Markets may witness negative opening
Srujani Panda / 18 Oct 2011
Opening Bias
The markets may witness a negative opening in line with global cues. The SGX Nifty is trading down by 42 points at 5,080, indicating a gap down opening. Overnight, the US stocks declined sharply after Germany played down the idea of a quick fix for the European crisis and an index of regional manufacturing fell short. Asian markets are also seen trading in the red on concerns that Germany and other European powers won’t be able to formulate any fresh action to deal with the sovereign debt crisis in time for the next week’s summit.
Back home, with the Q2FY11 earning season coming close we recommend our readers to closely watch the management commentary at the time of the announcement of the Q2 September 2011 results, which will provide cues on futures’ earnings outlook. In conclusion, we expect the markets to remain volatile for the day, as the forthcoming Q2 results season may give rise to market speculation on the outcome of individual company results. Also, there are concerns over the health of the Euro zone debt crisis.
Corporate News
India’s largest software services exporter, TCS, has reported a rise of 2.47 per cent QoQ in net profit of Rs 2,439 crore for the quarter ended September 2011. The company had posted net profit of Rs 2,380.3 crore in the previous quarter. Net revenues jumped by 7.75 per cent to Rs 11,633.5 crore from Rs 10,797 crore QoQ. The numbers came below an analyst’s estimates for net profit at Rs 2,450 crore and revenues at Rs 11,750 crore. The net profit margins declined by 107 basis points at 21 per cent as against 22 per cent QoQ. The operating profit rose by 11.6 per cent to Rs 3,154.3 crore during the same period and the operating margins went up by 94 basis points at 27.1 per cent.
Mortgage lender HDFC Ltd posted a 20 per cent rise in net profit for the quarter ended September led by higher income from operations and profit on sale of investments. HDFC said its net profit increased to Rs 971 crore from Rs 808 crore a year ago. Income from operations rose to Rs 4,077 crore from Rs 2,907 crore in the year ago period. Its loan book also increased by a fifth to Rs 1,27,000 crore as of September 30 which was in line with its management’s guidance. Going forward, the lender expects demand for home loans to be helped by rising incomes in the burgeoning middle-class and a low penetration of housing loans in Asia’s third-largest economy.
Trissur-based South Indian Bank’s net profit for the quarter ended September 2011 rose by more than 24 per cent YoY to Rs 95 crore on the back of higher loan book growth. This is the highest ever net profit the bank has recorded in a single quarter. Its net interest income was up by 31.4 per cent YoY at Rs 259 crore and its loan book expanded by 30 per cent YoY to Rs 23,348 crore. Deposits too grew at 32 per cent to Rs 33,038 and its CASA (current account and savings account) rose by nearly 18 per cent to Rs 7,038 crore.
The Bangalore-based private sector lender ING Vysya Bank today reported 53 per cent rise in net profit at Rs 115.4 crore in the July-September quarter, driven by higher net interest income (NII) and lower provisioning. The bank had reported Rs 75.26 crore net profit in the corresponding quarter last fiscal. The total income of the bank rose by 31.66 per cent to Rs 1,095.53 crore as against Rs 832.05 crore reported in the year ago period, while its net interest income increased by 19 per cent to Rs 303.6 crore in the reporting quarter. The net interest margin (NIM) stood at 3.35 per cent.
IT & product engineering services firm MindTree Ltd posted consolidated net profit of Rs 55 crore for the second quarter showing a whopping 135 per cent YoY growth and 58 per cent sequentially QoQ growth. The stock was already up by 1.92 per cent yesterday. The company has 270 active clients, including 43 global Fortune 500 firms and it also has increased its base customers with USD 5 million of revenues. The company also added 1,478 software professionals on a gross basis, which is a good sign of its financial health. It also declared an interim dividend of 25 per cent or Rs 2.50 per equity share of Rs 10 par value.
Reliance Power yesterday reported that it has paid over Rs 1,474 crore to redeem overseas bonds expiring today. The company has paid the principal amount of USD 299.90 million corresponding to Rs 1,474.93 crore due on foreign currency convertible bonds (FCCBs). With some of the debt from its balance-sheet removed and no equity dilution, we believe this will be a positive factor for the stock. The stock was marginally up yesterday.
Employees’ unions of Coal India Limited (CIL) today withdrew their proposed three-day strike after the management agreed to give higher bonus along with Rs 1,000 as Diwali gift - a development that may avert a possible power crisis in the country. CIL has reached an agreement with the workers’ unions to pay a higher bonus (Rs 20,000) to each worker instead of the earlier announced amount of Rs 17,000, besides Rs 1,000 as Diwali gift. The unions were earlier demanding for a minimum bonus of Rs 23,500 per employee. As per the latest developments, the workers have committed to meet the year end production target of 451 MT despite the first half shortfall for the fiscal.
JSW Energy has started full commercial operations at its 1,200 MW Ratnagiri thermal power plant, besides resuming operations at its Barmer power project. The company has started commercial operations of the fourth unit with 300 MW capacity at the Ratnagiri plant in Maharashtra. The commissioning of the Ratnagiri power plant comes at a critical time when the country is facing a power shortage. JSW Energy’s aggregate generation capacity is 2,330 MW.
Moser Baer Clean Energy Limited (MBCEL), the solar power generation arm of Moser Baer Projects P Ltd (MBPPL), is looking to set up 200 megawatt (MW) solar power capacities in India over the next one year with 95 MW to be set up in Gujarat and plans to tap the capital markets to raise funds for the same. MBPPL has laid out ambitious plans to make heavy investments in the clean energy vertical of its operations as it intends to set up nearly 1,500 MW of solar power generation capacities in India by 2015.
Maruti has resumed partial operations at its plant in Manesar with some trained workers from among the striking workers. The positive news comes after 11 days of production loss. The Gurgaon plant has also begun normal operations. There has been no production at MSI’s Manesar plant since the workers went on strike in October, while the company had shut the Gurgaon plant on October 14 and 15 as engines and transmissions supply had been severely hit by the strike at SPIL.The stock was trading at Rs 1,053.05, up by 2.39 per cent yesterday. We expect some positive news on this stock today.
The Orissa State Pollution Control Board (OSPCB) has ordered a shutdown of the four sponge iron units of Bhushan Power and Steel Ltd (BPSL) situated at Rengali in Sambalpur due to environmental damage concerns. It has also directed a shutdown of the company’s roller mill and ordered immediate curtailment of electricity supply to the unit. The action against BPSL on Monday was taken after the pollution regulator received an unsatisfied response from the company, according to sources. BPSL currently operates a 2.3 million tonne per annum integrated steel and power plant in the state including a 376 MW power plant, a coal washery, two CSP plants, a blast furnace, a coke oven plant, a sinter plant, an oxygen plant and a steel making and lime and dolomite plant, besides a cold rolling mill and eight sponge iron units, each with a capacity of 500 tonnes per day.
IPO Listing
TAKSHEEL SOLUTIONS IPO (AVOID)
FLEXITUFF IPO (AVOID)
The markets may witness a negative opening in line with global cues. The SGX Nifty is trading down by 42 points at 5,080, indicating a gap down opening. Overnight, the US stocks declined sharply after Germany played down the idea of a quick fix for the European crisis and an index of regional manufacturing fell short. Asian markets are also seen trading in the red on concerns that Germany and other European powers won’t be able to formulate any fresh action to deal with the sovereign debt crisis in time for the next week’s summit.
Back home, with the Q2FY11 earning season coming close we recommend our readers to closely watch the management commentary at the time of the announcement of the Q2 September 2011 results, which will provide cues on futures’ earnings outlook. In conclusion, we expect the markets to remain volatile for the day, as the forthcoming Q2 results season may give rise to market speculation on the outcome of individual company results. Also, there are concerns over the health of the Euro zone debt crisis.
Corporate News
India’s largest software services exporter, TCS, has reported a rise of 2.47 per cent QoQ in net profit of Rs 2,439 crore for the quarter ended September 2011. The company had posted net profit of Rs 2,380.3 crore in the previous quarter. Net revenues jumped by 7.75 per cent to Rs 11,633.5 crore from Rs 10,797 crore QoQ. The numbers came below an analyst’s estimates for net profit at Rs 2,450 crore and revenues at Rs 11,750 crore. The net profit margins declined by 107 basis points at 21 per cent as against 22 per cent QoQ. The operating profit rose by 11.6 per cent to Rs 3,154.3 crore during the same period and the operating margins went up by 94 basis points at 27.1 per cent.
Mortgage lender HDFC Ltd posted a 20 per cent rise in net profit for the quarter ended September led by higher income from operations and profit on sale of investments. HDFC said its net profit increased to Rs 971 crore from Rs 808 crore a year ago. Income from operations rose to Rs 4,077 crore from Rs 2,907 crore in the year ago period. Its loan book also increased by a fifth to Rs 1,27,000 crore as of September 30 which was in line with its management’s guidance. Going forward, the lender expects demand for home loans to be helped by rising incomes in the burgeoning middle-class and a low penetration of housing loans in Asia’s third-largest economy.
Trissur-based South Indian Bank’s net profit for the quarter ended September 2011 rose by more than 24 per cent YoY to Rs 95 crore on the back of higher loan book growth. This is the highest ever net profit the bank has recorded in a single quarter. Its net interest income was up by 31.4 per cent YoY at Rs 259 crore and its loan book expanded by 30 per cent YoY to Rs 23,348 crore. Deposits too grew at 32 per cent to Rs 33,038 and its CASA (current account and savings account) rose by nearly 18 per cent to Rs 7,038 crore.
The Bangalore-based private sector lender ING Vysya Bank today reported 53 per cent rise in net profit at Rs 115.4 crore in the July-September quarter, driven by higher net interest income (NII) and lower provisioning. The bank had reported Rs 75.26 crore net profit in the corresponding quarter last fiscal. The total income of the bank rose by 31.66 per cent to Rs 1,095.53 crore as against Rs 832.05 crore reported in the year ago period, while its net interest income increased by 19 per cent to Rs 303.6 crore in the reporting quarter. The net interest margin (NIM) stood at 3.35 per cent.
IT & product engineering services firm MindTree Ltd posted consolidated net profit of Rs 55 crore for the second quarter showing a whopping 135 per cent YoY growth and 58 per cent sequentially QoQ growth. The stock was already up by 1.92 per cent yesterday. The company has 270 active clients, including 43 global Fortune 500 firms and it also has increased its base customers with USD 5 million of revenues. The company also added 1,478 software professionals on a gross basis, which is a good sign of its financial health. It also declared an interim dividend of 25 per cent or Rs 2.50 per equity share of Rs 10 par value.
Reliance Power yesterday reported that it has paid over Rs 1,474 crore to redeem overseas bonds expiring today. The company has paid the principal amount of USD 299.90 million corresponding to Rs 1,474.93 crore due on foreign currency convertible bonds (FCCBs). With some of the debt from its balance-sheet removed and no equity dilution, we believe this will be a positive factor for the stock. The stock was marginally up yesterday.
Employees’ unions of Coal India Limited (CIL) today withdrew their proposed three-day strike after the management agreed to give higher bonus along with Rs 1,000 as Diwali gift - a development that may avert a possible power crisis in the country. CIL has reached an agreement with the workers’ unions to pay a higher bonus (Rs 20,000) to each worker instead of the earlier announced amount of Rs 17,000, besides Rs 1,000 as Diwali gift. The unions were earlier demanding for a minimum bonus of Rs 23,500 per employee. As per the latest developments, the workers have committed to meet the year end production target of 451 MT despite the first half shortfall for the fiscal.
JSW Energy has started full commercial operations at its 1,200 MW Ratnagiri thermal power plant, besides resuming operations at its Barmer power project. The company has started commercial operations of the fourth unit with 300 MW capacity at the Ratnagiri plant in Maharashtra. The commissioning of the Ratnagiri power plant comes at a critical time when the country is facing a power shortage. JSW Energy’s aggregate generation capacity is 2,330 MW.
Moser Baer Clean Energy Limited (MBCEL), the solar power generation arm of Moser Baer Projects P Ltd (MBPPL), is looking to set up 200 megawatt (MW) solar power capacities in India over the next one year with 95 MW to be set up in Gujarat and plans to tap the capital markets to raise funds for the same. MBPPL has laid out ambitious plans to make heavy investments in the clean energy vertical of its operations as it intends to set up nearly 1,500 MW of solar power generation capacities in India by 2015.
Maruti has resumed partial operations at its plant in Manesar with some trained workers from among the striking workers. The positive news comes after 11 days of production loss. The Gurgaon plant has also begun normal operations. There has been no production at MSI’s Manesar plant since the workers went on strike in October, while the company had shut the Gurgaon plant on October 14 and 15 as engines and transmissions supply had been severely hit by the strike at SPIL.The stock was trading at Rs 1,053.05, up by 2.39 per cent yesterday. We expect some positive news on this stock today.
The Orissa State Pollution Control Board (OSPCB) has ordered a shutdown of the four sponge iron units of Bhushan Power and Steel Ltd (BPSL) situated at Rengali in Sambalpur due to environmental damage concerns. It has also directed a shutdown of the company’s roller mill and ordered immediate curtailment of electricity supply to the unit. The action against BPSL on Monday was taken after the pollution regulator received an unsatisfied response from the company, according to sources. BPSL currently operates a 2.3 million tonne per annum integrated steel and power plant in the state including a 376 MW power plant, a coal washery, two CSP plants, a blast furnace, a coke oven plant, a sinter plant, an oxygen plant and a steel making and lime and dolomite plant, besides a cold rolling mill and eight sponge iron units, each with a capacity of 500 tonnes per day.
IPO Listing
TAKSHEEL SOLUTIONS IPO (AVOID)
- Listing Date: Wednesday, October 19, 2011
- BSE Scrip Code: 533639
- NSE Symbol: TAKSHEEL
- Listing In: ‘B’ group of securities
- ISIN: INE889I01011
- Issue Price: Rs 150 per equity share
- Face Value: Rs 10 per equity share
FLEXITUFF IPO (AVOID)
- Listing Date: Wednesday, October 19, 2011
- BSE Scrip Code: 533638
- NSE Symbol: FLEXITUFF
- Sector: ‘B’ group of securities
- ISIN: INE060J01017
- Issue Price: Rs 155 per equity share
- Face Value: Rs 10 per equity share
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