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Friday, 30 September 2016

30 September 2016 - Views & News

MARKET VIEW

Indian markets are likely to open on a negative note based on the global cues. 8500 levels should hold as a good support and if does then one might see reversal in nifty on short term.

Nifty Spot Levels

Support 8558 - 8518
Resistance 8640 - 8690
GLOBAL MARKET UPDATE

 • Wall Street dropped on Thursday, weighed down by Apple as well as selling in Wells Fargo, Citigroup and other major banks as investors worried about the health of Deutsche Bank.
• Growing concerns over the stability of Germany's biggest bank have pushed its shares to record lows and its US-listed stock on Thursday tumbled 6.7 percent.
• The Dow Jones industrial average slid 1.07 percent to 18,143.45 points at the close, its sharpest decline since Sept 13.

TOP NEWS

Alkem Laboratories gets US FDA observations on Daman plant, negative read-thru
Alkem Laboratories has received 13 observations from the US Food and Drug Administration (US FDA) after the regulator inspected its manufacturing facility at Daman.The United States Food and Drug Administration (USFDA) had conducted an inspection at the company’s manufacturing facility located at Daman from September 20 to September 29, 2016.The company received the inspection report which contains 13 observations, it added.The FDA Form 483 is issued to drug makers at the conclusion of an inspection “when an investigator(s) has observed any conditions that in their judgement may constitute violations of the Food Drug and Cosmetic Act and related Act. The plant accounts for 30% of US revenues and 50% of pending ANDAs, post the observation there may be delay in products approvals, if issue does not get resolved.

Accenture Q4FY16 earnings: Strong results, sentimentally positive for Indian IT incumbents
In Q4FY2016, Accenture reported better-than-expected CC revenue growth of 9% YoY at $8.49 billion (ahead of top end of its own guidance by ~ $40 million), driven by 13%YoY growth in consulting business and 6%YoY growth in outsourcing business. On reported currency basis, the revenue was up 8% YoY. New bookings for the quarter were $9.0 billion (up 7% YoY on CC basis), with consulting bookings of $4.8 billion (up 19% YoY on CC basis) and outsourcing bookings of $4.2 billion (up 4% YoY on CC basis). On vertical front, products, financial services and healthcare segment grew by 18%YoY, 11%YoY and 9% YoY respectively on CC basis. Digital revenues accounted for 40% of total revenue. During FY2016, revenues were up 10.5% on CC basis to 32.9 billion. Outlook: For Q1FY2017 and FY2017, Accenture expects revenue to increase by 5% to 8% on CC basis (expect flat cross currencies impact).

Sintex: Approves demerger of custom moulding, prefab biz, positive read-thru
Sintex Industries  board has approved demerger of custom moulding business and prefab business from its two arms Sintex BAPL and Sintex Infra Projects, respectively. Both the companies are wholly-owned subsidiaries of Sintex Plastic Technologies. As per the scheme, Sintex Industries shareholders would get shares of Sintex Plastic Technology. "The scheme also involves issuance of equity shares of Sintex Plastic Technology to the equity shareholders of Sintex Industries such that shareholders of Sintex Industries will effectively get one equity share of Sintex Plastic Technology upon demerger against one equity share held in Sintex Industries and listing of these equity shares of Sintex Plastic Technology.
View: The demerger of textile and plastics unit is been in the news for last few months, Plastics division being a free cash flow positive with strong ROCE, the value unlocking is significant for the investors, now the focus will be shifted to selling of textile unit post the demerger for further value unlocking

Zee Entertainment (ZEEL) forays into international radio broadcasting, acquires UAE-based FM station – Long term positive for the stock
ZEEL announced its foray into radio broadcasting space with the acquisition of UAE-based radio station ‘Hum 106.2’. ZEEL already operates satellite television channels like Zee Aflam and Zee Alwan in the UAE market. Hum 106.2 is a UAE-based Hindi FM radio channel with a current market share of 26%. This move comes immediately after ZEEL forayed into film production and distribution in the UAE and middle-east markets. Note that ZEEL sold its sports network TEN Sports to Sony Pictures Network (SPN) in an all-cash deal worth $385 million on 31st August.

Uber eyes major India expansion, plans to buy 200,000 cabs over next two years translating into a business opportunity of Rs 13,000 cr for car industry; positive for Maruti and Tata Motors

Lovable Lingerie promoters looking to sell 15-20% stake at 20% premium to private equity investors – Positive (though not confirmed officially)

Indraprastha Gas, Mahanagar Gas and Gujarat Gas-Domestic natural gas price is likely to be cut by 20% in October – positive for IGL/MGL/GGL but negative for ONGC/OIL
  
Fund Raising

Tata Steel approved issue of NCDs worth Rs1000cr

Dwarikesh Sugar looking at QIB of 25 lakh shares to ease stress on balance sheet – Positive (if sails thru)

OTHER NEWS

IDFC Bank, DCB and Torrent Power added to derivative (F&O) list

Uber eyes major India expansion, plans to buy 200,000 cabs over next two years translating into a business opportunity of Rs 13,000 cr for car industry; positive for Maruti and Tata Motors
Uber Technologies is charting a major expansion in India and is planning to buy as many as 200,000 passenger vehicles over the next two years and lease them out to drivers who want to join its cab-hailing platform. Maruti Suzuki and Tata Motors are likely to gain the most as Uber already has pacts with the two for driver skilling programmes, vehicle purchase and finance solutions. Uber expansion plan could translate into a Rs 13,000-crore opportunity for automakers. 

Bajaj Auto workers are planning to go on a hunger strike for one day to protest against delay in reaching wage revision agreement. The production is unlikely to be impacted as the strike would be carried on Sunday. Neutral for Bajaj Auto

Tata Motors (JLR) showcases smart new Discovery vehicle at Paris Motor show; to go on sale in 2017; positive
Tata Motors (JLR) showcased the new SUV “Discovery” at the Paris Motor show. With streamlined new styling that loses much of its predecessor’s boxiness, Discovery 5 packages all-terrain capability with a new lightweight aluminium monocoque body that weighs up to 480kg less than the previous steel framed model for improvements in driving dynamics and fuel economy. Discovery is due to go on sale in South Africa from mid-2017.

Indraprastha Gas, Mahanagar Gas and Gujarat Gas-Domestic natural gas price is likely to be cut by 20% in October – positive for IGL/MGL/GGL but negative for ONGC/OIL
The domestic natural gas price, which is set by the Centre after every six months, is expected to fall nearly 20% in October from the current $3.7 per million British thermal units (MMBtu). While this is likely to impact negatively for upstream companies like ONGC and OIL, the downstream gas distribution companies like Indraprastha Gas (IGL), Mahanagar Gas (MGL) and Gujarat Gas (GGL)  would be benefitted from this event as the input cost for gas distribution companies will go down. Gas distribution companies like IGL and MGL normally benchmark CNG price with Petrol and Diesel and sell it a discount to make it attractive. In the current environment, domestic petrol and diesel prices are inching up with firm to stable crude oil prices (likely to remain with OPEC production cut decision) and IGL/MGL/GGL can have lower input cost. So they can have room for volume expansion or margin expansion; therefore positive for IGL, GGL & MGL.       

HCL Tech and IBM enter 15-year partnership
During Q1FY2017 results press release, the company announced a long–term strategic IP partnership with a global technology major. In today’s press release, HCL Tech has shared further details of this IP Partnership. HCL Tech disclosed that it has entered into a 15-year partnership with IBM for Automation and DevOps solutions. HCL Tech will build features and functions on top of existing IBM platforms and products such as Tivoli Workload Scheduler, Rational Testing, and Rational Modeling & Construction and software for on-premises, hybrid and public cloud and software as a service (SaaS) platforms. As per the management, this partnership will generate revenue of ~$30-40 million in FY2017.

Container Corporation of India: The members of Kalyana Rama’s (who is to take over as Chairman and Managing Director from October 1) immediate family, including his wife and brothers have or have had interests in several companies including some in the logistics space, in which Concor operates as per media reports. Sentimentally negative for Concor.

Kotak Mahindra Bank: ING sells 2.5% stake in Kotak Mahindra Bank for Rs3653 crore

NHPC signs Wind power purchase pact for 50 MW with Rajasthan Government; positive for NHPC

Seamec: The Company has entered into an agreement with HAL Offshore Ltd (HAL) for deployment of vessel SEAMEC II along with provision of services of ROV, the contract commenced w.e.f September 28, 2016. As intimated, the total contract value for the period of 3 years will be USD 33,441,300 approx. The development is positive for Seamec.

MORE NEWS

Surgical operation sanctioned soon after Uri terror attack
GST Council to meet tomorrow to discuss rules, exemptions
Can Airtel adjust Rs 3000cr against licence fees, HC asks Government
COAI DG rules out overhaul of voting rules, apology to RJio
Government invites applications for Reserve Bank of India deputy governor
Tata Steel says making progress on extra land for Indian plant
US jobless claims rise less than expected
Rs 20,000-cr plan to ease pressure on Mumbai suburban train system
Surgical strikes: India is said to have kept America in the loop
Government mulls new licensing policy for tobacco items
Flipkart seeks to be numero uno in India's ecomm war
Tata Steel sees crude steel output up by 1 MT this fiscal year
By 2018, Kolkata Metro Railway network to increase by 14 km: General Manager
Auto firms seek GST relief for e-vehicles
Kalyani Steels bears the brunt of iron ore cost escalation
DLF eyes multiple partners for stake sale in rental arm
Mercedes-Benz launches locally made GLC SUV at ₹47.9 lakh
Energy PSUs seek savings via jointprocurement of goods and services
Pierre Cardin pens now on paper with Flair
Daihatsu, Toyota months away from decision to launch small car for India
Output at TNPL’s packaging board plant stabilises
UFO Moviez’s theatre arm to start operations next month
Credit Suisse underweight on India
Non-retail investors lap up Hindustan Copper share sale
‘Fed rate-hike likely in December, but need clarity on trajectory for 2017’
MCFL investors reject transaction with Zuari Agro
Globus to make a comeback with refurbished products
Greenko set to snap up SunEdison India assets with TerraFarm nod for the deal
Mercedes-Benz launches locally made GLC SUV at ₹47.9 lakh13 hr. 52 min. ago
Apollo Hospitals, Italy’s KOS form jt venture for medical rehabilitation
Largest spectrum auction to kick off on 1 October amid telecom battle
Large appliances the next growth driver for online retail sales
Avenue Capital may buy FIRE Capital stake
Religare Finvest plans to raise Rs650 crore through rights issue
Varun Beverages eyes up to Rs1,400 crore from IPO in October
IndiGo adds new A320neos to fleet in market share push
Vijay Mallya confident of judicial relief in pending cases
Amazon India signs up abof as seller on marketplace
OmiActive Health Technologies eyes stake in fragrance maker Indfrag

STOCK IN NEWS

 1. Tata Steel plans to add 6 mt in capacity through brownfield expansion
2. RIL may invest in mature start-ups to deploy Rs 5,000-cr fund
3. Vedanta's Lanjigarh unit gets showcause notice for selling hazardous waste
4. September car sales may surge 14-15% on festive demand
5. Mercedes-Benz rolls out Made-in-India GLC SUV at Rs 47.90 lakh
6. Welspun to make steel billets, TMT rebars in Odisha
7. British Steel back in profit after spin-off from Tata Steel
8. Lupin gets USFDA nod for generic drug treating Alzheimer's
9. Yes Bank plans to raise Rs 2,500 crore via long-term bonds
10. Drug firms facing challenging times due to price control: Cipla
11. 12 SME IPOs to hit markets tomorrow to mop up Rs 70 crore
12. LIC MF inks mutual fund distribution pact with Karnataka Bank
13. Indian content conglomerate Zee Entertainment Enterprises Limited (ZEEL) on Thursday announced its foray into the radio industry with the acquisition of UAEs Hum 106.2 FM radio station.
14. L&T Construction wins Rs 2,046 crore worth of orders
15. Aban Offshore strengthens balance sheet, promoters infuse $25 mn in co


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