Markets may open sideways amidst speculation over RBI’s policy stance

Morning Update 25thOct 2011

Opening Bias

The markets may open sideways in line with global cues amidst speculation looming over RBI’s policy stance expected today. The SGX Nifty is trading up by 22 points at 5149.5 indicating a gap up opening.

Corporate News

State-owned GAIL India today reported 19% rise in net profit to Rs 1094 crore for the quarter ended September 30, 2011 as against Rs 924 crore in the year-ago period on the back of higher gas trading volumes. Turnover was up 20% at Rs 9,699 crore. The surge was despite company's fuel subsidy pay-out rising from Rs 347 crore in Q2 of 2010-11 fiscal to Rs 567 crore in the current fiscal. Sales from petrochemical business were up 30% to Rs 938 crore, while revenue from natural gas trading soared 20% to Rs 7,575 crore. Revenue from natural gas transmission business was almost static at Rs 980 crore. While announcing the results the company’s management added that GAIL India was further planning to buy stakes in more shale gas assets in the United States.

State-run Power Grid Corporation, which is a central transmission utility, intends to go global as an investor and developer of the transmission system. As a beginning, Power Grid Corporation has proposed to form a joint venture (JV) in Bangladesh and Sri Lanka for the setting up of an associated transmission lines to transmit power within the respective countries from the proposed power project planned by India’s largest power generator NTPC. It entails an investment of Rs 1,500 crore. The company has also firmed up an investment plan of Rs 1 lakh crore to increase the inter-regional transmission capacity to 65,000 Mw during 12th Five-Year Plan from the 28,000 Mw in 11th Plan.

Leading Indian rice miller and exporter, KRBL is planning to boost operations in Africa, CIS countries and the UAE and is looking for distribution partners for the region. The company, which had total revenue of USD 317 million for the year ended March 31, said it intends to grow the business by 30 per cent over the next two years. According to sources, Rice traders from across West Asia, Africa and Asia are likely to visit Rice Dubai 2011, scheduled for November 3-5 in Dubai. The company is participating at the meet, and will scout for partners. KRBL, which exports basmati rice, is the owner of the India Gate brand. The company recently joined hands with Federal Foods for the distribution of its brands in the UAE.

Infosys, India’s second-largest IT services company has signed a memorandum of understanding with the Dalian High-tech Zone (DHTZ) in China, to establish a branch company of Infosys Technologies (China). The branch company will have its facility located in DHTZ with a sitting capacity of about 700 people and will focus on delivering consulting, technology and BPO services to its global clients, the Bangalore-headquartered company said in a release.

EdServ Softsystems Ltd, an education support services company based in Chennai, on Monday announced expansion of its mobile learning services through telecom service provider Tata DoCoMo. Through the tie-up, EdServ would offer test preparation content for Indian Institute of Technology-Joint Entrance Examination (IITJEE) and All India Engineering Entrance Examination (AIEEE) on Tata DoCoMos educational platform — Tutor on Mobile (TOM) service—across the country at Rs 5-10 per video.

Areva T&D, which is a part of Alstom Grid, has bagged an Rs 400 crore contract for 765 kv extra high voltage substation from Rajasthan Rajya Vidyut Prasaran Nigam Ltd, the company said on Monday. Areva T&D will design and build 765 kv turnkey substation including extra high voltage transformers and reactors near Kota. The scope of this contract also includes long term maintenance of the substation.

India’s largest information technology (IT) services firm, Tata Consultancy Services (TCS), on Monday announced Scotwest and Capital Credit Unions had chosen TCS BaNCS core banking as its IT platform to transform its infrastructure and address emerging opportunities in community banking in the United Kingdom. Cussco, the joint company set up by both these credit unions, would deploy the common platform and support its entire IT architecture throughout the UK.

Corporate Action