WEEKLY MARKET OUTLOOK :- 31-07-2009

Still, the short term sentiment is bullish…
With the help of Firm trend in global markets, short covering in F&O segment and
better than expected quarterly earnings, NIFTY extended gains of 1.76 percent in
the preceding week. Q1 earning announcement for most of the heavy weight index
stocks are almost over. The volumes appear to have taken the south path all
through the week largely aided selling by the foreign institutions in the futures and
options segment. On the Futures & Options front, the NIFTY August futures open
interest improved against previous week coupled with positive cost of carry
suggesting bullish signal. NIFTY August futures trading at a narrowing premium of
around 2-5 points against spot market over a couple of days.
The Put-Call ratio of
open interest slithered from 1.46 to 1.10 against preceding week as Call options
ruled the accumulation over the Put options. The implied volatility (IV) trend of Put
options indicates short build up in the beginning of the week and reversal towards
the end. The IV of Call options rose initially; however, the Nifty is restricted to move
around the 4700 mark reflected by the shorting of higher Call options. Considering
the above said factors, nothing is changed since last week, still the short-term
sentiment is bullish and if NIFTY sustains above 4693 levels we may see the rally
upto 4910 levels. The weekly key support is likely to be seen at 4530 and 4474
levels.

Post Market Analysis
Domestic market concluded the week in the positive terrain on account of sustained
buying. Favorable global cues, mainly from Asian markets contributed to the sharp
rally. The rollover of Nifty positions for July 2009 series stood at 69% versus 63%
last month while market wide rollover of positions was at 75% versus 77% last
series. 22

Lower newsprint costs boosted PAT: Deccan Chronicle

Deccan Chronicle Holdings declared its first quarter numbers for the financial year 2010. Its net sales came in at Rs 216.6 crore and its net profit stood at Rs 77 crore.
Speaking on the company’s results, PK Iyer, Managing Director of Deccan Chronicle said though the volumes were down on year-on-year basis, they were cautiously optimistic about the future. “Lower newsprint costs boosted net profit,” he added.

FY10 turnover seen at Rs 1000cr, PAT at Rs 50cr: Rico Auto

Rico Auto has announced its first quarter results. The company Q1 revenues were down 6.7% at Rs 180 crore versus Rs 193 crore. Its PAT was up at Rs 2.6 crore versus Rs 61 lakh. Its OPM was up at 11% versus 10.6%;

Arvind Kapur, Managing Director of Rico Auto Industries, said that he saw the FY10 turnover at Rs 1,000 crore. He added that they aimed to achieve a FY10 profit after tax (PAT) of Rs 40–50 crore and added that they were targeting an EBITDA margin of 15%. Kapur expects Rico Auto's revenues from Maruti to grow by 15–20%.

Nifty to touch 4850 if it crosses 4700: Ashwani Gujral

Ashwani Gujral, Technical Analyst, ashwanigujral.com, said if 4,620 levels could be maintained for half an hour, it could be a trending day which could finally take out 4,600-4,700 kind of zone and the Nifty can move towards 4,850. “If the gap holds for the first half hour, one can go ahead and buy,” advices Gujral.

Nifty can touch 5K in Aug series: Mangal Keshav

Nifty can touch 5K in Aug series: Mangal Keshav

Chinese mkt to see correction ahead: UBS

Polaris Q1 net down; biz volumes shifting offshore

ONGC advances 5%

Oil and Natural Gas Corporation, ONGC touched an intraday high of Rs 1,161.90 and an intraday low of Rs 1,095. At 11:30 am, the share was quoting at Rs 1,156.10, up Rs 56.55, or 5.14%.

It was trading with volumes of 262,237 shares. Yesterday the share closed up 0.12% or Rs 1.35 at Rs 1,099.55.

Block deals in Indiabulls Financial, stock up

Indiabulls Financial Services touched an intraday high of Rs 206.45 and an intraday low of Rs 197.80. At 12:09 pm, the share was quoting at Rs 200.15, up Rs 5.65, or 2.90%.

There were block deals of 20 lakh Indiabulls Financial shares on BSE and NSE at Rs 200.10 per share.

It was trading with volumes of 1,283,127 shares. Yesterday the share closed down 2.33% or Rs 4.65 at Rs 194.5.

Eventual plan to take mgmt control of Great Offshore: ABG

ABG Shipyard picked-up further stake in Great Offshore yesterday which took their stake up considerably, and subsequently, has upped their open offer price too.
Commenting on the issue, D Datar, CFO of ABG Shipyard, said that their stake in Great Offshore has gone up to 8%. He said the open offer price for Great Offshore has been revised to Rs 450 per share. However, he refused to comment if Punj Lloyd was a seller in the block deal.
Datar stated that the company’s eventual plan is to take management control of Great Offshore. He added that ABG Shipyard is ready to buy from parties willing to sell Great Offshore shares at Rs 450 per share.

NHPC IPO: $1.2bn proceeds to fund 11 projects

It will be the first public sector enterprise to tap the capital markets this year. National Hydroelectric Power Corporation (NHPC) has kicked off its road shows, as it looks to raise up to Rs 6,000 crore. Katya Naidu and Vidhi Godiawala report.
For the first time in its 34-year history, NHPC has 11 projects under construction. At the same time, it is looking at a USD 1.2 billion IPO to fund it. The company wants to double its capacity over four years.
SK Garg, CMD, NHPC, said, "By 2012, we will be commissioning almost 2,300 MW. Two projects will come in the first year of the 12th Plan, which will add another 2,000 MW. By 2013, our company will be something like 9,500 MW company."
The IPO is expected to raise Rs 6,000 crore at the higher end of the price band. Of this Rs 6,000 crore, around Rs 4,000 crore will accrue to the company, Rs 2,000 crore will go to the government for its 5% stake it is divesting.
At Rs 30-36 per share, the IPO is aggressively priced. Bankers hope the uptick in market sentiment and the government's credibility will make it a good bargain.
Vallabh Bhansali, Chairman, Enam Securities, said, "It is a unique company. It is in hydro power, it is a large company, financially very good, and not leveraged like other power companies. A lot of factors have gone into valuing this company."
Falguni Nayar, MD - Institutional Equities, Kotak Mahindra Bank, said, "We are hoping for a positive response because market is improving and investor appetite is improving."
S Vishwanathan, MD, SBICAPS, said, "This issue will be a forerunner for many more issues to come."
NHPC hopes its IPO will see the same strong subscription rush seen by Adani Power's IPO earlier this week, when it was subscribed 4 times on the very first day. Experts point out that NHPC's expansion is not the only thing that hangs in the balance. This IPO could well set the pace for future divestments as well.

Bullish on PSU banks, wary of realty: India Infoline

Sandeepa Arora of India Infoline said she was bullish on PSU banks that were still trading at 1-1.5 times price-to-book, but added that she was wary of the realty space

Market Round Up from Moneycontrol: More stock news. More stock advice. Top News Investors should shift to mid-tier FMCG cos: IDFC SSKI

Nikhil Vora, Managing Director, of IDFC SSKI, has advised investors to shift to mid-tier consumer companies. He expects midcap FMCGs to report higher sales growth than ITC and HUL.
With regard to United Spirits’ results, Vora said the company’s numbers were impressive and that it had addressed major concerns. He added the company’s balance sheet was strengthening and USL was no longer an expensive stock.

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Microsoft, Yahoo ink 10-year web search deal

New York: Microsoft Corp and Yahoo Inc inked a 10-year web search deal to better compete against market leader Google Inc but stopped short of combining their display advertising businesses.

Shares of Yahoo, which had risen in recent weeks in anticipation of this deal, fell more than 7 per cent in premarket trading, while shares of Microsoft edged higher.

The deal will boost Yahoo's annual operating income by about $500 million and yield capital expenditure savings of $200 million, the companies said in a joint statement on Wednesday.

Microsoft's Bing search engine will be the exclusive algorithmic search and paid search technology for Yahoo's sites, while Yahoo will be responsible for selling premium search ads for both companies.

Each company will maintain its own separate display advertising business and sales force, they said.

The deal combines the number two and number three players in the US market for Internet search and positions them to better compete with Google, which has an estimated 65 per cent share of the US search market.

Indian Airlines merger behind Air India's fin woes: Experts

Critics are blaming a mis-managed merger with Indian Airlines as the major reason for Air India's financial doldrums. ITC Chairman YC Deveshwar, who headed Air India in the 90s, told Tanvi Shuka and Vidhi Godiawala in an exclusive interview that he would have handled things differently.
Air India was not always flying through turbulent times. In 1993, under the leadership of ITC chairman YC Deveshwar, it was a profitable company -- among the top five globally.
Today, critics say the merger with Indian Airlines was mis-managed and ill-planned, and led to the airline's financial troubles. Deveshwar says he would have taken a different approach.
YC Deveshwar, Chairman, ITC, said, "I would have done it differently. I would have first created two divisions and then identified those areas where there are synergies. Definitely, I would have gone into getting the same genre of planes, so that the pilot training could be common. This strategy has to unfold, conceptualized much before you begin to buy planes as two different organizations."
Experts say the merger remained on paper, but was not implemented properly. Buying of planes, route planning as well as recruitment of pilots was not done on a consolidated basis. Deveshwar, who first suggested a merger during his brief stint at Air India, said that to compete internationally, the airline needed bulk in terms of fleet size, something the merger should have delivered on. But is he willing to go back and pilot the airline out of the mess?
"I would have done it differently. I won't take up that challenge again. I don't know what going on at the moment, so it not fair for me to comment," Deveshwar added.
With the Maharaja's fate hanging in the balance, experts are certain only someone who can cut across bureaucracy and unions can fly it back into the black.

Jet Airways owes Service Tax Department Rs260cr

Jet Airways owes Rs 260 crore to the Service Tax Department. Mint's PR Sanjai reports that no service tax had been paid on import of services for the past three years. Jet has now been asked to pay Rs 247.47 crore as tax for FY06-FY08, with interest. Jet Airways’ officials confirmed that they have received a show-cause notice from Service Tax Department.

Railways to issue Rs 2K cr tech deals; TCS, HCL in race

The Indian Railways has Rs 2,000 crore worth contracts in store including a deal earlier bagged by Mahindra Satyam. TCS, HCL are leading in the race for the bid.
Sources tell us that the Indian Railways has Rs 2,000 crore worth of IT deals on the block. We learn that Tata Consultancy Services (TCS) and HCL Technologies are the frontrunners for all of the deals. There were a large number of IT companies who had bid for a number of these projects but TCS and HCL are the frontrunners.
The first deal is a Rs 100 crore deal which is for the software development of locomotive management systems (LMS). This LMS contract was earlier bagged by Mahindra Satyam, but since Mahindra Satyam could not provide its financial details right now, the project was cancelled by the Indian railways.
Now, TCS and HCL, while they are the frontrunners for this bid, had not contended at all owing to the fact that it is Rs 100 crore deal.
The other deals that are on the anvil are larger deals. The second one is Rs 450 crore deal which is for a software aided train scheduling management systems which will allow real time train scheduling and management by the help of a software solution.
There are three other projects on the anvil, the first one is Rs 450 crore project and two others are worth Rs 500 crore each which would be coming up in next three-four months. The Indian Railways, however, could not comment on the perspective of the deals and company policies did not allow TCS or HCL to give comments on the same.

FMCG, pharma, auto, banks to lead next rally: Atul Suri

Trader Atul Suri believes the Nifty can cross 4,700 levels on the back of positive global trends. However, he was quick to add that the Nifty will take out 2009 highs. "Reliance Industries (RIL) and State Bank of India (SBI) were weak links for the Nifty."
Suri sees opportunities when short-term correction happens. He however, is not bothered about the China fall. “China is seeing correction after a big run.”

Vijay Bhambwani picks stocks you must own in your portfolio

Vijay Bhambwani of bsplindia.com. is bullish on Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) from the power space. “From the banking space, we like HDFC Bank and State Bank of India (SBI). We would also bet our money on Petronet LNG and Cairn India from the oil and gas segment,” he said.

Q: What do the charts indicate at the moment for a next seven-ten day scenario?
A: One aspect is that you need to take out that 4,693 high. That is acting like a dampener on the spirits because traders tend to look at their screens and see the previous resistance and this resistance is very fresh in their minds. You see a breakout above 4,693, good volumes, open interest going up on the long side in F&O. You can take out 4,800–4,850 in a short while because then you will be aided by short covering as well as fresh buying. On declines, 4,100 maybe, give or take 50 points here and there, would become a critical support level to watch out for. If 4,100 or 4,050 is violated on a closing basis, bulls will be on the defensive. Till then I would rather buy on dips then short sell at all.
Q: Can you construct a portfolio for somebody who has not bought anything right now and also for somebody who is already holding a portfolio and has made the gains from 4,100 or 4,200; a portfolio of just four-five stocks?
A: If you are long in the markets if you have a portfolio which has an exposure, fine, just hold on with it, sit on it and wait for 4,800–4,850. If you surge past 4,850, all the more better. Then 5,200-5,300 is what you are looking at. If you are in cash at this point in time, I think the power sector is looking extremely positive. I think Power Finance Corporation (PFC), Rural Electrification Corporation (REC); from the banking space HDFC Bank and State Bank of India (SBI) and from the oil and gas, I would go with Petronet LNG and Cairn India. These six stocks I would bet my money on.
Q: Just in terms of momentum and where you get more gains what would you pick SBI, Union Bank, Allahabad Bank, Punjab National Bank (PNB) or any public sector undertaking (PSU) bank, Infosys, Rolta, Bharti Airtel, Subex? These stocks are going fine but they are already sitting on top of the peak, do you need to go with them or do you need to go with the stocks that have still got momentum?
A: Given the choices that you have made, for example Infosys or Rolta, I would go with Infosys. I feel safe in a largecap. I don’t think these stocks fall as much as a Rolta would. So my choice would be SBI rather than Allahabad Bank or Union Bank, Infosys clearly over Rolta.
Subex is looking like it is making a rounding bottom formation but I would clearly go with Bharti Airtel at this point in time. I feel comfortable in largecaps, no question about it.

Stick to equities despite huge run up: BlackRock

Robert Doll, Vice-Chairman and Global CIO of Equities, BlackRock, said the economy was likely to emerge from recession given the better than expected earnings.
He added that equities were still a good place to be in despite the run up. "There’s cash on sidelines, which shows scepticism for upside." Doll sees the US housing market bottoming out.
Meanwhile, Nouriel Roubini, Chairman of RGEMonitor.com said that better macro and financial fundamentals relative to other emerging markets would be a plus for Asian economies and asset markets during the recovery. “The dependence of China and India on foreign capital will keep growth below full potential even in 2010.”
“In India, domestic consumption will ensure growth of around 5.7% but Indian companies will have difficulty accessing external capital and investors.”

Ambani case: Govt to modify SLP; SC to hear plea on Sep 1

Reliance Industries and the government have supported Reliance Natural Resources' plea for an early hearing, . This move comes after RNRL moved the apex court yesterday for an early hearing in the gas case. The Supreme Court said it will consider the plea and has asked parties to come back on September 1.
Mahesh Agarwal, Counsel for RIL, said that the government had taken back its SLP (special leave petition) for amendment. the government will submit a modified SLP to the court on Saturday.

Today, Reliance Industries and RNRLhad an early hearing on the RIL-RNRL gas dispute. The government and RIL have supported RNRL’s plea. Although the Supreme Court has refused to bring forth the September 1 hearing, they have told all parties to come back on September 1 and then they would consider the plea to bring forward the final hearing on the entire matter.
But the other big news coming out is that the government has for the moment withdrawn its special leave petition (SLP) on the matter. Disputing contradictory comments coming, we are still not able to confirm whether that SLP has been withdrawn for modifications or whether it has been withdrawn for good. We heard Mahesh Agarwal (RNRL Counsel) say from his knowledge that the SLP has been withdrawn for modifications. So, it may come back with some modifications, some changes, or some alternates being made to the earlier plea. We still don’t have clarity on that as the government has withdrawn its SLP in the RIL-RNRL case.
Q: At this point pending the next hearing when the Supreme Court will decide on final hearing date things are pretty much statusquo in the court?
A: Yes, things are pretty much status quo. The next date continues to be September 1. All that the court has admitted is that when the September 1 hearing comes up, if they feel a need to bring forward the final hearing to earlier than they were suppose to, they would consider it. But for the moment the next hearing is on September 1 and the government has withdrawn its SLP.

See Sensex floor at 12000-13000: Uday Kotak

The primary concern for the markets today is the supply of paper which is coming in. It started with qualified institutional placements (QIPs), followed by global depository receipts (GDRs). Now, initial public offerings (IPOs) are starting and of course there is a big disinvestment calendar from the Government of India as well. Can the market absorb this kind of paper and what is the disinvestment calendar going to look like going forward? How will that impact the markets as well?
Commenting on the same, Uday Kotak, Vice-Chairman and Managing Director, Kotak Mahindra Bank, said that the markets would absorb paper at reasonable prices from good companies. He said that the demand in primary markets would positively impact the sentiment as he considers them to be vehicles for sensible capital formation. Demand from primary market could stop secondary market exuberance as well, he said, adding, “Successful issues are good for primary market and the economy.” He said that one could expect a much higher Sensex floor than early March. He sees the Sensex floor at around 12,000-13,000 levels. "Markets are likely to be range-bound in the near-term but must stabilise in a reasonable range," he added.
Vallabh Bhanshali, Chairman of Enam Securities also believes that the primary and secondary markets needed to co-exist. “I think it’s a self balancing mechanism.” He said, capital raising had begun after a long time and therefore, companies starving for money were rushing to raise capital at all price levels. “The markets are pricing capital in a sensible manner,” he said.
He further added, India was one of the few countries getting allocations, and therefore, there was enough appetite for Indian companies to raise money

SBI Q1 net profit up 42% at Rs 2330 cr

SBI (State Bank of India) has announced its Q1FY10 numbers. Its net profit shot up 42% at Rs 2,330 crore as against Rs 1,640.8 crore.

The company's net interest income (NII) was up 4.32% at Rs 5,026 crore versus Rs 4,818 crore, YoY.
estimated net profit at Rs 2,020 crore and NII at Rs 4,984.8 crore.

Other income increased 49.29% to Rs 3,589 crore versus Rs 2,404 crore. Net NPA (non-performing asset) went up to 1.55% from 1.42% (YoY).

The company has made provisions of Rs 173 crore. NPA provisions stood at Rs 1,234 crore.

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Tech exports seen rising 4-7 pct in FY10

India's software and services exports are seen rising 4 to 7 percent in the year to March 2010, sharply slowing from past years' robust growth on sluggish demand for outsourcing services, an industry body said on Wednesday.

Export of software and back-office outsourcing services will rise to $48 billion to $50 billion in this fiscal year, up from $46.3 billion last year, the National Association of Software and Service Companies (Nasscom) said.

A Nasscom spokeswoman said the growth in percent terms was calculated before rounding off the target of $48-$50 billion.

The sector's export earnings grew 16 percent in the fiscal year ending March 2009, having grown by more than 20 percent in previous years.

Nasscom said in a statement the demand environment remained weak and global information technology spending was expected to fall further this year and next, with Indian companies facing pricing pressure.

India's export-driven outsourcing companies have thrived for years by winning contracts from overseas clients, helped by a large pool of English-speaking engineering workforce and cheaper wages.

But a downturn in the United States, which accounts for more than half of the sector's export revenue, and turmoil in the global financial sector have halted the scorching pace of growth.

Infosys Technologies, India's No. 2 software services exporter, has forecast its first annual revenue fall for the year to March 2010 as some of its overseas clients cutback on outsourcing and demand fee cuts in a tough business environment.

Sector leader Tata Consultancy Services, Infosys and third-ranked Wipro offer services such as system integration, application development, supply chain design and back-office services.
The firms face stiff competition from bigger global rivals such as IBM and Accenture in winning large outsourcing deals.

Nasscom said total revenue of the export-driven sector, which employs more than 2 million people, grew by 13 percent to $58.8 billion in the year to March 2009.

Tirupati to get Rs 2,223-cr facelift

The temple-town Tirupati will get a facelift with the Centre including it in the Jawaharlal Nehru National Urban Renewal Mission scheme.

The State-level Monitoring Committee of JNNURM today approved Rs 2,223-crore comprehensive City Development Plan for Tirupati, Urban Development Minister Aanam Ramanarayana Reddy said. Under the project, Tirupati would get underground drainage system, n ew parks and enhanced drinking water supply. The town will also get 50 modern buses to cater to the needs of pilgrims, the minister said.

India May ‘Reverse’ Rate Cuts as Food, Energy Stoke Inflation

India’s central bank may start reversing its interest-rate cuts in early 2010 as food and energy prices fan inflation, after it kept borrowing costs unchanged yesterday to bolster economic growth.

“On the way forward, the Reserve Bank will have to reverse the expansionary measures to subdue inflationary pressures while preserving the growth momentum,” Governor Duvvuri Subbarao said. Inflation may “creep up” to about 5 percent by March next year compared with an April estimate of 4 percent, he said.

India is vulnerable to inflation as it relies on imported oil and demand for food from its 1.2 billion people exceeds supply. The People’s Bank of China said yesterday that inflation may rebound in the second half, while Australia’s central bank said its economy may recover faster than anticipated from the worst global recession since the Great Depression.

“India may be the first one to raise rates,” said Chetan Ahya, a regional economist at Morgan Stanley in Singapore. “The wholesale price inflation that India looks at will be closer to 6 percent by March 2010.”

HSBC Group Plc economist Robert Prior-Wandesforde and Macquarie Group Ltd. economist Rajeev Malik expect interest rates in India to be raised from about April. Nomura Securities Co. economist Sonal Varma brought forward her forecast of a rate increase to January from April.

Besides being buffeted by higher global commodity costs, inflation in India is also fueled by congested roads and ports and power shortages that add to the cost of doing business.

Power Shortages

Almost every manufacturer in India including carmaker Honda Motor Co. has invested in power back-ups because of frequent outages. Peak power shortage for the year ending March 31 will widen to 12.6 percent from 11.9 percent a year earlier, according to the nation’s electricity regulator.

India’s key wholesale price inflation index, announced weekly, has been negative for the six weeks to July 11. The central bank said this was a “statistical effect” as prices included in the gauge rose faster in the same period last year.

Consumer-price inflation is running at between 7 percent and 10 percent, driven by high food costs, according to indexes that measure the cost of living for industrial and farm workers.

Goldman Sachs Group Plc and HSBC say the central bank’s 5 percent inflation forecast is conservative and was likely to be exceeded due to higher costs of oil, food and other commodities.

“We suspect inflation will rise faster, reaching 6 percent to 7 percent by March next year, and that this will prompt a relatively aggressive tightening of interest rates through 2010,” said Mark Williams, international economist at Capital Economics Ltd. in London.

Oil, Sugar

Crude oil, which India imports to meet three-quarters of its needs, has gained 53 percent this year.

India, the world’s biggest consumer of sugar, may need to import at least 4 million metric tons in the year starting Oct. 1 to meet a supply shortfall, said Bajaj Hindusthan Ltd., the nation’s biggest producer by capacity. India is importing the sweetener for the first time in three years and sugar prices are at a three-year high.

Palm oil, of which India is the biggest importer in the world after China, has gained 26 percent this year.

Indian policy makers are not alone in grappling with the prospect of accelerating inflation.

The Chinese central bank said yesterday that inflation may rebound this year, with the consumer-price index bottoming in the third quarter.

Asset Bubbles

China needs to end an excessively loose monetary policy that threatens asset bubbles, overcapacity, bad loans and resurgent inflation, He Fan, a senior researcher at the Chinese Academy for Social Sciences said in Beijing yesterday.

He cautioned that pumping up economic growth in the short term could lead to the nation’s recovery being followed by a second slump. CASS is a government-backed think tank.

China’s consumer prices fell 1.7 percent in June, the fifth straight decline and the biggest drop since 1999.

India’s Subbarao, while flagging inflation concerns, also raised the central bank’s growth forecast to 6 percent “with an upward bias.” That prompted economists to interpret the policy as switching its focus from growth to inflation.

“The RBI is becoming cautiously optimistic on the growth outlook and more concerned about higher inflation,” Varma from Nomura said.

For now, Subbarao said the central bank will continue to provide an “accomodative” policy because growth, constrained by weak global demand for exports and poor farm production on account of scanty rains, may start to revive only after October.

“The RBI statement gives more support to our view that the central bank will start hiking interest rates in early 2010, due to latent inflationary pressures and strengthening aggregate demand,” said Tushar Poddar, an economist at Goldman Sachs in Mumbai.

FDI slips by over 43% to around $2.2 billion in May

India's foreign direct investment(FDI) declined by over 43 per cent to around USD 2.2 billion in May, 2009, compared to USD 3.9 billion in the same period last year on account of global recession.

"FDI was around USD 2.2 billion in May," Department of
Industrial Policy and Promotion Secretary Ajay Shankar told
reporters on the sidelines of a seminar organised by
CII-Institute of Logistics. And "we think that liquidity is improving and confidence in the economy is rising. These numbers (FDI) should pick up," Shankar said.

The government had scaled down the FDI target by USD 5
billion from USD 35 billion last fiscal. Cumulative FDI from
April 2000 to March 2009 stands close to about USD 90 billion.

Thanks to robust trends in the first six months of the
last fiscal, FDI in 2008-09 was USD 27.3 billion against USD
24.5 billion in 2007-08

Sun Pharma Q1 cons net profit down Rs 163.8cr

Sun Pharmaceutical Industries has announced its first quarter results. Its consolidated net sales were at Rs 787.6 crore versus Rs 1,041.8 crore. Its consolidated net profit was at Rs 163.8 crore versus Rs 501.4 crore.

ArcelorMittal Posts $792 Million Loss, Raises Output (Update3)

ArcelorMittal, the world’s biggest steelmaker, posted a third consecutive quarterly loss and said it plans to restart some shuttered output as demand recovers.

The second-quarter net loss was $792 million, or 57 cents a share, compared with net income of $5.84 billion, or $4.19, a year earlier, Luxembourg-based ArcelorMittal said today in a statement. The loss, which included $1.2 billion of inventory writedowns and provisions for job cuts, missed the $336 million median of eight analyst estimates compiled by Bloomberg. The shares slid as much as 7.9 percent, the most in two months.

“The second quarter was another challenging period,” Chief Executive Officer Lakshmi Mittal said in a conference call. “We are beginning to see more positive signals.”

ArcelorMittal, whose share price advanced 47 percent in the quarter, said this month it was restarting blast furnaces in Ghent in Belgium, Florange in France, and Gijon in Spain as customers buy steel to replace depleted inventories. The company shipped 17 million metric tons of steel in the second quarter, 43 percent less than a year earlier.

The shares were 1.025 euros lower at 24.30 euros as of 12:25 p.m. in Amsterdam trading. Earlier, they had their biggest intraday drop since May 21.

Higher Shipments

ArcelorMittal said today the first half will be “the bottom of the cycle.” The demand outlook is still “uncertain,” U.S. Steel Corp., the largest U.S. producer, said yesterday. Sweden’s SSAB Svenskt Staal AB posted its first loss in eight years on July 27 and said third-quarter earnings will be weaker. European demand is unlikely to recover until “well into 2010,” Moody’s Investors Service said last week.

ArcelorMittal forecast earnings before interest, tax, depreciation and amortization of $1.4 billion to $1.8 billion in the third quarter. Average steel selling prices will be stable or slightly lower, it said. Shipments will be least 1 million tons higher than in the second quarter, Chief Financial Officer Aditya Mittal said.

“If all the steelmakers increase production we’ll be back where we started,” Charlie Dove-Edwin, an analyst at MF Global UK Ltd. in London who has a “sell” recommendation on the stock, said by phone today. “There’s not enough real demand out here and making more steel will just send the price down.”

Return to Profit

Analysts predict a return to profit in the quarter as demand recovers and prices increase. The cost of hot-rolled coil, a benchmark steel product used in cars and construction, gained 4.2 percent in the second quarter, the first such increase in a year, according to data compiled by Metal Bulletin.

ArcelorMittal said it achieved annualized fixed-cost cuts of $8.4 billion at the end of the second quarter. Sales declined 60 percent to $15.2 billion.

The steelmaker said July 17 there was a “positive outcome” to its request to lenders to amend terms on $31 billion of loan facilities. The ratio of debt to Ebitda on the company’s principal facilities will rise to 4.5 in December and will fall to 4 in June and 3.5 in December 2010.

ArcelorMittal spent $3.8 billion on acquisitions since the start of 2008, according to data compiled by Bloomberg, to gain greater control over supplies of iron ore and coking coal.

The company, formed by the takeover of Arcelor SA by Mittal Steel Co. in 2006, produced 101.6 million tons of steel in 2008, 7.7 percent of the world total of 1.32 billion tons, the World Steel Association said on its Web site.

NIIT April-June net 2.1 million rupees

NIIT (NIIT.BO: Quote, Profile, Research) said on Wendesday its April-June net profit was 2.1 million rupees, on the net sales of 1.24 billion rupees.

The comparative year-ago figures were not immidiately available.

Q1 RESULTS- Godrej, sterlite, cipla, hdil, pnb

GODREJ IND NET DOWN 68%
Consolidated net profit for Godrej Industries came in at Rs 16.4 crore (Rs 52.8 crore). Consolidated net sales stood at Rs 763 crore (RS 830 crore).

STERLITE'S NET FALLS 42%, SALES DOWN 21%
Low aluminium production saw Sterlite's net sales down 21% at Rs 4,537.11 crore (Rs 5,770 crore). Similarly net profit fell to Rs 924 crore (Rs 1,595 cr).

CIPLA NET SURGES BY 73%, SALES UP 13%
Cipla's profit went up by 73% to Rs 241.71 crore (Rs 140 crore). Net sales grew by 13% to Rs 1,325 crore (Rs 1,171 crore).

HDIL NET DIPS 66% AS SALES HALVES
HDIL's net profit declined 66% to Rs 107 crore as total income nearly halved to Rs 319 crore (Rs 601 crore).

PUNJAB NATIONAL BK NET ZOOMS 62%
Treasury gains and loan growth saw Punjab National Bank net profit zoom to Rs 832 crore (Rs 512 crore). Total income increased to Rs 6,175 crore (Rs 4,594 crore).

Microsoft, Yahoo in 10-year Web search partnership

NEW YORK (Reuters) - Microsoft Corp and Yahoo Inc inked a 10-year Web search deal to better compete against market leader Google Inc but stopped short of combining their display advertising businesses.

Shares of Yahoo, which had risen in recent weeks in anticipation of this deal, fell more than 7 percent in premarket trading, while shares of Microsoft edged higher.

The deal will boost Yahoo's annual operating income by about $500 million and yield capital expenditure savings of $200 million, the companies said in a joint statement on Wednesday.

Microsoft's Bing search engine will be the exclusive algorithmic search and paid search technology for Yahoo's sites, while Yahoo will be responsible for selling premium search ads for both companies.

Each company will maintain its own separate display advertising business and sales force, they said.

The deal combines the number two and number three players in the U.S. market for Internet search and positions them to better compete with Google, which has an estimated 65 percent share of the U.S. search market.

150 NH projects facing cost overrun: Kamal Nath

NEW DELHI: The Government on Wednesday said 150 National Highway development projects are facing cost overrun primarily due to delay in land acquisition, the Road Transport and Highways Minister, Mr Kamal Nath, informed the Rajya Sabha today.

The cost overrun were due to rise in prices of construction materials, delay in land acquisition, utility shifting and obtaining clearances from forest/environment, he said during Question Hour.

Poor performance of some contractors and law and order problems in some States were some other reasons. “There are huge cost overrun. These cost overrun are a matter of concern. Government is conscious of this,” he said adding structural efforts are bein g made to reduce cost overrun.

“I cannot say cost overrun will be eliminated but our endeavour is to see our cost estimates stay broadly within limits,” he said.

Admitting that cost estimates made by government agencies for road and highway projects were not accurate, he said “no policy has been made for fixing responsibility for this.” - PTI

SEBI bans over 350 entities in Alka Securities case

MUMBAI: SEBI has banned over 350 entities, including promoters of Alka Securities Ltd (ASL), from trading in securities with immediate effect on charges of manipulation of price and in the volume of shares traded of the stock- broking firm.

The market regulator has directed the National Securities Depository Ltd and the Central Depository Services (India) Ltd to freeze the beneficial owner accounts of the entities in the case of ASL.

The banned entities include ASL promoters Alka Pandey, Ravi Pandey, Mahesh Natvarlal Kothari, Anjuben Kothari, Brijesh Kothari, Dimple Kothari, Mahendra Pandey and Mayuresh Estate Agent.

In its preliminary findings, SEBI said the promoters used the off-market route to transfer the shares of the company to first level entities -- 42 in total -- which had either dealt in these shares on the Bombay Stock Exchange or transferred them to seco nd level entities -- 317 in all -- through the off-market route.

The second level entities had in turn dealt in the said shares at BSE, it said. Besides the ban on the promoters, first level and second level entities, SEBI in its interim order has directed BSE to inspect the stock brokers such as ICICI Securities, An and Rathi Financial and Motilal Oswal involved in the trade of ASL shares to ascertain the level of due diligence exercised by them. - PTI

MFs declare div before Aug 1 to woo investors

30 MF schemes declare div before Aug 1 to woo new investors
30 Mutual Fund schemes will declare dividends before August 1 to woo new investors. Investing in Mutual Funds before the date will ensue entry load. The move comes after SEBI scapped entry load effective from August 1.

Most funds have fixed July 24 deadline for dividend eligibility, while 10 funds have fixed July 31 deadline.

HPCL Q1 net profit at Rs 649 cr

HPCL (Hindustan Petroleum Corporation) has announced its Q1FY10 numbers. The company has reported net profit of Rs 649 crore versus loss of Rs 888.1 crore, YoY.

Net sales declined to Rs 24,198 crore from Rs 34,749.3 crore.

LIC grabs 62% market share; private insurers slip in negative

New Delhi: The country’s largest insurer Life Insurance Corp. (LIC) has increased its market share to 62% among life insurers in the first quarter of current fiscal, thereby growing by about 20%, compared to same period last year.

According to Irda figures, LIC mopped up Rs9,028.68 crore in the first quarter of the current fiscal compared to Rs7,524 crore during the same period last year.

The country largest insurer increases it market share to about 62% from about 52% during the first quarter of the last fiscal.

Overall, the life-industry grew by about 1% in the first quarter of the current fiscal, with the life insurance companies’ premium rising mildly to Rs14,456.34 crore against Rs14,320.21 crore during the same period last year.

However, the private life insurers registered a negative growth of about 25% during the first three months of the current fiscal.

The 21 private life insurers managed to mop-up Rs5,427.67 crore in the first quarter of the current fiscal against Rs6795.64 crore during the same period last year.

SBI Life, the country’s largest private insurer saw its premium decline to Rs1,072.73 crore in the first three months against Rs1,148.67 crore raised during first quarter of the last fiscal.

While, ICICI Prudential’s premium dipped to Rs807.07 crore against Rs1,590.27 crore in the first three months of the last fiscal.

Wockhardt to sell entire nutrition biz to Abbott

Deal may be worth Rs 625 cr, CDR divestment requirement met.
Wockhardt Ltd, which recently undertook a debt restructuring scheme, has signed an agreement to divest its non-core nutritional business to Abbott, a global healthcare company.

Sources said the deal was worth close to $130 million (Rs 625 crore). A Wockhardt spokesperson declined to confirm the size of the deal.

The company said the transaction was subject to customary closing conditions and various approvals, and would be closed in the second half of 2009.

The company’s nutrition business includes some of the major child care brands, such as Farex, Dexolac and Nusobee infant formulas, and Farex weaning cereal. The adult protein supplement, Protinex, is a segment leader in the vitamin and health supplement category.

Wockhardt had acquired Dumex India, along with its two products, Protinex and Farex, from Royal Numico NV of The Netherlands for an undisclosed amount in 2006. At that time, Protinex and Farex, both well-known nutrition brands in the country for over 50 years, had a combined annual sales of Rs 60 crore.

“At Wockhardt, we invested and nurtured to build a valuable brand equity for these heritage brands and it was time now for a specialised nutrition-focused company, as Abbott, to be able to leverage its full potential in the global markets,” said Wockhardt Chairman Habil Khorakiwala.

Wockhardt’s over Rs 3,400 crore debt was restructured by its lenders in June. As per the corporate debt restructuring (CDR) scheme, it has to divest its non-core assets at an estimated value of Rs 790 crore, within the next six years. It had already mobilised close to Rs 300 crore from the recent sale of its loss-making German subsidiary, Esparma, to Mova GmbH and the animal health division to Vétoquinol, a French veterinary care company.

With these sales, the company is likely to go slow on sale of other assets it had put on the block, including its plans of divesting the proposed stake sale of its hospital chain, as the CDR package approved by its lenders have taken care of the company’s immediate financial commitments.

The company is also looking at divesting a 32-acre dairy and milk processing unit in Punjab which the company inherited from its acquisition of Dumex India and part of 250 acres in Aurngabad. Wockhardt’s promoter, Habil Khorakiwala, was also planning to divest less than 26 per cent stake in Wockhardt Hospitals, which has 12 hospitals, for a valuation of Rs 800-1,200 crore. But the company may wait for more time to get good valuations, said sources.

Hero Honda achieves highest quarterly sales, surpasses a million mark

Riding on record million unit sales, Hero Honda, the world’s largest two-wheeler manufacturer, has reported its best ever quarterly earnings of all time. The company posted a net profit at Rs 500.11 crore, a rise of 83 per cent from Rs 272.87 crore in the corresponding period of the last year.
The company first time crossed its product sales surpassing one million mark at 11,18,987 units of two-wheelers thereby, generating a turnover of Rs 3822.44 crore, a rise of 34 per cent over Rs 2,851.04 crore in the corresponding period last year. The EBITDA margin of 17 per cent in the first quarter is a recorded high from the level of 12.23 per cent in the comparable quarter of the previous fiscal.

With over 59 per cent market share in the domestic motorcycle market and with sales of over a million units in the quarter, the robust topline growth has largely contributed to the strong bottomline performance. Several other key factors such as cost rationalisation across the board, softening of commodity prices, and tax benefits also contributed to the bottomline. The current quarter reflects a substantial tax benefit accrued on account of the company’s full utilisation of the tax benefits available for the Haridwar plant, which resulted in bringing down the overall tax rate.

The consistent robust topline performance has been driven by volume growth across segments and markets, aggressive brand building initiatives and rapid network expansion, reflecting the strong brands and continued expansion of new markets.

Most of the recent launches such as Passion Pro, Splendor NXG self-start, the special edition Hunk, the new Pleasure, in addition to the trusted Splendor plus and Passion Plus, have been share-and-volume drivers for the company. Hunk and CBZ X-treme continue to help build on Hero Honda’s steadily growing share in the premium segment.

LS adjourned thrice over Ambani brothers’ row

The Ambani brothers’ gas dispute echoed in the Lok Sabha today with some members demanding the resignation of petroleum minister Murli Deora, forcing adjournment of the house.

The Samajwadi Party members, led by president Mulayam Singh Yadav, demanded resignation of Deora over the government's failure to ensure supply of gas for the Dadri Power project in Uttar Pradesh.

Grave injustice is being done to Uttar Pradesh by denying gas to the Dadri Power plant and this in turn could cost the national exchequer Rs30,000 crore, Yadav contended.

Anil Ambani had yesterday hit out at the petroleum ministry for colluding with elder brother Mukesh's RIL in blocking gas supply for its power projects despite a firm commitment, upheld thrice by the Bombay High Court.

With SP members rushing to the Well of the House and creating an uproar, the House witnessed two adjournments till the lunch recess.

While Yadav or other SP members did not name the Ambani brothers nor the fight between them, the reference to Dadri project and resignation of the petroleum minister was indication enough of their plea.

The issue was raised by Yadav soon after the House met for Question Hour. He was highly critical of the petroleum minister and demanded a statement from the government on the issue.

Finance minister Pranab Mukherjee had yesterday called a meeting with Deora and law minister Veerappa Moily after Anil openly charged the oil ministry with siding with RIL to help it renege commitments on gas supply to NTPC and his group's firm RNRL.

The Supreme Court will on September one consider admissibility of a government petition seeking annulment of a gas supply pact between RIL-RNRL.

SP members Reoti Raman Singh and Shailendra Kumar demanded resignation of Deora.

When Yadav sought to raise the issue again after Question Hour, speaker Meira Kumar disallowed him telling the SP leader would not get another chance.

As SP members rushed to the Well, the speaker adjourned the House for 15 minutes. It was similar story when the House reassembled when Sumitra Mahajan was in the Chair. She adjourned the House till 2:00 p.m.

Sensex ends lower; realty, metals, FMCG, infra, banks dip

The Sensex ended lower on the back of fall in shares of metal, realty, power, capital goods, telecom and banking companies, after seeing a recovery of around 285 points from the day's low of 14,888.41. Volumes remained above the Rs 1 lakh crore for second consecutive day. The markets were extemely volatile ahead of July settlement on Thursday.

Equity benchmarks were flat for the first two hours of trade. But they saw sharp fall after 12 hours IST following more than 7.5% fall in Shanghai, which managed to show some recovery and ended with 5% loss on the back of sell-off in property and steel shares. Investors booked profits as they worried that banks may restrict lending to control risks that threaten on asset bubble. Chinese government also reduced gasoline prices.

Among the other Asian markets, Hang Seng fell 2.4%. Jakarta, Straits Times and Taiwan Weighted were down 0.5-0.8%. Nikkei and Kospi were flat.

However, the markets managed to show smart recovery post the European markets' positive opening, which rose 0.7-1.5%. The 50-share NSE Nifty saw recovery of 92.7 points from day's low of 4420.80, before closing at 4513.50, down 1.11% or 50.60 points. The 30-share BSE Sensex fell 158.48 points or 1.03%, to settle at 15,173.46. The Nifty July futures closed with 17.3 points discount and August futures with 5.5 points discount.

Sudarshan Sukhani of Technical Trends said, "Traders should be very careful and cautious, investors can as well wait for either 4,700 to be broken or for a deeper correction. These are volatile areas and not much is going to come out between 4,400 and 4,700."

The markets recorded highest turnover ever; total turnover increased 39% to Rs 1,47,352.24 crore as against Rs 1,05,933.55 crore. This included Rs 23,333.69 crore from the NSE cash segment, Rs 1,16,508.34 crore from the NSE F&O and the balance Rs 7,510.21 crore from the BSE cash segment.
The market breadth was negative; about 1,144 shares advanced while 1,639 shares declined on the BSE. Nearly 387 shares remained unchanged. The broader indices fell 1-1.5%.
All the sectoral indices ended in red barring Oil & Gas and IT. The BSE Realty Index underperformed other indices, fell 4.4%. The Metal and FMCG indices declined 2% each. Fall in property and metal shares in Chinese markets had some ripple effects on our markets as well.
In the realty space, HDIL, Omaxe, DLF, Ansal Properties, Parsvnath and Unitech were down 5-7%.
Metal stocks like Tata Steel, Sterlite Industries (revenues were below estimates while profit was better-than-expectations) and SAIL lost 4.57-5.8%. NMDC, Sesa Goa and Hindustan Zinc lost 2.4-2.9%. However, Jindal Steel was up 3.41%. Hindalco and JSW Steel were up 0.5-1.3%.

In the FMCG space, Nestle, United Spirits, United Breweries, HUL, ITC and Marico declined 1-5.5%.

Capital goods stocks like ABB, L&T and BHEL were down 1-4%. In the power pack, Suzlon Energy, Reliance Infrastructure, Lanco Infratech, Neyveli Lignite, GMR Infra, Reliance Power, NTPC and GVK Power lost 1-5%.

In the pharma space, Wockhardt, Sun Pharma (disappointing numbers for Q1FY10) and Glenmark were down 4-5.5%. Cipla, Biocon and Apollo Hospital slipped 1.4-2.9%. However, Ranbaxy Labs, Matrix Lab and Dr Reddys Labs were up 0.4-0.7%.

Banking stocks like Kotak Mahindra, Axis Bank, SBI and ICICI Bank went down 1-5.8%. HDFC Bank was down 0.51% while PNB surged 3.45% on good set of numbers for Q1FY10 (numbers were above estimates).

In the auto space, Tata Motors plunged 4.96%. Hero Honda, Bharat Forge, Bajaj Auto and Ashok Leyland lost 1-2% while M&M was up 2.31% and Maruti Suzuki gained 0.55%.

In the telecom pack, MTNL, Tata Teleservices, Reliance Communication, Idea Cellular and Bharti Airtel declined 1-3.5%.

In the oil & gas space, IOC, BPCL, Reliance Petroleum, HPCL and Reliance Industries were up 0.8-1.5%. However, GAIL and
Cairn India fell over 2.5%.

Among the technology stocks, TCS shot up 4.18% and Wipro up 0.58%. However, HCL Tech lost 2.42% and Infosys down 0.55%.

In the midcap space, Gujarat Gas, Deccan Chronicle, Kansai Nerolac, Balrampur Chini and Jubilant were up 6.5-14% while Amtek Auto, IVRCL Infrastructure and Reliance Industrial Infra fell 6.5-7.5%.

In the smallcap space, VIP Industries, TVS Motor, Goodricke Group, EIH Associated Hotel and Rico Auto gained 10-20% while Vishal Info, NIIT Tech, Marathon Nextgen, Oil Country and ABG Infralogistics slipped 8-19.5%.

At 14:06 hours IST - the Sensex continued to trade lower despite showing recovery over 250 points. The Nifty has recovered over 70 points from day's low. Realty, banking, metal, power, telecom, capital goods and FMCG stocks were still seeing selling pressure. There was a huge volatility.
However, Jindal Steel, which surged over 6%. TCS and PNB gained over 2%. Wipro, M&M, Maruti, BPCL and Ranbaxy Labs went up 0.5-1.5%. About 0.8-1.5% upside in European markets also helped in the recovery.

The Nifty was down 62 points, to 4,503 and the Sensex fell 193 points, to 15,138. The broader indices slipped over 1%.

In the largecaps, DLF, Sun Pharma, SAIL, Unitech and Tata Steel were down over 6%. Suzlon Energy, Axis Bank, Tata Motors, Sterlite Industries and Reliance Infrastructure fell 4-5.5%.

Cipla, ABB, Reliance Capital, Idea Cellular, Cairn India, L&T, GAIL, HUL, Reliance Communication, Hindalco, SBI, HCL Tech and ACC were down 2-3.7%.

The market breadth was negative; about 1000 shares advanced while 1754 shares declined on the BSE. Nearly 416 shares were unchanged.

Nifty trades sharply lower; Realty, Metal indices tank 4-5%

At 13:15 hours IST - the sell-off in metal, realty, infrastructure, banking, cement, telecom and FMCG stocks was putting pressure on the Nifty, which was trading below the 4500 level. The Sensex was hovering around the 15,000 mark.

About 5% fall in China's Shanghai and 3% slide in Hong Kong's Hang Seng weighed on our markets. Property and steel shares tumbled in Chinese markets. Chinese government cut gasoline prices. Investors worried that banks may restrict lending to control risks. Crude also slipped 2% below USD 66 a barrel.

The Sensex was down 289 points, to 15,046 and the Nifty fell 98 points, to 4,465. The market breadth was negative; about 264 shares advanced while 968 shares declined on the NSE. The broader indices lost over 2%.

All sectoral indices were in the red. The BSE Metal and Realty indices lost over 5%. Power, FMCG, Capital Goods and Bank indices fell 2-3%.

In the realty space, Omaxe, Parsvnath, HDIL, DLF, Unitech and Ansal Properties were down 6.7-9%.

Metal stocks like SAIL, Ispat Industries, Sterlite, Tata Steel, Hindalco, Gujarat NRE Coke and JSW Steel lost 5-7%. Sesa Goa, Jindal Steel, Welspun Gujarat, Hindustan Zinc, NMDC and Jindal Saw declined 2-4%.

In the power space, Suzlon Energy, Reliance Infrastructure, GVK Power, ABB, GMR Infra, Neyveli Lignite, Lanco Infratech, Reliance Power, NTPC, BHEL and Tata Power slipped 2-5%.

In the midcap space, Gujarat Gas, Carborundum, Kansai Nerolac, Birla Corp and Great Offshore were up 4.5-14% while Essar Shipping and Godfrey Phillip fell over 7%.

In the smallcap space, VIP Industries jumped 20%. EIH Associated Hotel, Revathi CP, Rico Auto and Hinduja Global were up 6-9.5% while Vishal Info, Oil Country, NIIT Tech, Action Construction and Kewal Kiran tanked 8-17%.

Sensex down 300 pts; HK, China down on asset bubble worries

At 12.36 hours IST - the Sensex was witnessing huge selling pressure following big slide in Asian markets. Shanghai Composite tanked 5% led by fall in property and steel shares. Chinese government cut gasoline prices. Hang Seng and Straits Times slipped 1.6-2%.

Shares of China Petroleum & Chemical and PetroChina fell in Hong Kong after China unexpectedly cut fuel prices. Sinopec slipped 3% while PetroChina lost 2%.

Realty, metal, telecom, FMCG, power and capital goods stocks were the major losers.

At 12.36 hrs IST, the Sensex was down 330.84 points or 2.16% at 15001.10, and the Nifty was down 102.95 points or 2.26% at 4461.15.

About 843 shares advanced, 1895 shares declined, and 432 shares were unchanged. Only three stocks - TCS, Ranbaxy and PNB were in the green on the Nifty.

In the largecaps, DLF was at Rs 395, down 7.3%; Tata Motors was at Rs 385, down 7.05%; Sterlite Industries was at Rs 611.25, down 7.03%; Reliance Infrastructure was at Rs 1,142, down 5.62%; Tata Steel was at Rs 443, down 5.53% and Unitech was at Rs 89.25, down 6.74%.

All sectoral indices were in the red. The BSE Realty Index tanked 7% and Metal Index fell 6%. Power, FMCG, Capital Goods, Bank, Healthcare and Auto indices were down 2-4%.

Nifty flat; banks, realty, metals dip, oil & gas, cement up

At 10:52 hours IST, the Nifty was extremely volatile in trade. Buying in oil & gas, telecom, cement and select auto stocks along with HDFC, TCS and Tata Power was supporting the markets.

However, selling continued in realty, metal and banking stocks along with BHEL, Infosys and Sun Pharma.

The Sensex was up just 7 points, to 15,339 while the Nifty fell 5 points, to 4,558. However, the broader indices were up 0.8% each. About 1604 shares advanced while 1087 shares declined on the BSE. Nearly 479 shares were unchanged.

Top gainers - M&M, ONGC, Hero Honda, TCS, Tata Power and Ranbaxy Labs were up 1.4-3%.

Top losers - Tata Motors, DLF, Sun Pharma, SBI, Tata Steel and Axis Bank slipped 1-3%.

Aban Offshore, Great Offshore, RNRL, Unitech, Tata Steel and Reliance Industries were most active shares on the bourses.

In the midcap space, Gujarat Gas surged 15.79%. Kansai Nerolac, Jubilant, Torrent Pharma and Patni Computer gained 5-7.5%. However, Godfrey Phillip, Everest Kanto, Monsanto India, HDIL and Gammon Infra declined 3-6%.

In the smallcap space, VIP Industries shot up 19.94%. TVS Motor, EIH Associated Hotel, Marathon Nextgen and Bliss GVS were up 10-12%. However, Gammon India, GSFC, Clariant, GMR Industries and Sundaram-Clayton lost 4.5-5.5%.

Sensex weak on negative Asian cues; metals dip

The Sensex opened weak on the back of negative Asian cues. Metal, realty, infrastructure and select banking stocks were under pressure. There was some volatility ahead of F&O expiry on Thursday.

At 9:56 am, the Nifty fell 32 points, to 4,531 and the Sensex slipped 102 points, to 15,229. The CNX Midcap declined 14 points, to 5,886 and the BSE Smallcap Index fell 10 points, to 6,235.

Among the frontliners, Cairn (ahead of numbers), Tata Steel (ahead of numbers), Suzlon Energy, DLF, SAIL, Tata Motors, ICICI Bank, HDFC, Jindal Steel & Power, SBI, Axis Bank, Sun Pharma (ahead of numbers), Wipro, Reliance Capital, Reliance Infrastructure, NTPC and Bharti Airtel were down 1-2.5%.

Cipla was up 2.4% and Hero Honda up over 1% ahead of Q1FY10 numbers. BPCL was up 1.7% on good set of numbers.

Maruti Suzuki, Ambuja Cements, GAIL and HUL were the other gainers.

Midcap space:

Kingfisher Airlines was up 4% on fund raising plans. Great Offshore rose 3%.

Gujarat Gas was up 1% as the company announced bonus and EBITDA numbers were good as well.

Balrampur Chini and Bajaj Hindusthan were also up.

Gammon India was down 7.5%.

GVK Power and Punj Lloyd were other losers.

Alembic shot up 6% on good numbers. Firstsource was up 3% as its numbers were ahead of estimates.

Maytas Infra and Mcleod Russel were up 3% each.

Global cues:

Asian markets were trading lower. Shanghai and Hang Seng fell 1.7% each. Straits Times and Taiwan Weighted declined 0.5% each. Nikkei and Kospi were flat in trade.

The US markets recovered from the day's low amid mix economic data. Commodities declined as USD rebounded.

The Dow Jones Industrial Average ended down 12 points at 9,097, after seeing recovery of 90 points from day's low of 9,007.

The Nasdaq Composite was up 7.6 points at 1,976, after seeing recovery of 28 points from day's low of 1,948 and the S&P 500 Index was down 2.5 points at 980, after seeing recovery of 10 points from day's low of 970.

Commodities:

The CRB Index was down 1%.

Crude declined 1.7% at $67.23/bbl.

LME metals index was down 1.2%.

Copper was down 1%, Nickel down 2%, Tin down 3% and Zinc down 2%.

Gold was down 1.7% at $938/ounce, at 1-week lows.

Baltic Dry index was up 2%.

Market cues:

-FIIs net buy USD 92.5 million in equity on July 27
-MFs net sell Rs 176.8 crore in equity on July 27
-NSE F&O Open Int up by Rs 1960 crore at Rs 96,180 crore
-FII turnover as a % of Total F&O turnover at 27.7% versus 17.6%
-FIIs net buy Rs 59 crore in cash markets on July 28 (Prov)
-DIIs net buy Rs 448 crore in cash markets on July 28 (Prov)
-FIIs net sell Rs 670 crore in F&O on July 28

F&O cues:

-Stock Futures add 51 lakh shares in Open Int
-Futures Open Int up by Rs 1171 crore and Options Open Int up by Rs 789 crore
-Nifty July Futures shed 26.7 lakh shares in Open Int
-Nifty Aug Futures add 41.4 lakh shares in Open Int
-Nifty Aug Futures at 10-pt premium versus 11-pt premium
-Nifty IVs at 34-37%
-Nifty Open Int Put Call Ratio remains at 1.31
-Nifty Puts add 7.7 lakh shares in Open Int
-Nifty Calls add 6.2 lakh shares in Open Int
-Nifty August 4500 Put adds 3.75 lakh shares in Open Int
-Nifty August 4600 Put adds 3.4 lakh shares in Open Int
-Nifty July 4600 Call adds 3.4 lakh shares in Open Int
-Nifty August 4600 Call adds 2.6 lakh shares in Open Int

RIL-RNRL gas row: Is govt at disadvantage by fixing price?

Anil Ambani made some dramatic comments at the Reliance Natural Resources Ltd (RNRL) annual general meeting (AGM) of shareholders on Tuesday calling the Petroleum Ministry’s stance partisan towards Reliance Industries (RIL) and RIL dishonourable.
“RIL’s dishonourable conduct in persistently refusing to honour the gas supply contract," Ambani said. "Secondly, the exorbitant profits RIL is seeking to make at the cost of the power and fertiliser sector in the country. Thirdly, the apparently-biased and partisan role of the Petroleum Ministry. RIL has tried every trick in the book and apparently several outside the book to back out of its solemn, legal and contractual obligations.”

Looking at full-year topline of Rs 1000cr: McLeod Russell

McLeod Russel has announced its first quarter results. The company's Q1 net profit was at Rs 31.2 crore.
Managing Director Aditya Khaitan, in an exclusive interview , said the company’s profit rose to Rs 31 crore from Rs 7 crore year-on-year and that the company was looking at a full-year topline of Rs 1,000 crore. Commenting on tea prices, he said, “We have had a good start at the beginning of the year and the prices went up due to the drought. We believe that these prices are here to stay, during the season the prices will come down depending on the supply of tea, but overall I still feel that if you compare period to period we would still be higher than the previous year.”

Gammon India faces 2-yr ban from DMRC; stock plunges

Gammon India touched an intraday high of Rs 145 and an intraday low of Rs 130.10. At 10:11 am, the share was quoting at Rs 140.85, down Rs 7.75, or 5.22%.

In the aftermath of Delhi Metro mishap that took place recently, Delhi metro chief E Sreedharan has said that Gammon India has taken off all contracts awarded to it. And the company may get blacklisted for 2 years,

It was trading with volumes of 498,689 shares. Yesterday the share closed up 4.46% or Rs 6.35 at Rs 148.60.

Hope to sell over 60000 vehicles in FY10: Ashok Leyland

Ashok Leyland announced its first quarter numbers for the financial year 2010. The company’s Q1 standalone net sales were down 51.6% at Rs 912 crore versus Rs 1,887 crore. Its standalone net profit was down 84.7% at Rs 7.7 crore versus Rs 50.6 crore, on year-on-year (YoY) basis.
Its operating profit margin declined to 1.5% from 6.4%. Loss before tax stood at Rs 31.33 crore versus an earnings before interest, taxes, depreciation, and amortization (EBITDA) of Rs 77 crore.
K Sridharan Chief Financial Officer, Ashok Leyland, said the market can expect new launches in the second half of 2009. “New launches and dealer tie-ups will drive growth going forward. Also, the bus segment will boost growth." He expects 10% volumes growth in FY10, while targeting over 60,000 vehicle sales.
Sridharan expects the company’s operating profit margin (OPM) to go back to 10-11% levels as he sees signs of sales pick up in the south on account of revival in the textile industry. "
The company, he said, is looking at generating Rs 400-500 crore from internal accruals. “We have not yet decided on whether to raise money via equity or debt.”

Shangai tanks 5%: Will global mkts see new lows?

The much feared Chinese asset bubble burst has finally happened. China's Shanghai Composite plunged 5% led by fall in property and steel shares. Indian and other Asian markets...

China's Shanghai Composite on Wednesday plunged 5% led by fall in property and steel shares. The Indian and other Asian markets mirrored this fall.
Moreover, the Chinese government also cut gasoline prices from today by CNY 220/ ton. Shares of China Petroleum & Chemical and PetroChina fell in Hong Kong after this unexpected cut. Sinopec slipped 3% while PetroChina lost 2%.

So, is this just an aberration or a precursor to a major correction across global markets? Experts delve deeper.
Kirby Daley, Senior Strategist at Newedge Group said that the effects of the Chinese market fall would not be a short-term affair. He fears that the global market would see lower lows again. “Emerging markets had gotten ahead of themselves with more inflows from foreign money which could prove to be hot in another risk aversion run and also in general there has been a pricing in of a sustainable commodity rally based on recovery of consumption by the end consumer which I don’t believe is there. I think emerging markets will be hurt when that reality is factored back in.”
Dariusz Kowalczyk, Chief Investment Strategist, SJS Market, said that the plunge in the Shanghai market today was driven by the fact that valuations had gotten ahead of fundamentals. “Some large investors decided that it is time to take profits.” The fall would definitely impact other markets. “Most global indices around the world will finish above current levels by the end of this year. Some emerging markets may actually still decline towards December and I would count both China and India. India I think will finish at 15,000.”
Andy Xie, Independent Economist said that China needed to understand the risks associated with its current policy. It is releasing liquidity to stimulate the economy, but unlike, the US which had a financial crisis, there was no similar situation in China and so, the liquidity doesn’t come out of the financial system. “What is going on in China is over-stimulating the financial markets. The impact on the real economy is limited. So, China might be doing what the US did during the subprime crisis. So, I think China needs to be careful. It should not go overboard in trying to do what the US has done.”

Don't expect rate hikes before Feb-Mar 2010: Morgan Stanley

Chetan Ahya, Managing Director, Morgan Stanley, does not expect rate hikes before February-March 2010. “We do not see rate hikes in the near term. However, the RBI could hike interest rates by February-March 2010.”
However, he did not rule out the possibility of the RBI changing its cash reserve ratio (CRR) or the market stabilisation scheme (MSS) before changing policy rates. “A potential hike in CRR is possible by the last quarter this year.” He believes, lending rates can fall by 25-50 basis points.
He expects industrial production to reach 7-8% by March 2010. “Industrial growth can offset a slowdown in agriculture.”
Morgan Stanley, he said, maintains a GDP forecast of 6.2% for FY10. ”However, he sees an upside risk to the forecast.”
According to him, the traction from monetary and fiscal policy was better than expected.

RNRL serves notice to Oil Min, RIL in gas dispute

A day after Anil Ambani called Reliance Industries (RIL)
dishonourable, and the Petroleum Ministry partisan at Reliance Natural Resource’s AGM, he said his company had served notice to the Oil Ministry and RIL with regard to the gas dispute. He requested the Supreme Court to set September 1 as final hearing in the tussle.
Ambani said the RIL-RNRL gas dispute affects public interest as it has bearing on projects of 12,000 MW capacity. He went on to say that they seek an early resolution of the ongoing gas dispute.
He hopes the Oil Ministry will agree to expedite settling of the gas row and believes the ministry is being misguided by RIL.

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Reliance Life seeks govt nod for floating early IPO

Wishing to hit the market with
an initial public offer for its life insurance business, an
Anil Ambani group firm has approached the government to waive
off the ten year clause for an insurer to go public.

Reliance Life has requested the Finance Ministry to allow
it to launch IPO before completion of the 10-year operation
clause, official sources said.

The 6AA provision of the Insurance Act, specifies that
Indian promoters having more than 26 per cent shareholding
shall after 10 years reduce it in some appropriate manner or
within such period the central government may decide.

Citing the above provision, the insurance sector
regulator IRDA has already shot down the proposal of the
Reliance Life to hit the capital market.

"They (Reliance Life) had come to the regulator to seek
the permission and we have found that we are not empowered to accord any such thing before 10 years," IRDA Chairman J Hari Narayan had said.

When contacted Reliance Capital spokesperson declined to
comment on the matter.

Reliance Capital, the holding company of Reliance Life,
last week said that it plans to come up with an initial public
offer for its life insurance business or go in for a strategic
stake sale.

At Reliance Capital's Annual General Meeting recently,
ADA Group Chairman Anil Ambani said he was considering various
options to unlock value of the life insurance business-- "from
a potential IPO to strategic or financial stake sale, or even
a combination of both-- subject to necessary approvals."

"A final decision in this matter will be taken shortly,
driven by the sole objective of maximising returns for our
shareholders," he had said.

Since the past four years the company's life insurance
business has grown rapidly, and has emerged amongst the top
four private life insurance players in India.

Reliance Life Insurance registered 65 per cent growth of
policy-holders' funds under management to Rs 5,895 crore in
2008-09 from Rs 3,555 crore in FY'08.

During FY'09, eight new life insurance policies were launched by the company.

Sprint to buy Virgin Mobile USA

NEW YORK (Reuters) - Sprint Nextel Corp said it will buy Virgin Mobile USA in a deal that values the equity of the small wireless carrier at $483 million, including Sprint's current 13.1 percent stake.

Sprint, the No. 3 U.S. mobile service, also agreed to retire all of Virgin Mobile USA's outstanding debt when the deal closes, which is expected in the fourth quarter of 2009 or in early 2010. It said it expects Virgin Mobile's debt to be no more than $205 million net of cash and cash equivalents by Sept. 30.

Virgin Mobile's public shareholders will receive Sprint shares equivalent to $5.50 per Virgin Mobile share, subject to a collar of 1.0630 to 1.3668 Sprint shares per Virgin Mobile share. The price is a 31 percent premium over Virgin Mobile's closing price of $4.21 on Monday.

Virgin Mobile shares jumped to $5.20 in premarket trading on Tuesday. Sprint shares rose to $4.60 from their close at $4.55.

IBM to buy SPSS for $1.2 billion in cash

International Business Machines Corp plans to buy technology services company SPSS Inc for about $1.2 billion in cash, the companies said on Tuesday.

SPSS shareholders will receive $50 a share, a 42 percent premium to Monday's closing price of $35.09 on Nasdaq.

Chicago-based SPSS provides predictive analytics software and services. Predictive analytics are used by companies to forecast future trends and spot shifts in consumer patterns, helping them control costs and use resources more wisely.

IBM said the deal will help expand its Information on Demand software portfolio and business analytics capabilities.

Shares of SPSS jumped 41 percent in premarket trade to about $49.50. The shares had already enjoyed a gain of about 30 percent this year.

The deal values SPSS at about 25 times analysts' estimated 2010 earnings per share, and the $50 per share price represents an all-time high for the stock, topping its previous all-time top of $47.87.

The deal is subject to SPSS shareholder approval and regulatory clearances, and is expected to close later in the second half of 2009, the companies said.

Separately, IBM said it has acquired closely-held Ounce Labs Inc, whose software helps companies reduce the risks and costs associated with security and compliance concerns. Financial terms were not disclosed.

Back in May, IBM's chief financial officer, Mark Loughridge, told the Reuters Technology Summit that the valuations of potential acquisition targets were attractive. IBM has spent $20 billion buying more than 100 companies since 2000, paying prices that range from as little as $50 million to as much as $5 billion.

J&K CM Omar Abdullah resigns over sex scandal

PDP leader alleges J-K CM involved in Srinagar sex scandal
Srinagar: Jammu and Kashmir Chief Minister Omar Abdullah on Tuesday offered to resign from the post after a senior PDP leader alleged that he was involved in last year's sex scandal.

"I know it is a false allegation. But I want to resign till I am cleared of this false allegation. I cannot work till I am proved innocent. It is a blot on my character,” Abdullah said.

"Any amount of investigation by the home department will not help. Till I am able to prove my innocence, I am going to give my resignation to the Governor," Abdullah told the State Assembly, a statement that shocked his party MLAs and Ministers.

The MLAs and Ministers physically restrained the Chief Minister from leaving the Assembly but Abdullah walked out.

He was virtually forced to take his seat by the ruffled members but he got up to shout at them saying "allow me to take this first step".

The whole drama began when PDP leader and former Deputy Chief Minister Muzaffar Beig levelled the allegation that Abduallah was involved in the infamous Srinagar sex scandal.

He claimed he had a list of people involved in the scandal in which Abdullah's name figured.

Congress in-charge of state Prithviraj Chavan has spoken to Omar Abdullah asking him not to resign as it was a trap to get him out of office, party sources said.

Chavan has also spoken to Omar's father Farooq Abdullah so that he stops him from resigning, they said.

Congress President Sonia Gandhi and her political secretary Ahmed Patel are also likely to talk to Omar to urge him not to go ahead with his threat to quit, the sources said.

Maruti produces 1 lakh KB-series cars in 10 months

Maruti drives out one lakh KB-series cars in 10 months
Within 10 months of starting production of its KB-series engines, the country's largest car maker, Maruti Suzuki has rolled out over one lakh of these units that power the two small cars, A-Star and Ritz.
Riding on the success of this new fuel-efficient technology, Maruti Suzuki India (MSI) has planned to incorporate KB-series engines in other existing as well as new models.

"The company's Gurgaon plant has produced over one lakh KB-series engines, which are installed in the two small cars A-Star and Ritz since its commercial production began in October last year," a company spokesperson said.

When asked about MSI's future strategy to roll out more KB-series engine cars, the official said, "We have definite plans to gradually introduce this next generation light-weight fuel efficient engine series in other models over a period of next 3-5 years."

He, however, declined to name the model next in line after A-star and Ritz which will be powered by the KB-series engine.

The company produces Bharat Stage-III, Bharat Stage-IV and Euro-V emission norms compliant KB-series engines. It produces two different petrol engines, 1 litre (A-Star) and 1.2 litre (Ritz), from the fully integrated engine manufacturing facility, located at MSI's Gurgaon plant.

According to the Automotive Research Association of India (ARAI), A-Star gives a mileage of 19.6 km per litre, while Ritz runs 17.7 km for every litre of petrol.

MSI has so far exported over 50,000 units of Euro-V compliant A-Star, sold as Suzuki Alto in Europe. It also supplies A-Star to another Japanese car maker Nissan under a contract manufacturing agreement with Suzuki. Nissan sells the car in Europe as Pixo.

The engine facility with a production capacity of 2.4 lakh units per annum was a part of the Rs 9,000 crore investment plan announced in 2007 by Suzuki Motor Corp, MSI's parent.

Air India sold 21 aircraft for $452 mn: Patel

Air India sold 21 aircraft for $451.88 million during 2007 to 2009, Union Civil Aviation Minister Praful Patel said today.
"Seventeen aircraft were sold on 'sale and lease back' basis whereas, four aircraft were sold on 'as is where is' basis," Patel said in a written reply to a Rajya Sabha query.

He said that the national carrier has leased 46 different types of aircraft from various companies across the globe and was paying a monthly rent of $18.945 million.

Air India's leased aircraft fleet includes different types of Boeing and Airbus airplanes.

"The average monthly expenditure of Air India before depreciation and obsolescence is about Rs 1,500 crore," the minister said replying to another question.

Patel said that Air India was taking various steps such as rationalising of routes, return of leased aircraft, reduction of contractual employment and employees at foreign offices and establishing international advisory boards to cut down its overhead costs.

In reply to another query, he said that 304 bird hit cases were reported during 2008.

Shriram Transport NCD issue subscribed over 8 times

The non-convertible debentures (NCDs) issue of Shriram Transport Finance has received a good response from the investors and mopped up nearly Rs 4,500 crore in just a day's time.
According to market sources, the NCD issue received good response from qualified institutional buyers and the high net worth individuals with both the segments getting over subscribed.

The public issue of NCDs, which started yesterday for raising Rs 500 crore with an option to retain over-subscription of up to Rs 500 crore would close on August 14.

Shriram Transport Finance, a leading asset financing NBFC, would use the funds raised for its capital expenditure, working capital requirements, or repay its existing loans, and for various financing activities, including lending and investments, subject to regulations.

The company is a part of the Shriram conglomerate that has a significant presence in financial services. The group is also present in non-financial services business such as property development, engineering projects and information technology.

Over 250 irrigation projects worth Rs 1.5 lakh cr pending

Over 250 irrigation projects worth Rs 1.5 lakh cr pending
More than 250 irrigation projects in the country worth over Rs 1.5 lakh crore, some of them initiated more than five decades ago during the Second Five Year Plan, are yet to be completed.
Hundred major and 156 medium irrigation projects have been tagged as "delayed" in the 11th Five Year Plan, Ministry of Water Resources said.

"The total latest estimated cost of the projects is Rs 1,55,469.93 crore of which Rs 98,442.18 has been incurred till 10th Plan (anticipated)," the ministry said in reply to an RTI application by Mumbai-based activist Chetan Kothari.

Normal gestation period for completion of projects is taken as 15 to 20 years for major projects and 5 to 10 years for medium projects, the ministry said.

"Accordingly, the major projects started during or before 8th Plan which have been continuing as ongoing in 11th Plan may be considered as delayed projects," the ministry said in its reply.

The data provided by the ministry shows two major projects to be continuing since Second Five Year Plan (1956-61) while seven projects, six major and one medium, started during the Third Five Year Plan (1961-66) are also pending.

The data shows 37 major and 32 medium projects were started during Fifth Five Year Plan (1974-78) while 27 major and 27 medium ones that started between 1980 and 1985 are also pending.

The reply said more than 3,000 centrally assisted minor irrigation projects are yet to be completed.

"Central Loan Assistance under Accelerated Irrigation Benefit Programme (AIBP) was introduced in 1996 to provide financial assistance to the states to expedite completion of surface water major and medium projects. From 1999-2000 the scope of AIBP was extended to include minor irrigation schemes also," the reply said.

"Since inception of AIBP for minor irrigation projects, a total number of 9,863 minor irrigation schemes with a combined total estimated cost of Rs 7264.088 crore have been taken up in the states up to April 28 of which 6,615 minor irrigation schemes have been completed up to March 31. Thus 3348 MI are ongoing schemes," it said.

In India, irrigation projects are classified as major (covering culturable command area more than 10,000 hectare), medium (CCA between 2,000 and 10,000 ha), and minor (CCA below 2,000 ha).

The source of water in major and medium schemes is surface water while the dominant source in minor schemes is ground water.

NHPC IPO: First issue of state-run firm in 17 months

State-run power company NHPC today said it plans to raise up to Rs 6,048 crore through sale of shares in a price-band of Rs 30-36 in an IPO — the first by a PSU after the UPA assumed office for a second term.

This is also the first stake sale by a state-run company in 17 months after REC went public in February 2008 to raise over Rs 1,600 crore.

"We have decided a price band of Rs 32-36 for the IPO," NHPC Chairman and Managing Director S K Garg told a news channel.

The issue will open on August seven and close on August 11. The company would sell 168 crore shares comprising of five per cent stake divestment of the government and infusion of 10 per cent fresh equity.

The company plans to raise between Rs 5,040 crore and Rs 6,048 crore from its IPO.

The public issue is also the by a government-run entity since the September 2008 global financial meltdown. There have, however, been five issues by private sector companies.

Adani Power IPO over subscribed 4 times in an hour

The initial public offer of Adani Power got subscribed nearly four times the shares on offer within an hour of start of the book building process today.

The issue received bids for over 94.91 crore shares against 24.87 crore shares on offer, as per the data available on the National Stock Exchange. The company has fixed a price band of Rs 90-100 per share and most of the bids came in at Rs 95.

Adani Power, the electricity generating unit of Adani Enterprises, plans to raise Rs 3,610 crore at the upper end of the price band and Rs 2,715 crore at the lower end. This is the first issue wherein anchor investors, strategic investors for whom biddi ng process is carried out one day before the issue opens, have participated. As many as 13 anchor investors, including Credit Suisse, Sundaram BNP Paribas, T Rowe Price and CLSA, subscribed to the IPO at Rs 95 per share, the data showed.

Market regulator SEBI last month allowed new class of entity -- anchor investors -- to pick up a maximum of 15 per cent of the total IPO size.

Reliance Power to raise over Rs 20k cr to fund projects

Anil Ambani group company Reliance Power plans to raise over Rs 20,000 crore in the current fiscal to finance various projects, including the 4,000 MW Krishnapatnam ultra mega power project (UMPP).

"We are on course to raise Rs 20,000 crore of debt this
fiscal, having made significant progress in getting appraisals and sanctions for our Krishnapatnam UMPP," Reliance Power Chairman Anil Ambani told shareholders at the company's annual general meeting held here today.

The company had raised a similar amount of debt in FY'09
as well.

"We will continue to focus on identifying and participating in bids (to develop more projects)," he said.

Reliance Power would expedite the commissioning of its
projects ahead of schedule, Ambani said, adding that "we are
seeking to advance the commissioning of the Sasan project by
almost three-years."

The power from the Sasan project would be sold to consumers at a levelised tariff of Rs 1.19 per kwh for 25 years, he said.

Reliance Power has bagged three of four contracts for
developing UMPPs in the country.

"Our present portfolio of over 33,000 MW in the next
seven to eight years averages to almost 5,000 MW every year.
Of this, we propose to commission nearly 3,000 MW by 2012. The pace of commissioning will pick up considerably after that and we should be on course to bring on-stream the remainder of our thermal projects by the middle of the 12th Plan," Ambani said.

On the Rosa project, Ambani said that the 600 MW Phase
I of the project (located in Uttar Pradesh) is running ahead
of schedule. "We expect to finish it before end-this year."

"This means that we will commission the project in
less than three years time," he said.

With respect to the implementation of Rosa Phase II,
Ambani said that the company expected it to be up and running before the end of the 11th Plan.

On the 4,000 MW Chitrangi project in Madhya Pradesh,
Ambani said, "We have secured bid to supply 1,200 MW of power to the Madhya Pradesh Power Trading Company Ltd at a levelised tariff of Rs 2.45 per unit of electricity.

"As for the balance, we will tie-up a portion of the
capacity through long-term PPAs while reserving a substantial part for merchant sale."

On hydro power, Ambani said that the actual capacity
created so far was only 37,000 MW or 25 per cent of the
country's total installed capacity.

The company has bagged four hydro power projects, he
said.

"We have bagged four hydro power projects -- Mulin,
Emini, Mihundon and Kalai with a total capacity of 2,500 MW
from the Arunachal Pradesh Government. We now have over 4,000 MW of hydro projects in our portfolio -- these will bring jobs and development to the North-East," Ambani said.

BPCL posts Q1 net profit at Rs 614 cr

State-run Bharat Petroleum Corporation Ltd today reported a net profit of Rs 614.12 crore for the first quarter ended June 30, 2009.

The company had a net loss of Rs 1,066.7 crore in the
same quarter last year, BPCL said in a filing to the Bombay
Stock Exchange (BSE).

The total income has decreased to Rs 26,195.6 crore in
the latest quarter, against Rs 3,9297.7 crore in the same
period last year.

Shares of BPCL were trading at Rs 459 on the BSE, up 1.91
per cent from the previous close.

Grasim Q1 net up 110% at Rs 1,080 cr

Grasim Q1 net profit up 110% at Rs 1,080 cr
Grasim has announced its first quarter FY09 results. The company's net profit was up 110% at Rs 1,080 crore versus Rs 514.2 crore. This includes gain of Rs 336 crore from sponge iron sale.

Its net sales were at Rs 5080 crore versus Rs 4395 crore.

According to estimates, the company's standalone PAT (profit after tax) was seen going up 3% at Rs 530.2 crore from Rs 514.19 crore. Standalone revenues were expected to go up 12% at Rs 2,894.3 crore versus Rs 2,592.33 crore.

HUL Q1 net down nearly 3% at Rs 543.19 cr

FMCG major Hindustan Unilever Ltd (HUL) on Tuesday reported a fall of 2.69 per cent in its first quarter net profit at Rs 543.19 crore as against Rs 558.18 crore during the corresponding period last fiscal.

The company, however, reported a growth of 7.77 per cent in its net sales at Rs 4,475.68 crore during the quarter ended June 30, 2009 as compared with Rs 4,152.84 crore during the same period last year.

The company's domestic FMCG business grew by 12.80 per cent during the period under review to Rs 4,148.66 crore as against Rs 3,677.92 crore during the first quarter last year.

HUL's home and personal care segment reported sales of Rs 3,405.82 crore during the first quarter, registering growth of 11.87 per cent over the figure of Rs 3,044.53 crore reported during the same period of last fiscal. Its foods segment business jumpe d by 17.28 per cent to Rs 742.84 crore during the quarter ended June 30, 2009 compared with Rs 633.39 crore reported during the corresponding period last fiscal.

In the exports segment, the company registered a significant fall of 34.72 per cent to Rs 255.58 crore for the first quarter as against Rs 391.51 crore during the same quarter of 2008-09. HUL's other income also fell by 14.35 per cent to Rs 71.44 crore during Q1 of this fiscal compared with Rs 83.41 crore during the same period of last fiscal.

TCS loses Rs 250 cr UGC e-governance project

UGC cancels Rs 250 cr E-governance project bagged by TCS
University Grants Commission cancels the Rs 250 crore E-governance project bagged by TCS in March. Project was to make UGC processes paperless.

This move as we learn was due to funding and internal conflicts in UGC. Now the project is to be broken in phases- Rs 40-50 crore per phase.

Various IT companies to be called for bidding. TCS, HCL, Wipro and Patni most likely contenders

TCS says UGC has sent communication on re-tendering of contract. TCS will bid for individual projects once tender is open

Delhi Metro mishap: Gammon India faces ban

The Delhi Metro Rail Corporation’s Action Taken Report was submitted to Urban Development Minister Jaipal Reddy on Tuesday.

The report, by a four-member expert committee probing Delhi Metro Rail Corporation's worst accident on July 12, which killed six people, says construction giant Gammon India faces a two-year ban from construction for two years and a show cause notice has been slapped on them.

If Gammon fails to reply to the notice, it will be blacklisted.

The report also says three DMRC engineers have been suspended and the design consultants have been blacklisted for five years.

Structural design engineers Tandon Constructions have been barred for three years.
DMRC says independent consultants will be hired for further construction.

“Design consultants will be blacklisted for five years, Tandon Consultants, the structural consultants to be debarred for two years. M/s Gammon India will be given a show cause to be blacklisted for two years,” Reddy said in Parliament.

Gammon has refused to comment, says will react only after going through the DMRC report.

The metro rail deadline remains 2010.

The committee headed by A K Nagpal of the Indian Institute of Technology-Delhi probed the collapse of an under-construction beam meant to support the elevated rail track connecting central Delhi to Badarpur in the south of the Capital.

In the last 10 years, more than 69 people have lost their lives in various metro accidents but none of them have received compensation packages as per the Workmans' Compensation Act of 1923.

The DMRC set up a labour welfare fund in 2003, but lawyers say it seems that this was done to evade civil liability.

Till date, the DMRC has been lauded for completing most projects before stipulated deadlines but statistics show that it needs to do a lot more to uphold the safety and concerns of its employees.

Investment Strategy: Buy JK Lakshmi Cement Ltd.- Price Target: Rs 158

We are recommending a Buy on JK Lakshmi cement with a price target of Rs.158.

Investment Highlights


Topline up by 30.20%: Net sales for the Q1FY10 increased by 30.20% to
Rs. 350.81 Cr compared to Rs. 269.43Cr during the corresponding quarter
previous year. This is on the back of 11% increase in production and 14 %
growth in despatches.


Net profit increased by 102.87%: The company posted a robust growth
in its profit to Rs.78.49 Crores for Q1FY10 an increase of 103% (YoY).
This is mainly on the back of higher realizations.


Increase in operating margin: The operating margin of the company
improved to 34% in Q1FY10 from 24% in Q1FY09. Lower fuel, power cost
and higher realizations resulted in improved operating margins.


Full year performance: For the full year FY09 the company saw a 10%
growth in its topline to Rs.1223.90crores (YoY). The bottomline of the
company saw a decline of 25% to Rs.175.27 Crores due to increase in
input cost particularly in fuel cost.


Capacity addition to drive volumes: The production capacity of the
company increased from 3.65 million tpa to 4.75 million tpa in FY09, an
increase of over 30%. The full capacity will be on stream during FY10,
which will add to the higher volumes.


Greenfield expansion: The company is setting up a green field cement
plant at durg in the state of chattisgarh, with an annual capacity of 2.7
million tonnes and is expected to be commissioned by 2011.


Captive power plant to save cost: The company is setting up a waste
heat recovery power plant with an estimated outlay of Rs. 125 crore. The
project is aimed to generate 12 mw of power and it will be commissioned
by March 2011.Further the company is also planning to set up 18 mw
power plant at sirohi. Both the above-mentioned capacity along with
existing capacity will take the total capacity of the company to 66mw.This
will minimize cost for the company.
Valuation

We expect a stronger topline and bottomline growth on the back of improved
demand, higher price realization, capacity expansion and savings from captive
power plant. At the CMP of Rs. 131.55, JK Lakshmi is trading at 3.03x its TTM
earnings. We recommend a BUY on the stock with a (3-6 month) price target of
Rs.158.

Industry: Cement
Price Data
Current Price (Rs) 131.55
52 wk range (Rs) 133.00-31.00
Stock Data
Mkt Cap (Rs Cr) 804.82
No. of shares o/s(Cr) 6.118
Free float (%) 54.49

Key Indicators
TTM EPS (Rs) 43.39
PAT Margin (%) 22.37%
Code
NSE JKLAKSHMI
BSE 500380
Reuters JKCR.BO
Bloomberg JKLC.IN