Friday, 13 October 2017

13 October 2017 - Views & News


Bharti Airtel: Tata Tele to merge consumer mobile business with Bharti Airtel – Positive
Tata Sons will sell its consumer mobile business to Bharti Airtel virtually nil equity value. Bharti Airtel will absorb Tata's consumer mobile business in 19 circles and the merger is being done on debt-free, cash-free basis. The deal will bolster Airtel’s spectrum pool with additional spectrum in the 1,800, 2,100 and 850 MHz bands, all widely used for 4G. Bharti and Tata Tele will together control over 28% of the total spectrum available to telecom service providers, and that will bring them on a par with the Idea-Vodafone’s share across the country.

NBCC: May acquire three other government-owned entities - positive in long term  
NBCC  Ltd may acquire three other government-owned entities to create a mega construction company, in line with the push for consolidation among public sector firms. The three that the NBCC could acquire include Engineering Projects (India) Ltd, Hindustan Prefab and Hospital Services Consultancy Corporation (India) Limited (HSCC). The government has already invited expressions of interest (EOI) from similarly placed central public sector enterprises (CPSEs) for strategic sales in HSCC and National Projects Construction Corporation Ltd. The government is looking to sell its entire stake in all these companies. Recently NBCC has taken over Hindustan Steel Works Ltd. We believe the takeover of these units would be long term positive.

ITC, Godfrey Phillips: Industry reports suggest that cigarette sales will continue to be under pressure in India due to regulatory hurdle – sentimentally negative for ITC and Godfrey Phillips…(details in other news)


ITC, Godfrey Phillips: Industry reports suggest that cigarette sales will continue to be under pressure in India due to regulatory hurdle – sentimentally negative for ITC and Godfrey Phillips
Cigarette sales volume will continue to be under pressure in India with government's tough anti-smoking initiatives and a thriving grey market, as per the latest industry report by Euromonitor International. The report indicates that the sales volume declined by 4% last year and poised to decline at a CAGR of 3% till 2021 whereby the market will fall below 72.6 billion sticks per annum by then from 84.9 billion sticks per annum in 2016. The decline last year was mainly due to further enforcement of regulations across states where it was not previously strictly managed, increase in taxation and implementation of stringent graphic health warnings covering 85% of the pack as compared to 40% of front of the pack earlier. 

PLNG: plans to invest in manufacturing of batteries for electric vehicles and charging infrastructure as per media reports; neutral read through as currently market for electric vehicle is at nascent stage in India
Petronet LNG (PLNG): Plans to invest in manufacturing of batteries for electric vehicles and also build charging infrastructure at fuel stations of Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp as per the media reports. We do not see any impact on PLNG in near to medium term as currently the market for electric vehicle is at nascent stage in India. Any development on the PLNG’s plan would depend upon government’s initiative to promote use of electric vehicles and resultant change in auto fuel consumption mix in the country in the long term – neutral read through for PLNG.   

Eicher Motors: Two wheeler divison (Royal Enfield) enters Vietnam market to boost exports; positive read thru   
Expanding its footprints in international markets, Royal Enfield announced its entry into Vietnam, the world’s fourth largest two wheeler market. Royal Enfield has partnered with Al Naboodah International (VN) as its official dealer in the country. Initially the company will sell its Bullet 500, Classic 500 and the Continental GT 535 cc.  As per the company, it endeavours to reinvent and lead the global mid-size motorcycle segment, and South-East Asia is a critical market for its global strategy. Currently exports contribute about 3% of overall volumes and entry into new markets will boost export volumes

L&T: plans to bid for more ONGC work after Daman win
L&T expects ONGC to finalise 3-4 projects worth around Rs 5,000 crore before March and would be bidding for them. Recently they have bagged order from ONGC worth Rs1150crore and expects to book revenue in FY2018. L&T's hydrocarbon order book is worth over Rs 20,000 crore of which 65 per cent is from international market, primarily the Middle East.

Shriram EPC: The company bagged two orders aggregating Rs349 crores. The first order amounting Rs311 crore from Bihar Urban Infrastructure Development Corporation involves improvement of water supply system to be executed over 42 months. The second order amounting Rs38 crore from Karnataka Urban Infrastructure Development & Finance Corporation for development of water supply system to be executed over 24 months while O&M component extends up to 8 years post completion. Positive for the stock.

Thursday, 12 October 2017

12 October 2017 - Views & News


 Markets are expected to open mildly positive. However, the pullback, which lasted for last few sessions, looks done at yesterday’s high of 10067. Even the short term momentum indicator has completed the pullback cycle & can start a new cycle on the downside. Loss of momentum on the way up was evident from consecutive Doji formations over last couple of sessions. On the downside 9950-9930 is an immediate support zone with overall short term target at 9500.

Nifty Spot Levels

Support 9950 – 9881 – 9775
Resistance  10020 – 10073 - 10137


Dow +42.21 pts ,Nsdq +17.73 pts , S&P +4.60 pts Bovespa -237 pts , Ftse -4 pts , Dax +21 pts , Cac -1 pts , Crude @ $51.11 brl (-0.19), Brent @ $56.69 brl (+0.03) , Gold @ 1295.30 (+6.40), Silver @ $17.226 (+0.09), Euro @ $1.1865, JPY @ $112.4500, INR @ $65.185


• Wall Street stocks rose on Wednesday as the minutes from the Federal Reserve's September policy meeting merely confirmed expectations that interest rates would rise, while the euro gained on the dollar after Catalonia held off on moving to independence.
• Currency investors pushed the dollar to a two-week low against a basket of currencies, as they also eyed signs of inflation concerns at the Fed.
The Fed minutes showed policymakers in a prolonged debate about the prospects of a pickup in inflation and the path of future interest rate rises if inflation did not rise.
• The Dow Jones Industrial Average rose 42.21 points, or 0.18 percent, to 22,872.89.

Today's Corporate Action 12th Oct Ex Date

AREYDRG Stock  Split From Rs.10/- to Rs.1/-
CANFINHOME Stock  Split From Rs.10/- to Rs.2/-
KALLAM Bonus issue 1:4
KARURVYSYA Right Issue of Equity Shares 
TALBROSENG Bonus issue 1:1


ALERT-Sun Pharma: Sun pharma’s Dadra facility (inspected in April 2017 and had received 11 observations) gets Establishment Inspection Report (EIR) – Positive for Sun Pharma; Dadra is second largest plant after Halol; No financial impact however it highlights management’s efforts and focus  to get manufacturing compliance in place. Focus shall now be on Halol re-inspection which is due in near term (remediation measures at Halol are over). Following this positive development, we shall review our rating and come out with a detailed note.

Jewellery: Industry is expecting a 20-30% increase in sales in the upcoming Diwali / wedding season as the market sentiment has become positive after government decided to do away with KYC requirement for cash purchase of gold of Rs 50,000 – positive for Titan, PC Jewellers and TBZ etc. 

Agri: Government rolls out DBT for fertiliser subsidy in 7 states/UTs – Positive for Fertilizer companies….(details in other news)

Agri: Monsanto settles GM cotton dispute with three Indian seed firms – Positive for Kaveri Seeeds….(details in other news)


Oil & Gas: The Cabinet has approved signing of Memorandum of Cooperation (MoC) with Japan for liquefied natural gas for co-operation in facilitating flexibility in LNG contracts, abolition of destination clause and in exploring possibilities of cooperation in establishing reliable spot price – Sentimentally positive for gas utilities like GAIL and Petronet LNG.

Bajaj Auto: launched the new Platina Comfortech in the commuter segment priced at Rs 46,656 - Positive
Bajaj auto has launched the new Platina Comfortech, which is an upgraded version of the earlier Platina. The new motorcycle features LED daylight running lamps and a redesigned analogue instrument cluster. Platina Comfortech makes 7.9PS and a torque of 8.3Nm and claims to return a fuel efficiency of over 100kmpl. The Platina also gets electric start and alloys as standard making it an even more attractive offering at the sub-50k price tag. The motorcycle is priced at Rs 46,656 (ex-showroom Delhi) and competes with the Hero HF Deluxe, TVS Sport, Honda CD 110 Dream and the Yamaha Saluto RX.

Ashok Leyland: Andhra Pradesh government grants State GST reimbursement for 10 year period for the company’s green field plant to be set up – Positive read thru
Ashok Leyland has been granted a 10 year reimbursement for the State GST for its green field plant to be set up in Andhra Pradesh. The company has plans to set up body building and chassis assembly line for buses and medium and heavy commercial vehicles at the new plant with an investment of Rs 135 crs. The company would invest Rs 90 crore in the first phase involving bus body building operations and Rs 45 crore in the next phase for body building and chassis assembly line for MCVs and HCVs. Positive read thru  

L&T: enters into definitve agreement with ESAB Holdings for divestment of entire stake in EWAC Alloys for a consideration of Rs 522 crores ; positive
L&T has entered into definitive agreement for divestment of entire stake in its subsidiary EWAC Alloys for a consideration of Rs 522 crores with ESAB Holdings Ltd, registered in the United Kingdom.  EWAC Alloys’ net worth stood at Rs 95.7 crores at end FY’17 and Revenue was Rs 211.2 crores. This move in line with management’s long term strategy to divest non-core assets and improve return ratios. We believe this to be positive for L&T.

NCC Limited & L&T in focus: to develop multi-tower housing contract in Amaravati; positive
The Andhra Pradesh government has entrusted a Rs 2,652 crore worth of multi-tower housing contract in Amaravati to NCC Limited, L&T and Shapoorji Pallonji with a mandate to complete the work in the next six months time. The housing project is for government officials like MLA and All India service officers.

Agri: Government rolls out DBT for fertiliser subsidy in 7 states/UTs – Positive for Fertilizer companies
The Centre has introduced the direct benefit transfer (DBT) for fertiliser subsidies from this month in seven small states and union territories. Another 12 big states including Punjab, Madhya Pradesh and Andhra Pradesh are ready for the phase II launch next month and the target is to cover the entire country by January 2018. The government bears about Rs 70,000cr annually as fertilizer subsidy to provide cheaper nutrients to farmers. This will bring in more transparency as actual sale will be linked to subsidy payment.

Agri: Monsanto settles GM cotton dispute with three Indian seed firms – Positive for Kaveri Seeeds
Three leading Indian cotton seed makers have settled an intellectual property dispute with Monsanto over its genetically modified (GM) seed technology. Ajeet Seeds, Kaveri Seed and Ankur Seeds were among six Indian companies that delayed payments to Monsanto, demanding a cut in royalties. We see this is a positive development for the Kaveri seed.

Banking Sector: As per media reports, the government and commercial banks are seeking a relaxation of provisioning norms on accounts identified for bankruptcy proceedings to free up capital and boost credit growth. The finance ministry is in talks with the Reserve Bank of India (RBI) on this issue – Sentimentally positive as a relaxation on provision norms will help the capital strapped and NPA burdened banks 


Insolvency board drafts rules for repayment plan
Import of oil-drilling rigs kept out of GST purview
Inequality increased in China, India and US: IMF
Modi's economy team admits to slowdown, releases 10-pt plan 
GIC Re’s mega IPO subscribed 80% on Day 1
Direct tax collections jump 16% to Rs 3.86 lakh cr
Ola raises $1.1 bn led by Tencent, eyes another $1 bn 
India receives first GE locomotive under $2.5 bn deal
Oil & gas, infra firms to be hit by PE norms
NCC, L&T and SP together get Rs 2,652 crore Amaravati housing project
India may delay implementation of Basel III norms: SBI report
Net profit of listed pvt firms contracted 21.2% in Q1: RBI
Sun Pharmaceutical gets USFDA inspection report for Dadra facility
L&T Hydrocarbon Engineering bags Rs 1,150 crore contract from ONGC
M&M to draft new China script for farm machinery
Tata Steel acquires Rio Tinto smelter tech to cut cost, emission
World Bank lowers India’s growth forecast
UTI Mastershare declares 35% dividend
IMF thumbs up to measures to clear up bad loans 
Godrej Appliances aims at robust 20% growth this fiscal
IEX cancels Rs. 170 cr anchor allotments; IPO sails through
‘Many’ US Fed members favour December rate hike, minutes show
Monsanto settles GM cotton dispute with 3 Indian seed companies
L&T to sell subsidiary EWAC Alloys for Rs522 crore
Lupin acquires US firm Symbiomix Therapeutics for $150 million
Aditya Birla PE, Multiples PE sold IEX shares just ahead of IPO launch
Re closes stronger against US dollar ahead of Fed minutes
India Inx to launch trading in crude oil futures this month
Wal-Mart's online surge adds $5 billion to Walton family fortune
No complacency despite improving global financial stability: IMF
Factory growth, inflation likely to trend higher, says report
Pfizer reviewing alternatives for consumer healthcare business
Inflation seen at 6-month high of 3.6% in Sept
HDFC to raise Rs 2,500cr via bonds
Petrol pump dealers call off Friday's strike
IGL launches pre-paid smart cards for CNG, cooking gas
No respite for banks as bad loans hit record $146 billion
Government tempers daily price revision of petroleum products


Indiabulls Real Estate to buy out 45 percent residual stake of Indiabulls Properties Investment Trust and delist the company.
Aditya Birla group set to exit fertilizer business this year 
Sun Pharmaceuticals gets EIR from U.S. FDA for Dadra facility
IBM introduced industry platform designed specifically for insurers with Majesco
L&T to sell its entire stake in EWAC Alloys for Rs 522 crore to ESAB Holdings Ltd
NBCC gives Rs 1,950 crore order to NCC for construction of multi-storey commercial space
Tata Steel terminates pact to acquire pellet maker BRPL for Rs 900 crore
IGL launches pre-paid smart cards for CNG, cooking gas
Vascon to take Rs 25 crore loan from ECL Finance
Oil stocks: Fuel pump dealers call off their October 13 strike
Tata Steel testing technology to cut steelmaking costs
Peninsula Land announces the launch of the last phase of Peninsula Heights
HCL Infosystem to consider rights issue on October 14
Indiabulls Ventures says unit developed an app for loan disbursal
Goldstone Infratech to allot 54 lakh warrants convertible into equity shares at Rs 80.1 apiece to promoter group

Wednesday, 11 October 2017

11 October 2017 - Views & News


Coal India: Signed a wage agreement with workers' unions - positive read-thru
Signed a wage agreement with workers' unions for a period of five years which would have an estimated impact of Rs 5,667 crore annually. The "Memorandum of Agreement for National Coal Wage Agreement-X has been signed on October 10 for a period of five years from July 1, 2016 to June 30, 2021". 
View: The wage agreement is higher than the provision made earlier by the company and also much steeper than earlier 2012 wage hikes of around Rs5000 crore. The wage hikes will results in cash outflow of around 26% of FY17 cash balance and there would be risks on lower dividend payout for FY18. On positive side, the overhang of wage agreement is over and management commentary on deriving efficiency gain from cut in workforce and mines shut down, will mitigate the impact.

Paints: Easing price of titanium dioxide a near-term relief for paint companies (one third of raw material cost); after touching a high in June, titanium dioxide prices have begun to gradually ease and are currently down nearly 12% from their peak – positive for paint companies such as Asian Paints, Kansai Nerolac and Berger Paints etc

M&M: to introduce portfolio of petrol vehicles; plans electrification in crossovers and compact SUV; positive read thru …(details in other news)

Punj Lloyd: A consortium of lenders led by SBI has ordered a forensic audit of Punj Lloyd’s accounts after the borrower failed to service its loans for eight successive quarters as per media reports. Negative for Punj Llyod.

PSP Projects: has been awarded main contract works at Surat Diamond Bourse, Khajod valued at Rs. 1575 Cr. Positive for the stock.

Petronet LNG: Management expects 40% capacity utilisation for its Kochi terminal by CY2018 as compared to 12% utilization rate currently. We have already highlighted the news on 16-september-2017. Positive read through for Petronet LNG.

Bharti Infratel: Global funds and Bharti Infratel plan towering deal - stock to remain in focus
A consortium led by KKR and comprising CPPIB, ADIA and GIC Singapore is in discussions to acquire Indus Towers and Bharti Infratel for $11billion. Bharti Infratel currently owns 42% in Indus Towers. Once Bharti Infratel consolidates Indus Towers, the KKR-led consortium will increase its stake in the company from the current 10% to become the single largest shareholder. Bharti Airtel controls 61.7% in Bharti Infratel while KKR-CPPIB owns 10.3% after its $954 million investment made in March 2017. The deal is expected to be signed by the end of October 2017 or early November 2017. If the deal goes well, it would help Bharti Airtel to deleverage its balance sheet. The KKR-led consortium faces competition from Canada’s Brookfield, which is also aggressively pursuing the asset after its tower deal with Reliance Communications suffered a setback.


Shoppers Stop: to use recent divestments to reduce debt; its standalone debt will come down from around Rs492 crore to around Rs200 crore – positive read through for the stock
Shoppers Stop plans to use around Rs300 crore of the amount it will get from recent divestments of certain businesses (including stake in Hypercity chain) to reduce debt. Shoppers Stop’s standalone debt will come down from around Rs492 crore to around Rs200 crore. The standalone debt:equity ratio will fall to about 0.25x from 0.7x post the reduction in debt.

FMCG: Britannia, Parle Products, Marico and Dabur expect a brighter Diwali this time – positive as companies across sectors are pinning hopes on a robust festive season, following three muted quarters in the wake of last November’s demonetisation and the July 1 rollout of the goods and services tax (GST).
Britannia, Parle Products, Marico and Dabur expect a 10-15% increase in consumer sales this Diwali, riding mainly on higher spending in rural markets and moderately improved consumer sentiment. That will mark a return to double-digit growth for the first time in at least four quarters. But the Diwali quarter will see a higher consumption on a very low base because of last year’s note ban. The stocks in trade channels are almost back to pre-GST levels and the sharpest rise will likely be in select categories such as large packs of biscuits, chocolates, juices and gift packs of personal care products.

Hospitals & Healthcare: Prices of stent accessories may be capped; an expert panel recommends that the stent accessories be classified as essential drugs – positive read through for Fortis Healthcare, Apollo Hospitals and Narayana Hrudyalaya
The government is likely to regulate the prices of accessories used for implanting stents to treat patients with weak or narrow arteries. The move, which follows the regulation of stent prices. Prices of essential accessories like cardiac guiding catheters, guide wire and balloons used in the procedure may be reduced in line with a recommendation by an expert panel

Retail industry: India procurement for global operations may be counted for local sourcing obligations. The department of industrial policy and promotion (DIPP) is drafting guidelines which will provide relief to global retailers - Ikea and H&M have earlier requested the government to allow them to offset the condition of minimum 30 per cent sourcing against their overall global sourcing from India. If this policy goes through, this move would not only increase ‘ease of doing business’ but also spur job growth in the economy. However, it will increase competition for the domestic players like Arvind, ABFRL, Raymond

Dena Bank: Public sector lender Dena Bank has launched its qualified institutional placement issue at a time when the Reserve Bank of India has initiated prompt corrective action against the lender, limiting its ability to lend to riskier loan segments. The bank is looking to raise up to Rs 425 crore at a floor price of Rs 30.73 per share – Sentimentally Positive. Due to low level of investor appetite the success of the QIP will be keenly watched

M&M: to introduce portfolio of petrol vehicles; plans electrification in crossovers and compact SUV- positive read thru
Mahindra and Mahindra plans to fit electric power trains on all its crossovers and compact SUVs in the future, a move that will align its strategy with the government’s push for electric vehicles. In plans to introduce the KUV Electric in 2018 and plans to come out with an electric version of its SsangYong Tivoli-based SUV (S201) in 2019. Also, M&M plans to have a portfolio of petrol vehicles once the BS VI emission standard is enforced by 2020, which will enable it to broaden its product profile and effectively tap the passenger vehicle market (PV forms about 60% of the overall PV market). The strategy of introducing both petrol and electric vehicles will enable M&M to significantly gain market share in the overall PV market.

Tata Motors: September 2017 global wholesale sales grow 14% yoy to 116,419 units; nos in line with expectations
Tata Motors reported a strong 14% yoy growth in global wholesales for the month of September 2017. CV sales grew 20% yoy to 41,503 units led by demand pick up. PV sales grew 10% yoy to 74,916 units led by new launches. JLR wholesales grew 8.4% yoy to 57,365 units. Numbers were in line with estimates

M&M: Launches KUV1oo facelift - positive
Mahindra KUV100 facelift has been launched in India at a Starting price of Rs. 4.39 (Ex-Mumbai). The petrol variants are priced between Rs  4.39- 6.40 lakh(ex-Mumbai) and the diesel variants costs Rs. 5.39-7.33 lakh (ex-Mumbai). This is the first major facelift on Mahindra KUV100 since its debut in Jan 2016. The SUV gets refreshed front and rear bumper and extra cladding n the fog lamp cluster. The revised front grille on the new Mahindra KUV100 has been inspired from the Scorpio and makes the car look a bit more aggressive and a bit longer. However, the dimensions of the KUV remain unchanged. It gets all black interiors with piano Black inserts and silver accents. It also features new fabric upholstery. Mechanically the KUV100 is powered by the same 1.2L petrol and diesel engines. The engine of Mahindra KUV100 now gets the micro-Hybrid technology and claims about 3-4% more mileage

Dixon Technologies: enters into Design, Manufacturing and Supply Agreement with Flipkart - positive
Dixon has entered into design, manufacturing and supply agreement for Television, Washing Machines and Other Electrical Appliances with Flipkart. These products are to be manufactured under the trademark Marq by Flipkart.

Tuesday, 10 October 2017

10 October 2017 - Views & News


Infosys: Fixes 1st November 2017 as record date for Rs13,000 crore share buyback
Infosys has fixed 1 November as the record date for its up to Rs13,000 crore share buyback programme. Earlier, the Rs13000 crore buyback proposal had been approved by the board on 19 August at Rs1,150 apiece. As earlier indicated the total acceptance ratio would be around 59% for retail investors (holding less than Rs2 lakhs), thus we recommend to investors tender their share to the buyback.

Lupin: Lupin receives USFDA final approval for gCorgard Tablets; used to treat chest pain & hypertension. It has market size of $ 109.8 million in US (~ Rs 700 crore) -  Positive for Lupin.

ONGC: ONGC Videsh, subsidiary of Oil and Natural Gas Corp (ONGC) expects to receive $400million from Sudan as US lifts sanctions - positive read through for ONGC.

Maruti Suzuki: Parent Suzuki partners with Toyota and Mazda to develop affordable electric vehicles - positive read thru…..(details in other news)

Amara Raja Batteries: looks to foray into newer battery technologies; to launch new products in current year - positive read thru…..(details in other news)

Tata Motors: to focus on turning around the domestic business; aims to gain 5% market share in the CV segment and has planned a 4,000 Crore investment to revive the standalone operations - Positive read thru. …..(details in other news)


M&M: mulls EV capacity expansion; may set up plant in Karnataka - positive
Mahindra & Mahindra is in talks with the Karnataka government for further investments in the state as it looks at expanding capacity in its electric vehicles division Mahindra Electric. In a first, the state had last month passed Karnataka Electric Vehicles & Energy Storage Policy 2017 to make the state a hub for electric vehicles and battery manufacturing. Mahindra plans to invest Rs 3,500-4,000 crore to expand its electric vehicles business in the next three to five years. Apart from expanding capacity for EV, M&M is also looking to set up a separate large unit for battery manufacturing and is awaiting incentive policies from various state governments at the moment. 

Maruti Suzuki: Parent Suzuki partners with Toyota and Mazda to develop affordable electric vehicles - positive read thru
After announcing an investment of Rs 1,150 crore in a new unit in Gujarat to produce lithium-ion batteries with its partners Toshiba and Denso, Suzuki Motor (Maruti Suzuki’s parent) has stepped up efforts on a global level for manufacturing electric vehicles in partnership with Toyota Motors.  Suzuki may also collaborate with Mazda Technologies for electric vehicle technology. Once its battery project is up and running, Suzuki is looking to develop affordable electric vehicles in partnership with Toyota. It would be helpful and give it an advantage over others as the battery is seen to be key to developing electric vehicles. Suzuki’s Indian arm Maruti Suzuki would benefit from the project and get an edge over its competitors in the domestic market in electric vehicles.

Amara Raja Batteries: looks to foray into newer battery technologies; to launch new products in current year - positive read thru
Amara Raja Batteries Limited is looking to make a foray into other battery technologies while keeping the cost factor at the core of its business strategy. Besides the alloy development it is also considering the alternative chemistries with the work on research, capital costs and partnerships being currently underway. It expects to finalise the technologies and the investment plans in a year or two. It has developed flat plate gel and tubular gel variants which are expected to be commercially launched in the current year. The new plans will not distract the company's focus on further strengthening its existing business as lead-acid batteries will continue to be the cost effective solution in several existing applications and will be used even in the new-age e-vehicles for ignition, lighting and other requirements

Ceat: Acquires land in Chennai to build greenfield plant - positive
Tyre maker Ceat has acquired 163- acre land in Chennai for over Rs 60 crore to set up a manufacturing plant for radial tyres. It plans to invest Rs 5,000 crore in this green field project in next 5 years. The primary reason for CEAT to choose Chennai is the proximity to OEMs like Hyundai, Renault Nissan, Ford, Daimler, KIA, Isuzu

Tata Motors: to focus on turning around the domestic business; aims to gain 5% market share in the CV segment and has planned a 4,000 Crore investment to revive the standalone operations - Positive read thru.
Tata Motors has lined up an aggressive plan to turnaround the domestic business. The company aims for a higher growth, 5% market share gain in the CV segment ( through new Launches and improvement in retail in micro cities). and aims for around Rs 1500 crore improvement in bottom line. The company has lined up a 1500 Cr investment to expand the CV business. On the PV front which accounts for 20% of the standalone revenue, Tata Motors has planned a 2500 Cr investment towards building advanced modular platforms this year to develop two new products.

L&T: emerges as lowest bidder for government order of 5 million smart meters under Energy Efficiency Programme - Positive
According to a top executive of Energy Efficiency Services Ltd (EESL), L&T has won 50% of the government’s order to supply 5 million smart meters for its energy efficiency programme under smart grid project aimed at improving power distribution companies’ electricity demand-supply management. 14 meter manufacturers had participated in the bidding process on Monday. L&T quoted a price of Rs2,722/meter, more than 40% lower than the market price. The remaining order will be given to other participants if they lower their quotes. Genus Power has emerged as the second lowest bidder.

MercatorThe company sold its vessel Prem Poorva for total consideration of Rs24.7 crore; the proceeds will be used to repay debt – positive read through for the stock

M&M: To launch refreshed KUV1OO to further boost sales - positive read thru
M&M will launch it’s first major upgrade on the Mahindra KUV100 (the refreshed version will be called as the KUV100 NXT). KUV100 NXT is all set to debut in India today and is expected to be priced about 15,000-20,000 over the current variant. It will get a few minor exterior changes like updated front and rear bumper extra cladding around the fog lamp cluster, fresh alloy wheels and an aluminum finished skid plates at both front and rear to give an enhanced SUV appeal.  The revised front grille on Mahindra KUV100 NXT has been inspired from the XUV 5oo and overall the car looks a bit longer. The facelift will not get any mechanical changes.

Monday, 9 October 2017

9 October 2017 - Views & News


gx Nifty  -38 pts ‎Dow -1.72 pts ,Nsdq +7.43 pts , S&P -2.74 pts Bovespa -562 pts , Ftse +14 pts , Dax -12 pts , Cac -19 pts , Nikkei Clsd , Crude @ $49.47 brl (+0.18), Brent @ $55.72 brl (+0.20) , Gold @ 1279.04 (+4.14), Silver @ $16.839 (+0.04), Euro @ $1.1742, JPY @ $112.5400, INR @ $65.412


Textile Industry: The recent GST council meet addressed the liquidity problem faced by exporters due to delay in refund of input credit claim and cut the GST rate on man-made yarn from 18% to 12% - this is positive for the entire textile sector which forms one of the major portion of India’s total exports and thus positive for Arvind, Raymond, Trident and man-made fibre companies like SRF, Garware Wall Ropes…..(details in other news)

Jewellery: The government decided to remove the gems and jewellery dealers from purview of the reporting requirement under the Prevention of Money Laundering Act (PMLA; extended the provisions of PMLA from the present limit of  Rs 50,000 to Rs.2,00,000 in the case of jewellery purchases;  also PAN card will no longer be mandatory on the purchase of jewellery for over Rs 50,000 – positive for Titan, PC Jewellers and other jeweler companies

RIL: Sings agreement to sell its Marcellus shale gas play to Kalnin Ventures LLC for $126million – steep discount to purchase consideration of $392million; sentimentally negative
Reliance Marcellus II, a subsidiary of Reliance Industries Limited (RIL), has signed an agreement with BKV Chelsea (an affiliate of Kalnin Ventures LLC) to sell its interest in certain upstream assets in north-eastern and central Pennsylvania, which are operated by Carrizo Oil & Gas for consideration of $126million. Moreover, RIL is likely to get contingent payment of $11.25million depending on the natural gas prices over the next three years. RIL had bought the assets in 2010 at $392million and thus selling the same at steep discount to price paid – sentimentally negative for RIL.

Cadila: Cadila gets USFDA approval for Amitriptyline Hydrochloride Tablets USP, used to treat depression. Also It receives USFDA final approval to market Dutasteride Capsule 0.5mg (used to treat enlargement of the prostate gland) – Positive for Cadila.

Sun Pharma: Sun Pharma’s research arm Sun Pharma Advanced Research Company’s (SPARCs) Baclofen GRS (used to treat spasticity in patients with multiple sclerosis) fails to meet Phase 3 end points – Negative for SPARC and Sun Pharma; Baclofen GRS was one of the key product in SPARC’s pipeline, commercialization of which  is now a low probability. Hence it is negative for Sun Pharma (as Sun is manufacturing and marketing partner for Baclofen GRS), as it is setback to its efforts to build speciality business in US. Xelpros and Elepsia XL are two mid size opportunities for SPARC & Sun, which are delayed due to Halol (and is now under site transfer process).

Zee Entertainments: Acquires 100% stake in 9X Media, INX Music for Rs 160 cr – this acquisition will help ZEEL to strengthen its  music portfolio in niche genres and expanding its reach in regional markets – Long term positive ……… (details in other news)

Motherson Sumi Systems: Wholly owned subsidiary MSSL Estonia has gained title to residual outstanding minority shares of PKC Group (about 6.3% stake of PKC Group). With the above share acquisition, PKC has now become wholly owned subsidiary of Motherson Sumi and can now be delisted. Positive

Automobiles: Government to clear pending refunds of exporters by November end; no tax under GST for exporters for next six months; positive read thru for Bajaj Auto and Bharat Forge……… (details in other news)

Hotel/restaurant industry: The government has indicated that it will consider the reduction of GST rate on AC restaurants from 18% to 12% in the next GST council meet. If it happens it will be positive for Specialty Restaurants, Jubilant Foodworks

Jaybharat Maruti Group: Income Tax officials  have raided properties of Jaybharat Maruti Group  across Delhi, Harayana's Gurugram and Faridabad and Uttar Pradesh's Ghaziabad and have seized Rs 7 cr in cash and 3 Kgs of Gold – Sentimentally Negative

Textile Industry: The recent GST council meet addressed the liquidity problem faced by exporters due to delay in refund of input credit claim and cut the GST rate on man-made yarn from 18% to 12% - this is positive for the entire textile sector which forms one of the major portion of India’s total exports and thus positive for Arvind, Raymond, Trident and man-made fibre companies like SRF, Garware Wall Ropes
The GST council announced major cuts in taxes of various items and announced various measures to support exporters. Keeping in view of the liquidity problem being faced by the exporters, the Council has decided to immediately start refund process for the month of July by 10th October while exporters can get refund of August by 18th October. For the remainder of the fiscal, they will operate under an exempted category paying a nominal 0.1 per cent GST. As a long term solution, an e-wallet will be created for every exporter where a notional amount will be given in advance and the refund will be offset later against that amount. The e-wallet option will be launched by 1st April 2018. The GST rate on man-made yarn used in textile sector has been reduced to 12 per cent from 18 per cent.

Automobiles: Government to clear pending refunds of exporters by November end; no tax under GST for exporters for next six months; positive read thru for Bajaj Auto and Bharat Forge
The government will clear pending GST refunds of exporters by November-end and over the next six months. Further, no tax will be levied on exports as the Council has decided to revert to the pre-GST era. Also, from April 1,2018 an e-wallet service will be launched that will give exporters notional credits that can be used to pay GST. The credit in the wallet would be transferable. GST does not provide for any exemptions, and so exporters are required to first pay Integrated-GST (IGST) on manufactured goods and claim refunds after exporting them. This put severe liquidity crunch. To ease their problems, the GST Council decided a package for them that includes extending the Advance Authorisation / Export Promotion Capital Goods (EPCG) / 100 per cent EOU (Export Oriented Unit) schemes to sourcing inputs from abroad as well as domestic suppliers till March 31, 2018 thus not requiring to pay IGST.

VA Tech Wabag : National Company Law Tribunal passes order for initiation of Corporate insolvency resolution process in matter relating to CCCL ; stock in focus
With reference to the matter relating to Consolidated Construction Consortium Ltd (CCCL) vs. VA Tech Wabag Ltd in respect of an application filed by CCCL in respect of an alleged default in payment of dues amounting to ~ Rs1.5crs, the National Company Law Tribunal, Division Bench, Chennai (NCLT) at its hearing held on October 6, 2017 has passed an order for initiation of corporate insolvency resolution process under the provision of Insolvency and Bankruptcy Code, 2016. VA Tech Wabag has filed an appeal against this order with the National Company Law Appellate Tribunal.                     

V-Guard, Shakti Pumps and KSB pumps in focus: GST rate on water pumps reduced to 18% from 28%; positive
RIL: Government had won an arbitration against Reliance Industries (RIL) related to quantum of penalty for non completion of minimum work program for four blocks. RIL has already paid the penalty and hence the event is neutral for RIL.

Indian Overseas Bank: The Reserve Bank of India ( RBI) has initiated prompt corrective action or PCA on Indian Overseas Bank in view of high non performing assets of the bank. This will be the seventh bank among the 21 PSU banks to be placed under restrictions since March this calendar year  - Negative read through as the category means OBC will face restrictions in terms of opening new branches, hiring staff and lending to sub-investment grade companies. PCA is imposed when thresholds related to capital, asset quality and earnings are breached. The bank can continue to accept deposits and give small tickets loans

Axis Bank: The Bank has completed acquisition of digital payments platform ‘FreeCharge’ for Rs373.2 crore – sentimentally positive for Axis Bank

IDBI Bank:  Government raises stake in IDBI Bank to 77.79% by acquiring 3.81% shares through preferential allotment. As per media reports the government has infused Rs1861 crore – neutral read thru for IDBI Bank

Punjab National Bank: puts 32 NPAs with outstanding loan of Rs1,176 crore for auction – Neutral Read thru

Reliance Industries: JIO Paymeny Bank is expected to start it's operations in December-2017 as compared to earlier launch timeline of October-2017.

Zee Entertainments: Acquires 100% stake in 9X Media, INX Music for Rs 160 cr – this acquisition will help ZEEL to strengthen its  music portfolio in niche genres and expanding its reach in regional markets - positive
Zee Entertainment announced that it has entered into a definitive agreement to acquire 9X Media and its subsidiaries from New Silk Route and other shareholders for Rs160 crore. 9X Media, along with its subsidiaries, operates a bouquet of six music channels - 9XM (Latest Bollywood), 9X Jalwa (Evergreen Hindi), 9X Jhakaas (Marathi), 9X Tashan (Punjabi), 9XO (English), 9X Bajao (Hindi Classics).

Tata Communications: Ties Up with Motorsport.tv
Tata Communications has entered into partnership with Motorsport.tv to power the international growth of the network’s internet television platforms. The company will harness its global reach, media capabilities and motorsports expertise to bring the latest updates from major motorsport events seamlessly to Motorsport.tv viewers around the world.


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