Monday, 24 October 2016

24 October 2016 - Views & News


 Indian markets are likely to open on flat to positive note. The market is in range of 8800 and 8500. Nifty could be in sync with global markets. The support for Nifty is at 8595 level.

Nifty Spot Levels

Support 8642 – 8595 – 8555
Resistance 8746 – 8806 - 8848


• The S&P 500 and the Dow were little changed and the Nasdaq advanced on Friday as a record day for Microsoft and earnings from McDonald's helped offset a fall in energy and healthcare shares.
• A stronger dollar, which touched its highest level since early February, also pulled on sentiment as it could dent the earnings of large multinationals.
• The Dow Jones industrial average fell 16.64 points, or 0.09 percent, to 18,145.71.


Axis Bank   , Idea Cellular   , Bharti Infratel   , Adani Enterprises   , Adani Power   , Adani Transmission   , Indiabulls Real Estate   , Reliance Capital   , Tata Metaliks, Thyrocare Technologies, Adi Finechem, Aditya Birla Money, Ador Welding, Adore Multiproducts, Ajmera Realty, Atishay, Balaji Amines, Bharat Bhushan, Capital Trust, Coromandel Engineering, GeeCee Ventures, Greenply Industries, GSFC, Indag Rubber, Indian Metals, Johnson Control, Kirloskar Ferro, KPR Mill, Lloyds Metals, Mahindra CIE, Muthoot Capital, Navin Fluorine, Parrys Sugar, Rallis India, Rane Madras, Ruchira Papers, Saurashtra Cement, Shree Precoated Steels, Span Diagnostic, Supreme Petrochem, Swaraj Engines, Wendt


Alert: Supreme court supports National Pharmaceutical Pricing Authority (NPPA) on drugs price capping – Negative for Cipla & Dr Reddy.
Supreme Court has supported government’s decision of clamping ceiling prices on drugs even without first fixing the rules. It’s a bitter pill for many domestic pharma companies as they will now have to pay the fine for overcharging of drugs (who were challenging NPPA under the above mentioned ground). More than Rs 3,500 crore claimed by NPPA from the industry for overpricing has been stuck in various courts for nearly two decades, with the companies challenging the demand. Cipla alone is facing claims of Rs 1,768.51 crore, according to its latest annual report.

Alert: Mindtree Ltd: Disappointing quarter, cautious outlook, stock to react negatively in trade

Larsen & Toubro plans to raise $500 mln through a qualified institutional placement (QIB). The issue is expected to be launched in a few weeks after getting the board and shareholder approvals - Additional supply could put pressure on stock price

Tata Motors lines up slew of models to take on rivals; eyes third position in the domestic passenger vehicle space by 2019-20; positive read thru..(details in other news)

The Telecom Regulatory Authority of India (TRAI) recommended a combined fine of Rs 3,050 crore on service providers Idea Cellular and Bharti Airtel, along with the Indian subsidiary of Vodafone, for denying sufficient interconnect points to Reliance Jio, sentimentally negative for Bharti Airtel and Idea

KDDL along with Titan has entered into a strategic partnership with Raymond Weil for exclusively retailing Raymond Weil watches in India – positive read through for KDDL

ICICI Bank, Axis Bank: ICICI Bank, Axis Bank, StanChart get back $2.5 billion of Essar loans – positive read through
The Essar Group, after signing a mega $12.9-billion asset sale in its oil business, has paid back the three banks i.e. ICICI Bank, Axis Bank and StanChart an  $2.5 billion (estimated) as part of the first payment for their debt exposure to the conglomerate. The two banks together had an exposure of $1.5 billion and will get back nearly half of their money or about $770 million in cash while further $750 million of debt will get transferred to Rosneft-led consortium and Essar's ports and other businesses, as per the terms agreed upon by them.


LG Balakrishnan & Bros reported strong set of numbers for Q2FY2017. Topline grew 10% yoy to Rs 310 cr aided by demand improvement from key two wheeler segment. Operating margins improved 200 bps yoy to 14.7% mainly driven by lower raw material costs. Net Profit grew strongly 22% yoy to Rs 21.1 cr.


ACC Q3CY2016 result highlights (standalone): Lower volume and muted realization dents earnings
·         The net sales for the quarter decline by 9.7% YoY to Rs2,519 crore. Decline in revenue was on account of decline in both volumes (down by 9.6% YoY) and realization (down by 0.1% YoY).
  • During the quarter there was OPM decline of 39 basis point YoY to 10.9%. Hence, Ebidta/tone declined by 3.6% YoY to Rs539. Operating profit declined by 12.8% on yoy basis to Rs273.4cr.
  • Reported earnings for the quarter stood at Rs84.1 crore as against Rs117.0 crore, a decline of 28.1% YoY on account of 31% YoY increase in interest cost. The stock is not under our active coverage and we do not have any rating on the stock.
 Mindtree Ltd: Disappointing quarter, cautious outlook, stock to react negatively in trade
Revenues for the quarter was down by 3% qoq (-1.5% qoq on CC term), on account of project delay and pricing pressure. OPM declined by 220 bps qoq to 12.5%, net income for the quarter was down by 23% qoq to Rs94.8 crore. Management has given  cautious outlook for Q3FY17 and expect some revival by Q4FY17.

Fund Raising

L&T plans to raise $500 million (Rs 3350crore) via QIP


KDDL along with Titan has entered into a strategic partnership with Raymond Weil for exclusively retailing Raymond Weil watches in India – positive read through for KDDL
KDDL Ltd's subsidiary, Ethos Ltd., along with Titan has entered into a strategic partnership with Raymond Weil for exclusively retailing Raymond Weil watches in India. Raymond Weil will exit from all other retailers in India and will now be exclusively available only at Ethos and Helios stores - the retail arm of Titan Co. Ltd. Raymond Weil belongs to the limited circle of independent family companies creating elegant and refined watches for men and women.

Tata Motors lines up slew of models to take on rivals; eyes third position in the domestic passenger vehicle space by 2019-20; positive read thru
Tata Motors is lining up a slew of new products, including a compact SUV, premium hatchback and an executive sedan and is targeting to become the third biggest passenger vehicle maker in India by 2019-20. Tata Motors which is currently at the 5th position in volume terms is looking to fill in gaps in its product portfolio as its current models cover only 60% of the passenger vehicles segment. The company is absent in segments such as the premium hatchback, executive sedan and compact SUV segments. With the launch of Hexa SUV in January 2017, the company is aiming to cement its position in SUV space. To enhance appeal to the consumers, Tata Motors has also re-crafted its design philosophy (called the Impact design) and focused on the design aspects which are international in nature. 

Procter & Gamble plans Walmart-like pact with Future Group to increase sales in India– Long term positive for P&G India; sentimentally negative for HUL as P&G is one of the strongest competition in Detergent and Shampoo segment
Procter & Gamble (P&G is exploring a long-term partnership with Future Group that could involve joint sales forecasting and planning, exclusive product releases, embedding officials at each others’ headquarters and even supply-chain initiatives. It could be a similar partnership that P&G has with Walmart in the US where they share data on consumer behaviour, plan product launches and even lean on each other for supply-chain initiatives. P&G’s three entities in India sell products ranging from detergents and shampoo to razors and sanitary napkins.

 Tata Motors (Jaguar) launches its SUV F Pace in India starting Rs 68.40 lakh; positive
Jaguar has launched its first ever performance SUV in India, the all-New F-PACE, priced at Rs 68.40 Lakh (ex-Delhi). With dynamic design language and practicality at its core, the All-New Jaguar F-PACE is already setting benchmarks globally. JLR has been selling 5,000-6,000 units on monthly basis globally. Visually inspired by F-TYPE, the all-new Jaguar F-PACE is a performance SUV that has the DNA of a sports car.

RIL set sign $600 million pact with Samsung Heavy Industries for six ethane carriers and also forays into LPG retailing; positive read thru
Reliance Industriesis set to buy six very large ethane carriers (VLEC) from South Korea’s Samsung Heavy Industries Co Ltd for $600 million, which will carry liquefied ethane, from the US to RIL’s refinery in Jamnagar off the coast of Gujarat. By importing ethane RIL could save Rs2000 crore annually. RIL has already invested in storage and capacity agreements for liquefaction and export of ethane with a North American terminal, which will improve the long-term competitiveness of the cracker portfolio through dedicated feedstock, enhanced margins, higher capacity and end-to-end integration. In othe news, RIL has forayed into cooking gas retailing, launching a 4-kg LPG cylinder on pilot basis in 4 district. We beleive both news is positive read thru for the company.

Mahindra launches e2o Plus electric hatchback; price starts Rs 5.46 lakh in Delhi
Mahindra Electric launched its new electric CitySmart car, the ‘e2oPlus’ at a starting price of Rs. 5.46 lakh. The price is for the P4 variant ex-showroom Delhi, post state subsidy and FAME incentive. The car will cost a lot more in other cities that don't enjoy any such incentives. On a full charge, the Mahindra e2oPlus can travel for upto 140 km and can achieve a top speed of 85 kmph. As per the company, charging the e2oPlus is as simple as charging a mobile phone. The model is available in 4 trim levels (P2, P4, P6, P8) and four colours namely Coral Blue, Sparkling Wine, Arctic Silver, Solid White.

Punj Lloyd: IDFC fund buys 3 solar assets of Punj Lloyd Infra – Positive for the stock
The India Infrastructure fund of IDFC Alternatives is buying three solar projects in Punjab and Rajasthan from Punj Lloyd Infrastructure as per media reports. IDFC paid about Rs100 crore for three solar projects with a total capacity of 45MW. The development is positive for Punj Lloyd.

Apollo Tyres setting up 475 mn euro greenfield plant in Hungary; to begin operations in early  2017

Apollo Tyres is setting up Europe's largest greenfield plant in Hungary with an investment of 475 million euros to produce nearly 62 lakh tyres for passenger cars and heavy commercial vehicles per annum. The facility will start production early 2017 and will produce tyres to cater to the entire European market. The Hungarian facility will be a state-of-the-art plant and once completed it will have a capacity to produce 5.5 million (55 lakh) passenger car and light truck (PCLT) tyres and 6,75,000 heavy commercial vehicle (HCV) tyres per annum.

Infosys will help Telstra to set up the India captive centre
As per media sources, Telstra (outsourcing technology work to Infosys for nearly a decade) is planning to set up a captive offshore centre in India. Infosys will help Telstra set up the captive centre with around 200 people to begin with as Infosys is among the largest technology vendors for Telstra.

ICICI Home Finance: Baring dropped out of the race to acquire ICICI Home Finance – Sentimentally negative
As per media reports, Baring Private Equity Asia, which partnered rival India Value Fund Advisors (IVFA) in a plan to buy ICICI Home Finance, has walked out of the deal in its final stages. That’s prompted IVFA, which is still keen on buying the home finance arm of ICICI Bank, to reach out to its limited partners or investors and American private equity giant TPG. It’s unclear whether TPG, which got edged out from the race for ICICI Home Finance earlier this year, will enter the fray again or partner with IVFA. IVFA and Baring were to pay Rs 2,300 crore for stakes of 65% and 35%, respectively

Maharashtra Electricity Regulatory Commission (MERC) has asked the two leading distribution companies, Tata Power and Reliance Infrastructure (R-Infra), to explore alternatives such as medium-term and long-term power purchase, through competitive bids as Mumbai's peak power demand is expected to increase to 4,108 MW in 2019-20, from 3,760 MW currently


 Singh brothers in talks to sell Religare Finvest for Rs 6,000 cr
RIL set to sign $600 million ethane ship deal today
IDFC Alternatives buys 3 Punj Lloyd solar projects
Trai floats paper on interconnect rules
Oil price down cycle 'nearing end': Khalid al-Falih
'Telcos liable for bill payment issues on mobile apps'
Working to make India an arbitration hub: PM Modi
India cautions against using regional trade pacts to change WTO pacts
Govt, banks meet today on stressed assets
Tata, R-Infra asked to explore PPA options
WTO meet: India calls for level playing field in agri-trade
FIPB to take up 19 investment proposals this week
Coking coal price surge to pull down steel companies
GST can be paid online using debit, credit cards: Revenue Secretary
MERC directs Tata, Reliance to explore power purchase options
Interconnect exchange back on TRAI’s radar
AT&T-Time Warner may signal start of new media industry consolidation 
Patanjali entering textile manufacturing sector: Ramdev
PE investments decline 53% to $2.5 bn in Sept quarter: Report
Hind National Glass to go to BIFR as a ‘potential sick firm’
Schneider Electric eyeing acquisitions in India 
Iraq will maintain oil output while Opec partners discuss cuts
Finance ministry expects report on debit card data breach in 10 days
Internet-connected gadgets blamed for Friday malware attack
Aviation watchdog DGCA to soon get powers to slap penalties
Finance ministry declines to share black money assessment reports
Banks eye 'resolution' of Rs 1.5 lakh cr worth stressed assets
COAI dismayed over fine on telcos, takes hands off approach
HCL Tech bets on acquisitions to drive growth
SEBI refers complaint against Sahara Q Shop to Maharashtra
Anti-black money operations to be intensified
AT&T-Time Warner Could Disrupt $8 Trillion Debt Market: Gadfly
GST law to boost domestic demand, drive job creation: PM
Banks planning to move out of UK before EU exit
Govt to further ease visa regime to boost tourism, biz
Sebi plans greater push to secure marketplace from cyber risks
Govt decides to fast-track irrigation projects in Indus basin
Sebi relaxes restrictions on 41 entities

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