Monday, August 16, 2010

Market Outlook: Indian markets are expected to open in negative terrain and trade flat

Market Outlook: Indian markets are expected to open in negative terrain and trade flat for the rest of the day. Asian stocks fell, after reports on Japanese gross domestic product and U.S. retail sales missed economist estimates. US stocks fell and the Standard & Poor`s 500 Index posted the biggest loss in five weeks on concern that the Federal Reserve`s stimulus plan and an increase in jobless claims means the economic recovery is in jeopardy. The crucial support on the downside for the Nifty is 5410 and resistance at 5500. On Overall trading point of view we would continue to book profits on the way up.

Global events to watch:

Þ Empire State Mfg Survey

Þ Treasury International Capital

Þ Bill Auction

Global indices Update @ 8:

Dow Jones : 10303 (- 16.80)

NASDAQ : 2173 (- 16.79)

Nikkei 225 : 9166 (- 86.53)

Hang seng : 21039 (- 31.98)

SGX CNX Nifty : 5452 (- 06.50)

INR / 1 USD : 46.58

Stocks in action for the day: Suzlon, Tata Stl, Unitech, Cairn, Rolta, RComm, Powergrid, Raymond

Listing today: SKS Microfinance: Shares of SKS Microfinance, engaged in providing microfinance services to individuals from poor segments of rural India, will list today. It has fixed issue price at Rs 985 per share, at higher end of price band of Rs 850-985. The company has received more than Rs 1600 crore through the offering of 168 lakh equity shares. Retail investors received shares at a discount of Rs 50 per share. The issue was subscribed 13.69 times. Qualified institutional investors' reserved portion was subscribed 20.38 times, non-institutional investors 18.26 times and retail investors 2.81 times. Several listings in the recent past, like of Hindustan Media Ventures and Technofab Engineering, have been encouraging and in that context, we can expect SKS to see 10-15% gains on the first day.

Vedanta-Cairn: Vedanta Resources Plc May acquire 51% stake worth around USD 8-8.5 billion in UK-based Cairn Energy’s Indian entity. Sources says that Cairn has agreed to sell part stake in its Indian unit. This signalling a strategic shift by mining company Vedanta into oil and gas. Petronas, which holds almost 15% in Cairn India, is unlikely to sell its stake to the Anil Agarwal company. If Cairn India is being acquired at USD 8-8.5 billion, then the open offer works out to Rs 388 – Rs 412 per share. However the buzz in the market is that the open offer in Cairn India is seen at upwards of Rs 400 per share. Cairn's current market capitalization is at USD 14.3 billion. The formal announcement to the said deal may come in as early as August 16. After Mukesh Ambani`s Reliance Industries, Cairn India is the country`s second-biggest private sector producer. Its Mangala field in Rajasthan, which went on stream last August, is producing 125,000 barrels a day, with potential to go up to 240,000 barrels a day.

Suzlon may sell RE power pie for USD 500 million Private equity fund TPG Capital and a US-based global energy fund are in separate talks with loss-making Suzlon to acquire up to 25% stake in its German wind energy subsidiary, REpower Systems, for USD 500 million, a person aware of the development said. The transaction will be done through a mix of fresh issue of shares by REpower and stake sale by Suzlon. Suzlon owns 90.7% in REpower and the funds from the stake sale could be used by the Indian wind-turbine maker to pare its total debt of around `100 billion, said this person. When contacted, a Suzlon spokesman said: ``We do not comment on market rumours or speculation.`` An email sent to TPG Capital spokesman remained unanswered. Suzlon recently completed financial closure of refinancing and consolidation of debt worth `106.9 billion and also raised `11.88 billion through a rights issue.

Tata Steel to get a European edge Tata Steel`s performance for the quarter to June was well in line with the market expectations. The steel maker had suffered losses a year ago on accountof the poor show at its European operations. The company appears to have left behind that phase given the turnaround in its European business. However, growth in the near term partially hinges on the extent to which its domestic operations are impacted due to steel imports from China. Further, though volumes are buoyant in the European market, profitability will be capped due to rising raw material prices. The performance of Tata Steel Europe (TSE) during the past two quarters has been good, thanks to higher realisations and capacity utilizations. The management now intends to transformthe company into a more integrated, customer-focused business. These initiatives, once implemented, can help the company streamline its operations.

M&M plans to have local CEO for Ssangyong Utility vehicle major Mahindra & Mahindra (M&M) will try to have in place a Korean national at the helm of troubled automaker Ssangyong Motor, after the acquisition. M&M, which was selected as the preferred one by Ssangyong from the final list of three bidders, plans to sign a preliminary deal with Ssangyong by month-end. The deal is expected to be complete by November. Sources say having a local chief executive will be ideal for handling complex matters such as the work force. Labour issues have been volatile inthe past.

Unitech mulls acquisition of new projects Buoyed by an over 14% jump in its consolidated quarterly net profit, the country`s second largest realty firm Unitech is all set to explore possibilities for acquiring new projects in the coming months. The company had yesterday reported its consolidated net profit for the quarter ended June 30 at Rs 1,800.4 million compared to Rs 1,577.7 million in the same quarter last fiscal. The total incomeof the Unitech Group also increased by 53.87% to Rs 8,435.7 million in April-June compared to Rs 5,482.2 million in the corresponding quarter last fiscal. ``With the financial leverage at a healthy level, the company is in a position to look at opportunities for acquisition of new projects,`` Unitech Managing Director, Sanjay Chandra said.

Rolta eyes 15% profit growth; open to small-ticket buys IT major, Rolta, is eyeing a 15%-plus growth in its profits this fiscal and its revenue growth at between 12-15%, a senior company official said. ``We expect our profit to grow at over 15% this fiscal which will be more than our expected revenue growth of 12-15%,`` Rolta`s Director Finance & CFO, Hiranya Ashar, said here.The company`s financial year ends on June 30. The company is open to small-ticket acquisitions in the USD 5-20 million range and centres on IP to make its solutions robust, he said. ``We are constantly evaluating proposals but there is nothing concrete presently. We would be interested in acquisitions in north America,`` he said.

Pennar eyes acquisition in nuclear, auto sector Pennar Industries is scouting for domestic acquisitions this fiscal with a view to gain a strong foothold in the sunrise nuclear engineering and defence sectors as well as in the rapidly growing domestic auto sector, a top company official said. The Hyderabad based company, a major player in the metal and pre-engineered products, plans to invest close to Rs 1 billion to acquire a sheet manufacturing company that caters to sectors such as auto, nuclear engineering and defence, the official said. ``We are looking at acquiring a company manufacturing steel sheets (used in auto, nuclear and defence sectors). The investment would be around Rs 1 billion. We are looking at closing the deal this fiscal,`` Pennar Industries` Founder Chairman, Nrupendra Rao, said here.

Camson Biotech plans global venture: Camson Biotechnologies, an intellectual property rights-driven agricultural biotechnology company, proposes to set up manufacturing and distribution units in Singapore, Dubai and Cairo, with a total investment of Rs 500 million. It will consider a joint venture partner for the Singapore investment and the capacity of the formulation unit would be 1 million litres an annum. The company will soon commission two formulation units of 10 lakh litres/annum each at Nangal in Himachal Pradesh and Uttarakhand. The units will manufacture granular and liquid biocides and bio-fertilisers. Camson posted 45% growth at Rs 50 million (Rs 40 million) in the June quarter, largely due to increased demand and better realisations from its zero-residue biocides and unique hybrid seeds. The company declared a total income of Rs 210 million (Rs 200 million).

Mahindra sees big harvest from small tractor: The Mahindra group is betting big on its small tractor, Yuvraj 215, that was launched last year with a price tag of around Rs 170,000. For the moment, the 15hp vehicle is produced in modest numbers at the Rajkot plant. However, since it is targeted at small farmers who traditionally use a pair of bullocks, the scope of its use could be more widespread.

RBI introduced minimum capital adequacy norms and limits by holding companies -The move will crimp borrowings by several large companies and force them to revamp their ownership structures -Stocks to watch: McDowell Holdings, Network 18, Jindal South West Holding, UB holding, Bajaj Holding

Eli Lilly loses patent case in US over its hyperactivity disorder drug, Sun Pharma and Aurobindo to benefit – BS

Raymond to revisit package for Thane mill workers, civic authority, union and management to meet tomorrow to discuss new package for employees – BS

Pipavav Shipyard: To Issue of 2.52 crore warrants to promoters for investment of Rs 250 crore, Signed MOU with Transocean Offshore for repairs of its off-shore drilling Units

Wockhardt increased Authorized capital from Rs 925 crore to Rs 1125 crore (Issued 40 crore prefrence shares of Rs.5 each)

Ramsarup Inds: Issuance of 35 lakh warrants to Promoter & Stratergic Investor (not more than 10% of company) also Issuance of FCCB to extend of Rs 1150 crore (Market Cap Rs 300 crore)

Shilpa Medicare board meet on 16 Aug to consider the issue of equity on preferential basis

House of Pearl Fashions: Board has approved for Scheme of Arrangement for merger of Pearl Global with House of Pearl Fashions

Powergrid to lease out towers to telecos – ET

Gangotri Iron & Steel: Stock Split in ratio of 2:1

NMDC acquired 1948 acres of land for setting up 3.MTPA steel plant

Power Firms plans 5-7% tariff hike – DNA

Tata Steel gets approval to explore Ankua mine – DNA

Tata Power Ex-Dividend @ Rs 12/share

Kamath front-runner to succeed Murthy as Infosys chairman – ET

Mahanagar Gas plans IPO – BS (It’s a JV between Gail and British Gas)

Suzlon Q1 consolidated (cr - crore, vs - versus) ales at Rs 2404 cr vs Rs 4175cr (Down 42% YoY) -Loss at Rs 912 cr vs Rs 452 cr (YoY)

Reliance Communications Q1 Sales at Rs 6977 cr vs Rs 7082 cr (down 1.5% QoQ) PAT at Rs 250 cr vs Rs 1219 cr (down 79% QoQ)

Unitech Q1 Revenues: Rs 828 cr vs Rs 1132.9 cr (QoQ) (expectation of Rs 810 cr) Net Profit: Rs 180 cr vs Rs 163 cr (QoQ) (expectation of Rs 170 cr)

Wockhardt Q1 Net Loss at Rs 116 cr vs loss of Rs 190 cr Net sales at Rs 922 cr vs Rs 954 cr

BEML Q1 Net profit at Rs 14.4 cr vs Rs 5.3 cr Net sales at Rs 527 cr vs Rs 465 cr

Cipla Q1 Net profit at Rs 257.4 cr vs Rs 241.7 cr (YoY) Net sales at Rs 1,427.4 cr vs Rs 1,325.3 cr (YoY)

Mcnally Bharat Engineering Q1 Sales at Rs 1458 cr vs Rs 967 cr (YoY) PAT at Rs 34.6 cr vs Rs 34 cr (YoY)

Nitin Fire Protection Q1 Sales at Rs 89.7 cr vs Rs 53.6 cr ((YoY)) PAT at Rs 9.63 cr vs Rs 8.6 cr ((YoY))

Sayaji Hotel Q1 Sales at Rs 46.6 cr vs Rs 34 cr ((YoY)) PAT at Rs 0.6 cr vs loss of Rs 1.13 cr ((YoY))

HMT Q1 Sales at Rs 42 cr vs Rs 39.8 cr ((YoY)) Loss at Rs 17.5 cr vs Rs 17.7 cr ((YoY))

Akruti City Q1 Sales at Rs 178 cr vs Rs 40.9 cr ((YoY)) PAT at Rs.42cr vs Rs.10.0cr ((YoY))

Allcargo Log Q1 Sales at Rs.639.4cr vs Rs.523cr ((YoY)) PAT at Rs.37.8cr vs Rs.46.6cr ((YoY))

Lanco Infratech Q1 -Sales at Rs.2125cr vs Rs.2194.9cr ((YoY)) -PAT at Rs.194cr vs Rs.115cr ((YoY))

JK Tyre Q1 -Sales at Rs.1167cr vs Rs.900cr ((YoY)) -PAT at Rs.19.5cr vs Rs.40.7cr ((YoY))

Vishal Retail Q1 -Sales at Rs.334cr vs Rs.265cr ((YoY)) -Loss at Rs.29.3cr vs Rs.63.24cr ((YoY))

Simplex Infra Q1 -Sales at Rs.1174cr vs Rs.1108cr ((YoY)) -PAT at Rs.36.2cr vs Rs.25.6cr ((YoY))

Shree Cement Q1 -Sales at Rs.944.5cr vs Rs.922.4cr ((YoY)) -PAT at Rs.105.9cr vs Rs.291.1cr ((YoY))

Bartronics Q1 Sales at Rs.162.7cr vs Rs.162cr ((YoY))-PAT at Rs.22.5cr vs Rs.23.8cr ((YoY))

ABG Shipyard Q1 -Sales at Rs.449cr vs Rs.393cr ((YoY)) -PAT at Rs.38cr vs Rs.47cr ((YoY))

Pipavav Q1 ((Standalone)) -Sales at Rs.176cr vs Rs.141.17cr ((YoY)) -Loss of Rs.9.78cr vs PAT of Rs.1.6cr ((YoY))

Bilcare Q1 ((Consolidated)) Sales at Rs.308cr vs Rs.238cr ((YoY)) -PAT at Rs.30.6cr vs Rs.22.8cr ((YoY))

NALCO Q1 -Sales at Rs.1397.8cr vs Rs.1036.5cr ((YoY)) -PAT at Rs.284cr vs Rs.126cr ((YoY))

Koutons Retail Q1 -Sales at Rs.161.5cr vs Rs.201cr ((YoY)) -PAT at Rs.5.5cr vs Rs.10.9cr ((YoY))


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