Tuesday, January 25, 2011

Market Outlook: Indian markets are expected to open on a positive note

Market Outlook: Indian markets are expected to open on a positive note on the back of constructive drive on the global counters. All eyes are on RBI meet scheduled today. RBI needs to demonstrate strong resolve to tackle inflation in order to maintain its credibility. Otherwise, inflation expectations will rise further. Overall trend remain the same. The support for the Nifty is at 5690 and resistance at 5810.

Credit Policy today – Market expects 25bps hike in repo and reverse repo.

Results Today - DRL, Grasim, HUL, IDBI Bank, Sterlite Ind, Ultratech Cem, United Phosphorus, Ceat

Global events to watch

Þ FOMC Meeting Begins

Þ ICSC-Goldman Store Sales

Þ FHFA House Price Index

Þ Consumer Confidence

Global indices Update @ 8:

Dow Jones : 11980 (+108.6)

NASDAQ : 2717 (+28.01)

Nikkei 225 : 10442 (+97.50)

Hang seng : 23902 (+100.3)

SGX CNX Nifty : 5760 (+19.00)

INR / 1 USD : 45.58

Stocks in action for the day: Zee Learn, Deccan Chronicle, JK Tyre, R-Power, Asian Paints, IDFC...

JK Tyre - dissapointing numbers due to high rubber prices, lower tonnage. Margins slipped further and profits now at single digits Q3FY11 YoY (cr - crore, vs - versus, cons - consolidated) -Revenues up 46% at Rs 1178 cr vs Rs 802 cr -PAT down 75% at Rs 9 cr vs Rs 36 cr -OPM at 5.2% vs 12.1% QoQ -Revenues at Rs 1178 vs Rs 1138cr -OPM at 5.2% vs 6.2% -PAT at Rs 9 cr vs Rs 20cr

EIH Q3 -Net profit at Rs 28.4 cr vs Rs 22.3 cr (YoY) -Net sales at Rs 282 cr vs Rs 222 cr (YoY)

Torrent Power cons Q3FY11 -Revenue up 5% at Rs 1558 cr vs Rs 1488 cr -PAT down 20% at Rs 197 cr vs Rs 245 cr -EBIDTA margin at 27.5% vs 34.8% -Total Exp up 15% at Rs 1230 cr Vs Rs 1066 cr

Kirloskar Ferrous Q3FY11 -Revenue up 38% at Rs 284 cr Vs Rs 206 cr -PAT down 23% at Rs 10 cr Vs Rs 13 cr -EBIDTA margin at 4.55% vs 4.32% -Consumption of raw material up 50% at Rs 235 cr Vs Rs 157 cr

Hinduja Foundires Q3FY11 -Revenue up 42% at Rs 156 cr Vs Rs 110 Cr -PAT up 42% at Rs 3.2 cr Vs Rs 2. 2 Cr -EBIDTA margin at 12.59% vs 14.35%

SKS Microfinance Q3 -Net profit at Rs 34.2 cr vs Rs 55.5 cr (YoY) -Revenue at Rs 363 cr vs Rs 250 cr (YoY) -Write off, provisioning stands at Rs 100 crore -Makes Rs 26.98 crore provisioning; -Provisioning followed by Malegam report;

Deccan Chronicle Holdings okays merger of 2 companies with self Deccan Chronicle says -Deccan Chargers Sporting Venture, Odyssey India to merge -No fresh shares to be issued as units fully owned by company

Philips buys Preethi to grow in South India Philips has agreed to buy South Indian home appliances brand Preethi for over Rs 3.5 billion in one of the largest M&A transactions in the intensely-competitive home appliances market in the country. The deal involves the purchase of the Preethi brand along with manufacturing facilities and after-sales divisions. Maya Appliances, which makes and owns the Preethi brand name, will continue to function as a separate company. Ernst & Young advised Maya on the transaction. Preethi mixers are a popular brand in the South and Philips will get access to a large market with dedicated plants and after-sales service. The Indian mixer market is estimated to be around Rs 14 billion and around 4.8 million units are sold every year. Preethi alone sells around 1.6 million units. Preethi, which has been trying to expand in the north and west, will be able to do so, riding on Philips` dealer network.

R-Power to invest USD 5 bn in Indonesia In what is being seen as one of the largest foreign investments in Indonesia, Reliance Power will infuse USD 5 billion (around Rs 220 billion) in two projects, one each in South Sumatra and Jambi provinces. The investment covers coal mining, setting up of railway lines, ports and power projects. According to a senior company official, who did not wish to be identified, the project in South Sumatra involves development of a 2- billion MT coal mine, a 200-km railway line, a port and a 2,000-MW power project at a cost of USD 3.5 billion. The project in Jambi involves another coal mining unit, along with a port, railway line and a small power plant. It will cost USD 1.5 billion without the power project.

Asian Paints to form 2nd JV with PPG Inds Asian Paints on Monday said it will form a second new joint venture with US-based PPG Industries, besides expanding their existing JV in order to accelerate growth of non-decorative coatings business in India. As per the plan, Asian Paints (APL) and PPG will establish a second 50:50 JV, Asian Paints said in a filing to Bombay Stock Exchange (BSE). This will be over an above expanding their current 50:50 joint venture - Asian PPG Industries (APPG), it added. APL and PPG have agreed that APL will take lead in the second venture and PPG will take lead in APPG in order to utilise their respective strengths, it said.

Sun Pharma plans its biggest buy in US Sun Pharmaceutical Industries, India`s largest drug maker by market value, is planning its biggest acquisition in the US to boost sales in the world`s largest pharmaceutical market, Chairman Dilip Shanghvi said. Sun, which made 13 purchases in the past 14 years, including the USD 454-million acquisition of a majority stake in Israel`s Taro Pharmaceuticals, needs to buy a bigger US company to attain critical scale, Shanghvi said in an interview on January 21. Sun, which owns about 77% of Detroit-based Caraco Pharmaceutical Laboratories, isn`t in takeover talks yet, he added. ``We are still a very small player in the US,`` Shanghvi said. ``We will have to look at a slightly bigger acquisition rather than at very small acquisitions that we have done in the past.``

IDFC may raise Rs 55 bn through ECB Infrastructure Development Finance Company (IDFC) will look to raise about Rs 55 billion through external commercial borrowings by March end this year, according to its senior director SJ Balesh. ``We are eligible to raise about 50% of the last year`s lending of Rs 110 billion through the ECB route. We would like to explore this option by March end,`` he said at a press conference here. IDFC would also explore others routes like loans and commercial borrowing for raising more funds. The company has announced the public issue of its second trance of secured, redeemable, long-term infrastructure bonds giving tax benefits under Section 80CCF of the Income Tax Act.

SAIL Chairman says -Committed to launching FPO by end of FY -Still studying timing for filing DRHP -FPO committee will take final call on I-Bankers by end of week

L&T to turn itself in 9 business verticals to be more competitive and offer a planned transition to senior management (ET)

Ispat allots 1.09 billion shares to JSW Steel

acquires 7.3% equity of Pioneer Distilleries at Rs 88.55/sh through open market

Bharti Shipyard mulls rights issue to repay its debt, currently having a total debt of Rs 2300 crore (DNA)

Mahindra group buys strategic stake in East India company

Karnataka Bank board fixes issue price for its rights issue in the ratio of 2:5 at Rs 85/share

Zee Learn board meet on 27th: proposal for consideration of Education Infrastructure assets.

Listing of Dalmia Bharat Enterprises post scheme of arrangement on 27th January

Hindustan Composite buy back at maximum Rs 550/share


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