25 points at 1008 hours.

Cigarette-to-hotels major’s net sales rose by a disappointing 8.8% year on year (yoy) to Rs 7,776 crore, which was below an average analyst estimate of Rs 8,087 crore.

While cigarettes business posted a modest top-line growth of 10% yoy impacted by higher than expected de-growth in volumes, the growth in other FMCG business too tapered to 16.1% yoy due to sluggishness in demand.

The company’s profit after tax grew 21.5% yoy at Rs 2,230 crore, aided by write back of Rs 158 crore of liability towards rates and taxes pertaining to earlier years. The company also wrote back Rs 35 crore of interest pertaining to the aforesaid liability.

Gold futures down at Rs 30,460 per 10 gm

Gold prices fell 0.24 per cent to Rs 30,460 per 10 gram at the futures trade today as participants reduced their positions largely in tandem with a weak trend overseas amid profit-booking.

On the Multi Commodity Exchange, gold for delivery in far-month February eased Rs 73 or 0.24 per cent to Rs 30,460 per 10 gram in a business turnover of 26 lots. Likewise, the metal for delivery in December shed Rs 63 or 0.2 per cent to Rs 30,797 per 10 gram in 613 lots.

Analysts said a weak trend in the overseas market ahead of the US Federal Reserve meet mainly weighed on gold prices at the futures trade here.

US Federal Reserve policy makers at the two-day meeting beginning tomorrow may decide on the pace of monetary stimulus.

Globally, the yellow metal fell 0.23 per cent to $1,349.80 an ounce in Singapore today.

Tata Global Beverages gains on raising Rs 325 crore through issue of NCDs

Tata Global Beverages has raised a sum of Rs 325 crore by the issue of 3% Secured Redeemable Non Convertible Debentures (NCD) by way of private placement. The said NCDs will be listed on the wholesale debt market segment of the National Stock Exchange of India (NSE). The NCDs are redeemable after a period of three years with redemption premium.

Tata Global Beverages, formerly known as Tata Tea, is a multinational non-alcoholic Beverages Company headquartered in Kolkata, West Bengal, India and a subsidiary of the Tata Group. It is the world's second-largest manufacturer and distributor of tea. Tata Global Beverages markets tea under the major brands Tata Tea, Tetley, Good Earth Teas and JEMCA.

Iraq oil exports plunge to 19-month low

Iraq’s oil exports hit a 19-month low in September, Oil Ministry spokesman Assem Jihad said today, attributing the decline to maintenance and improvement projects at the country’s ports.

Iraq exported 62.1 million barrels of oil in September, or about 2.07 million barrels per day (bpd), Jihad said — the lowest daily average since February 2012.

The country earned $6.511 billion from the exports, its lowest monthly figure in over a year.

Sales of crude, which account for the vast majority of Iraq’s government income, had averaged 2.579 million bpd in August and raised revenues of $8.3 billion.

Jihad said the September decline was due to “periodic maintenance activities for the southern ports and projects” to add new floating oil storage facilities and increase the ports’ export capacities.

Iraq is heavily dependent on oil exports, and the government is seeking to dramatically ramp up its sales in the coming years to fund the reconstruction of its battered infrastructure.

Officials are aiming to increase production capacity to nine million bpd by 2017, a target that the International Monetary Fund and International Energy Agency have warned is over—optimistic.

Rupee opens a tad stronger at 61.43

The rupee opened a tad stronger at 61.43 per dollar against Friday's close of 61.46 ahead of Reserve Bank of India (RBI) monetary policy review tomorrow and a weak US currency overseas.

The domestic unit had strengthened last week on dollar sales by banks due to weakness of the greenback against other currencies overseas, coupled with persistent foreign capital inflows into the equity market.

Dealers expect the rupee movement to be muted ahead of the key events. The RBI policy meeting is scheduled tomorrow, while the US Federal Open Market Committee (FOMC) will meet on October 29-30.

Australian shares lead Asian rebound; yen softens

MSCI's broadest index of Asia-Pacific shares outside Japan rises 0.7%

Australian stocks scaled a five-year peak on Monday, leading a rebound in Asia after strong results from the likes of Microsoft pushed Wall Street to another record closing high, while investors gave the safe-haven yen a wide berth.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7%, recovering a chunk of last week's 1.1% loss -- the biggest in two months -- that was driven by concerns that China may tighten policy to keep prices under control.

Australian shares put on 1.2% to reach their highest since June 2008, Hong Kong's Hang Seng added 0.4%, and South Korea's KOSPI rose 0.3%.

Japan's Nikkei climbed 1.0%, clawing back some of Friday's 2.7% drop.

"The market is getting bought back after excessive selling on Friday... but I don't think we will be testing new highs," said Kenichi Hirano, strategist at Tachibana Securities of the Nikkei.

Many traders suspect further gains in Asia may be limited as investors keep a wary eye what steps Chinese policymakers might take to cool property prices and inflation.

Several markets in Asia are closed for public holidays on Monday, including New Zealand and the Philippines.

RISK IN PLAY

With risk appetite on the mend, demand for the safe-haven yen waned. That saw the Australian dollar gain 0.5% to 93.68 yen, and both the euro and dollar edged up slightly to 134.74 and 97.52 respectively.

Against the dollar, the euro was a tad firmer at $1.3814 and within striking distance of Friday's two-year high of $1.3833.

The dollar has been under broad pressure in the past few weeks on growing expectations the Federal Reserve will maintain its massive stimulus programme into next year.

The Fed's policy-setting arm meets on Oct 29-30 and is expected to hold off any move to scale down its $85 billion monthly bond-buying programme.

Analysts reckon policymakers want to see the impact of the US budget battle that took the country to the brink of a debt default and caused a partial government shutdown.

"The FOMC should be a non-event... the Washington debates cloud the growth outlook, so forget about tapering," analysts at JPMorgan wrote in a client note, adding the April 2014 meeting looked like the soonest start for any tapering.

In contrast to equities, commodities got off to a sleepy start with copper a touch lower at $7,178.25 a tonne, while US crude oil slipped 0.1% to $97.72 a barrel. Spot gold was steady $1,352.44 an ounce.

Historical data of Currency & Commodity

Gold smuggling surges with govt's import curbs

Apr-Sep seizures higher than in past 24 months; annual haul set to be 50% higher than total of past decade; at least 90% of illegal flow estimated to get in

The government’s clamp on gold import has led to a surge in smuggling, with seizures rising almost fourfold in April-September over the same period last year.

The catch in these first six months of this financial year is close to the total seizures of the past two years. The haul for the entire year is likely to be 50 per cent more than the total seizure in the past decade.

By provisional figures, gold worth Rs 130 crore was seized from 383 cases in April-September against Rs 28 crore from 339 cases in the year-ago period, an increase of 360 per cent in value terms. In volume, it went up from 99 kg to 500 kg in the first half. Seizures worth Rs 99 crore and Rs 46 crore were made in 2012-13 and 2011-12, respectively, adding to Rs 145 crore. Officials said as the data was still being updated, the seizures could touch Rs 150 crore in the first half and was likely to be close to Rs 250-300 crore for the entire year. Between 2003-04 and 2012-13, gold seizures of Rs 199 crore were made, of which Rs 99 crore was last year.

Rough estimates suggest only five to 10 per cent of smuggled gold is seized. The rest manages to get in unnoticed. Gold has replaced narcotics as the biggest smuggled item in value terms in the past few months.

“There was not a sharp rise in the number of cases but in value terms the seizures went up as smugglers brought in more gold to maximise gains due to the import curbs and a six percentage points increase in the duty in the past one year,” said a revenue department official who did not wish to be identified.

The seizures will add to the government’s coffers at a time when every paisa counts. While it does not contribute to the current account deficit, the government can auction the seized gold; smuggled gold cannot be claimed by anyone. This year, the government has planned to auction gold worth Rs 100 crore through the State Bank of India. The gains could go up in 2014-15, as the gold seized this year would go under the hammer only next year. The minimum time lag between  seizure and auction is six months but if a person challenges it in a court, an auction can be held up for several years.



Seizures might rise further in the coming quarters, as the gold duty was raised from eight per cent to 10 per cent in August. Officials said more than the increase in duty, the restrictions on gold imports by the Reserve Bank of India had contributed to the sharp rise in cases of smuggling. Imports fell from 142 tonnes in April to 11.2 tonnes in September, with the import value falling from Rs 36,223 crore to Rs 3,150 crore in the period.

The directorate of revenue intelligence and the Customs department have stepped up vigil on ports and airports, especially on flights originating from the West Asia region.

HUL Q2 net profit at Rs9138mn

Harish Manwani, Chairman commented: “We have delivered another quarter of competitive and profitable growth. The consistency and resilience of our performance, in what has been a challenging market environment for some quarters now, is a reflection of the discipline with which we are managing our business and executing our strategy."

Hindustan Unilever Limited announced its results for the quarter ending 30th September 2013.
The Company has posted a net profit of Rs. 9138.00 mn for the quarter ended September 30, 2013 as compared to Rs. 8069.20 mn for the quarter ended September 30, 2012.
Total Income has increased from Rs. 64595.60 million for the quarter ended September 30, 2012 to Rs. 70436.30 million for the quarter ended September 30, 2013.

During the quarter, the Domestic Consumer business grew at 10%, ahead of market, driven by 5% underlying volume growth.

Soaps and Detergents grew 6%; healthy volume growth                                                                                                                              
Skin Cleansing sustained its strong performance, registering its fourth successive quarter of double digit volume growth with Lifebuoy, Breeze and Lux leading category growth. The quarter saw price deflation arising from actions taken earlier in the year to pass on the benefit of lower commodity costs to consumers.

In Laundry, growth continued to be led by Surf and Rin while Wheel sales showed signs of stabilizing. Comfort fabric conditioners delivered robust growth on the back of sustained market development. Household Care continues to do very well with both Vim and Domex growing in double digit.

Personal Products grew 12% in a slowing market; double digit growth across categories
In Skin Care, growth stepped up to double digit, aided by a favorable comparator and good sales in advance of winter. Fair & Lovely was re-launched towards the end of the quarter with the new ‘Best Ever Formula’ and a focused activation plan. Vaseline and Dove lotions did particularly well, Lakme registered one of its strongest quarters of innovation led growth while Ponds saw good growth on talc. The portfolio was expanded with the Lakme Youth Infinity range and differentiated offerings in facial cleansing under Lakme, Ponds and Dove.

Hair Care had another very good quarter with broad based double digit volume growth and TRESemmé gaining further ground. Hair conditioners continued to lead market development with sustained high growth. The global portfolio was further leveraged to launch the Toni & Guy range of premium hair care and styling offerings.

In Oral Care, both brands delivered double digit growth in the context of a sharp increase in competitive intensity and in media spends. Pepsodent was re-launched with a superior product and proposition while Close Up continued to be driven by exciting activation. A&P investments were significantly stepped up to sustain our competitive position in this category.
Colour Cosmetics maintained its strong innovation led growth momentum across the Lakme portfolio. Growth was driven by premium make-up with Absolute and 9 to 5 and a further acceleration in the growth of Elle 18.

Beverages grew 16%; another strong performance by tea
Tea delivered one of its strongest quarters, sustaining broad based price-led growth and healthy volumes. All key brands grew in double digits led by mix improvements and strong in-market activities. The continued thrust on market development for tea bags enabled flavored and green teabags sales to nearly double in the quarter. In a slowing coffee market, Bru growth was led by the robust performance of Bru Gold.

Packaged Foods grew 9%; Kissan accelerates, Kwality Walls steps up
Kissan maintained its double digit growth with a very good quarter for Ketchups while Knorr sales was driven by Instant Soups. Despite challenging market conditions, Kwality Walls stepped up to double digit growth through sharper in-market execution and the rollout of the ‘Perfect Stores’ program for the category.

Volatile cost environment; competitive intensity heightens
The operating context during the quarter was challenging given the volatile cost environment, led by the Rupee depreciation, and heightened competitive intensity. Overall industry media spend was up to its highest levels in over 18 quarters, with a particularly sharp increase in Oral Care. We invested at competitive levels across segments with a significant step up in Personal Products – overall A&P spend was up by Rs. 185 Crores (+165 bps) in the quarter.

PBIT up 11%, margins expand +20bps
Despite a sharp increase in A&P spends, Profit before Interest and Tax (PBIT) grew by 11% with PBIT margin improving +20 bps. Profit after tax before exceptional items, PAT (bei), grew by 10% to Rs. 883 Crores while Net Profit at Rs. 914 Crores was up 13%.

The Board of Directors have declared an interim dividend of Rs 5.5 per equity share of face value Re. 1 each, for the year ending 31st March 2014.

Harish Manwani, Chairman commented: “We have delivered another quarter of competitive and profitable growth. The consistency and resilience of our performance, in what has been a challenging market environment for some quarters now, is a reflection of the discipline with which we are managing our business and executing our strategy. We continue to strengthen our business for the long term by driving innovation, investing behind our brands and further building organizational capabilities.”

Market opens higher on positive Asia cues

NSE Nifty opened at 6160, up 16 points while 30-share BSE Sensex opened 40 points higher with 25 components in green.

Market opened higher folowing firm Asian stocks; tracking CNX Nifty futures on the Singapore stock exchange, NSE Nifty opened at 6160, up 16 points while 30-share BSE Sensex opened 40 points higher with 25 components in green.

The rupee is trading at 61.45 per dollar; the unit closed at 61.46/47 on Friday

The market is expected to remain volatile in the week ahead as traders mull rolling over positions in November 2013 series from the near month October series in the futures & options segment.

BSE realty index rose 1.1% and is the  top sectoral gainer; FMCG index is the top looser in the sectoral pack with losses of 0.6%