}

Tuesday, 28 February 2017

28 February 2017 - Views & News

MARKET INSIGHT

Markets are likely to open positive. Nifty has fallen back towards lower end of the medium term rising channel. Thus 8900-8880 is a key support zone on closing basis. The larger trend remains positive. On the higher side, last week’s high of 8982 will be the key hurdle to watch out for.

Nifty Spot Levels

Support 8860 – 8826 – 8783
Resistance 8982 – 9000 - 9080
GLOBAL MARKET

• US stocks ended slightly higher on Monday and the Dow closed at a record high for a 12th straight session, as President Donald Trump said he would make a "big" infrastructure statement on Tuesday.
• Trump, who met with state governors at the White House, also said he is seeking what he called a "historic" increase in military spending of more than 9 percent, while he said his administration would be "moving quickly" on regulatory reforms.
• The comments came ahead of Trump's first address to a joint session of Congress Tuesday evening.
• The Dow Jones Industrial Average was up 15.68 points, or 0.08 percent, to close at 20,837.44.

Market Update

Sgx Nifty -5 pts ‎Dow +15.68 pts ,Nsdq +16.59 pts , S&P +2.39 pts , Bovespa Clsd , Ftse +9 pts , Dax+18 pts  , Cac -0.06 pts , Nikkei  +115 pts now , Crude @ $54.07 brl (+0.04), Brent @ $56.45 brl (+0.03) , Gold @ 1254.05 (+0.60), Silver @ $18.33 (+0.02), Euro @ $1.0584, JPY @ $112.7500, INR @ $66.703

Today's Corporate Action 28th Feb  Ex Date

BPCL Interim Dividend - Rs. - 19.5000

TOP NEWS

As per the media reports, ONGC may acquire government’s 51.1% stake in HPCL followed by an open offer to buy additional 26% from other shareholders of HPCL. The entire deal is likely to be valued at around Rs44,000 crore ($6.6 billion) and thus valuing HPCL at Rs562/share (in-line with CMP of Rs560). Although the exact deal structure for payment of Rs44,000 crore is not available yet but the share swap agreement between GoI, ONGC and HPCL shareholders would be the crucial thing to watch out in the likely deal.  

OMCs to bear merchant discount rate till 31-March-2017 – do not see significant negative impact on marketing margin of OMCs as digital sales through debit cards account for small portion of volumes. OMC agrees to bear merchant discount rate (MDR) charges till 31-March-2017. We do not expect any significant negative impact on marketing margin and earnings of OMCs as BPCL had clarified in its Q3FY17 earnings conference call that  MDR charges would be applicable only on purchase of petrol and diesel through debit cards while majority of their sales volume through digital mode comes from loyalty programs and credit cards on which OMCs would not be liable to bear MDR charges.

Grasim, Aditya Birla Nuvo, Idea Celluar: Idea-Vodafone deal to be revealed with Grasim-AB Nuvo voting – Positive read thru for Grasim, Aditya Birla Nuvo and Idea Cellular
The Kumar Mangalam Birla group is expected to announce the merger of Idea Cellular and Vodafone India at the same time as it sends out voting notices to shareholders of Grasim and AB Nuvo on their merger in the first week of March as per media reports. The group officials expect concerns of Grasim’s shareholders over Nuvo’s exposure to Idea will be mitigated with the announcement. The development is positive read thru for Grasim, Aditya Birla Nuvo and Idea Cellular.

As per the media reports, Odisha government is likely issue a notice to IOCL for payment of Rs1,485 crore related to VAT for Paradip refinery for the period of Nov-2015 to Dec-2016. We highlight here that payment of VAT by IOCL would mean one time negative impact of Rs2/sh on PAT.   

 OTHER NEWS

Maruti Suzuki further strengthens lead in the passenger vehicle segment; Maruti’s 8 models appear in top 10 selling vehicles In January 2017; positive
Maruti Suzuki (MSI) strengthened its leadership position in the domestic passenger vehicle market in January 2017, with 8 of its models featuring in the top 10 selling brands. The company had 6 models on the top 10 selling passenger vehicles (PVs) list in January 2016. The 8 models featuring in the list were Alto, Swift Dzire, Wgon R, Swift, Celerio, Baleno, Vitara Brezza and Omni. 

V-guard has allotted 8,71,766 equity shares having face value of Rs 1 each to the employees who have exercised the stock options under ESOS 2013. Out of the above shares 80,900, 7,36,245, & 54,621 equity shares were allotted at Rs 1, 48.50 & 99.90 each respectively.  This would amount to 0.29% dilution to current equity base of Rs 3,021.94 lac

Airtel scraps roaming charges on incoming calls, data
Bharti Airtel announced that customers of its network will enjoy free incoming calls/SMS while on national roaming and there will be no premium on outgoing calls, starting April 1, 2017. Airtel's move to lift roaming charges comes in the wake of intense competition in the telecom sector after the entry of Reliance Jio.

Entertainment Network India (ENIL) buys 21 new frequencies in FM auctions
Radio Mirchi, FM brand housed under Entertainment Network India, bought 21 radio frequencies under the second batch of the Phase III of FM radio auctions this year. ENIL, a part of the Times Group, spent a total of Rs 51.3 crore to acquire the new frequencies. These frequencies are expected to become operational towards the end of 2017-18, and will increase the company’s footprints to 64 cities from 43 at present.

MORE NEWS

 'Airtel rolls out 2 aggressive plans to take on Jio prime'
Daiichi moves to block Fortis stake sale again
Nine bank unions to go on strike on Tuesday
Biyani sees no future in speciality retail formats
More layoffs likely as manufacturing sales shrink
JSW group to foray into aviation business
Sebi, RBI discuss monitoring foreign investors in real time
Govt mulls permitting sale of non-food items under FDI policy
Idea-Vodafone deal to be revealed with Grasim-Nuvo voting
Bitcoin firms form self-regulatory body for transparent growth
Buzz on HPC becoming part of ONGC
Lenders get majority stake in GMR's Chhattisgarh unit
Airtel announces free national roaming from April 1
India is among the most open economies, says Jaitley 
KKR leads the race for stake-buy in Bharti Infratel, says Sunil Mittal
Rich Indians taking EB-5 visa route as US shuts down H-1B
Zydus arm gets USFDA nod to sell anti-viral drug
Lupin arm in pact to distribute anti-depressant drug in Japan
NSE algo trading: Sebi begins audit of 15 brokers over unfair access
LIC's total premium income grows 12.43% in nine months of FY17
Coal India units agree to buy back shares, but ratchet up valuations
RIL market cap crosses Rs4 trillion
Agricultural income outside India will be taxable in India
Tata Sons, Docomo to settle $1.17 bln legal dispute, reports Nikkei
IMF says sanctions on Iran dampening economic sentiment
Providence to sell 3.33% holding in Idea Cellular
Telenor India buy won't affect Airtel's financial position: S&P
Odisha govt to issue notice to IOC for payment of dues
Worked hard on cleansing of market, UK Sinha
Govt to employ third party to study arsenic content in rice
‘Mergers would be the least desirable option’
LIC: Bumper equity crop, but bad loans rising too
E-comm crisis unfolds: Vendors fear payment dela

STOCK IN NEWS

1. Quess Corp looks at managing airports, health services
2. Chinese stent maker enters India after NPPA caps prices
3. Lenders get majority stake in GMR's Chhattisgarh unit
4. Declaring war on roaming, says Sunil Mittal as Airtel competes against Jio
5. Providence to sell 3.3% of Idea Cellular stake in block deal
6. Growth in Indian Pharma exports revives in the third quarter
7. After premium sanitary ware, HSIL shifts focus to consumer products
8. ENIL and Sun TV spend big bucks in FM phase 3 batch 2 auction
9. ONGC may acquire HPCL in Rs 44,000-cr deal
10. Idea-Vodafone deal to be revealed with Grasim-Nuvo voting

Thursday, 23 February 2017

23 February 2017 - Views & News

MARKET INSIGHT

Markets are expected to open flat to positive. Today being scheduled expiry of the month, markets are expected to remain volatile. Overall index trend looks to on the course of testing all time high of 9119 in medium term. 8900 – 8860 will act as crucial support zone for any minor dip.

Nifty Spot Levels

Support 8900 – 8860 – 8783
Resistance 8968 – 9000 - 9080

GLOBAL MARKET

• The S&P 500 ended modestly weaker on Wednesday, holding losses after minutes from the Federal Reserve's last meeting kept alive a potential near-term interest rate hike, while DuPont shares helped the Dow close at an all-time high for a ninth straight session.
• The major US indexes are trading around record highs, driven up since President Donald Trump's Nov. 8 election by the promise of lower taxes, reduced regulations and higher infrastructure spending.
• The Dow Jones Industrial Average rose 32.6 points, or 0.16 percent, to 20,775.6.

Market Update:

SGX Nifty -6 pts (8914) from last trade 8920 , Nikkei - 107 pts ,  Hangseng - 80 pts ,  NOW @6.52am ,  
‎Dow +32.69 pts ,Nsdq -5.32 pts , S&P -2.56 pts , Bovespa -462 pts , Ftse +27 pts , Dax +31 pts  , Cac +7 pts , Crude @ $54.01 brl (+0.42), Brent @ $56.17 brl (+0.02) , Gold @ 1237.85 (+4.55), Silver @ $17.99 (+0.04), Euro @ $1.0551, JPY @ $113.3700, INR @ $66.9325

Today's Corporate Action 23rd Feb  Ex Date

CESC Interim Dividend - Rs. - 10.0000NATCOPHARM Interim Dividend - Rs. - 6.0000

Today's Key Result 23rd Feb

Emco Ltd,Mahindra Cie,Rain Inds

TOP NEWS

ALERT: Housing finance Companies: Markets regulator Sebi allowed debt mutual funds to invest an additional 10% of their corpus in debt papers issued by housing finance companies (HFCs), over and above the sectoral cap of 25% - Positive read through for HFCs as the move will help channelize funds into the housing finance space and lower cost of funds; positive for LIC Housing, DHFL, Repco Finance and GIC Housing among others

CRISIL expects the Voluntary Vehicle modernization program to result in a 65% incremental growth in CV sales volumes spread over FY18-FY20 period: Positive for CV manufacturers like Ashok Leyland, Tata Motors, M&M and Eicher Motors.…..(Details in Other News)

Hindustan Oil Exploration Company (HOEC) expects early monetization of Kherem field (awarded to HOEC in recently concluded bids for marginal fields) in Arunachal Pradesh. Kherem is a small field with initial oil in place of around 3 million barrels and 17 billion cubic feet of gas. HOEC holds 40% stake in onshore Kherem field - Positive for HOEC.
Aurobindo recalls 47,040 bottles of Venlafaxine Hydrochloride extended release capsules (indicated for the treatment of major depressive disorder) in the US – Sentimentally negative for  Aurobindo.

MBL Infra, NHAI cancels Udaipur Bypass road project awarded to MBL Infrastructures under HAM model , Negative read thru

Jyoti Structures- As per media news, Essel Infraprojects and Shriram EPC both are eyeing a stake in Jyoti structures, are expected to submit their bids soon, stock to be focus

HUL - Unilever to review business following Kraft Heinz bid; focuses on hitting higher profit targets and improving the shareholders value – positive read through for HUL

Jyothy Laboratories - Henkel Begins Due Diligence For A Stake In Jyothy Laboratories, Henkel has an option to enhance stake in Jyothy Lab till March 2017 – positive read thru for Jyothy Laboratories

 OTHER NEWS

HUL - Unilever to review business following Kraft Heinz bid; focuses on hitting higher profit targets and improving the shareholders value – positive read through for HUL
Unilever has promised to boost profits and conduct a root and branch review of its business. Unilever said it would boost operating profit margins to meet “the upper end of its 40-80 basis points guidance. Previously, it had said the margin improvement would be at the lower end of the range indicated. Unilever’s profit margins are half those of Kraft Heinz, suggesting that the business could be run more efficiently to improve shareholders value.
View – Unilever’s enhancing focus on improving business’ profitability and shareholder’s value is positive for HUL, as it is one of the key growth driver for the company in Asia region and hence more focus would be given in enhancing HUL’s profitability in near future.

Jyothy Laboratories - Henkel Begins Due Diligence For A Stake In Jyothy Laboratories, Henkel has an option to enhance stake in Jyothy Lab till March 2017 – positive read thru for Jyothy Laboratories
Jyothy Laboratories is in talks to sell a stake to Germany-based Henkel AG & Co. The two parties have to reach an agreement before the end of this fiscal as part of the 2011 deal when Jyothy Laboratories had acquired a majority stake in Henkel India’s consumer business. Jyothy Lab had offered Henkel AG the option to buy up to 26 percent stake in the company either through purchase of equity or through issue of shares. If Henkel AG does buy more than 26 percent stake in Jyothy Laboratories, it will trigger an open offer to comply with the takeover code of the the Securities and Exchange Board of India. The open offer gives the acquirer a chance to buy up to another 20 percent from public shareholders. The promoters own 66.92 percent stake in Jyothy Laboratories and the remaining 33.08 is held by public shareholders, including over 24 percent by institutions, according to the company’s disclosure to stock exchanges in December-end.
The talk of this deal has been in the market since quite some time. Any positive move from Henkel will give  Jyothy Laboratories an access to more products and brands which Henkel AG owns internationally. The German company has over 100 consumer brands in its portfolio, includes Persil, Schwarzkopf, Dynamo. This would be long term positive for Jyothy

FMCG – According to Euromonitor study edible oil surpass dairy as India’s largest packaged food item, as consumer prioritise health over expenses – positive read through for branded edible oil companies such as Marico and Agrotech Foods
Oils surpassed dairy as India’s largest packaged food item, underpinned by increasing awareness among consumers who now prioritise health and hygiene over expenses on the staple cooking medium.  The introduction of smaller and more affordable pack sizes is also bringing more packaged food categories within the reach of price-sensitive consumers in semi-urban and rural India. By contrast, companies are stressing health and we l l n e s s through innovative marketing in urban India, helping shift value to the premium end of the spectrum. 
View: This is positive branded edible oil players such as Marico, Agrotech Foods and Ruchi soya etc to gain share from non-branded players. Marico is already building up its edible oil portfolio towards healthier variants under the Saffola brand to improve the consumption in the coming years.

CRISIL expects the Voluntary Vehicle modernization program to result in a 65% growth in CV sales volumes between FY18-FY20: Positive for CV manufacturers like Ashok Leyland, Tata Motors, M&M and Eicher Motors.
CRISIL expects the voluntary-vehicle modernisation programme (V-VMP) announced by the Ministry of Road Transport & Highways, to boost commercial vehicle sales volumes by a cumulative 65% growth between FY2018-FY2020. The media report further suggests that the V-VMP scheme could lead to incremental sales of 4.4 lakh CVs (primarily MHCVs) as against CV industry size of 6.86 lakh units. As per the report, more than 85% of the incremental 4.4 lakh CV sales (about 3.74 lakh units) due to scrappage would be of medium and heavy trucks because of their lifespan of about 20 years, which is more than the MHCV industry size of 3.02 Lakh units in FY2016. Incremental LCV sales due to scrappage would be around 66,000 units as against LCV industry size of 3.83 Lakh unit. V-VMP scheme will be finalized (details of incentives to be provided by Government and OEM to be finalized) and is likely to be implemented in the next two to three months and we expect significant benefits for CV players particularly for the MHCV segment.

Maruti Suzuki to invest Rs 1,900 crore on Rohtak R&D centre in 2 years for faster product churn and compliance for the safety norms
Maruti Suzuki India is investing Rs 1,900 crore till March 2019 on enhancing the R&D centre at Rohtak for cutting time of new product development and to expand infrastructure for evaluating vehicles' safety. The centre will have facilities dedicated for transmissions, engines, emissions controls among others. The new safety norms come into effect from October 2017.

TVS Motor regains no 2 spot in the scooter segment; to unveil a new scooter in FY2018 to maintain growth momentum; positive
TVS Motor Company Ltd has regained the second position in the Indian scooter market that it lost to Hero MotoCorp about a year ago. Sustained demand for the products coupled helped TVS Motor in its comeback. Also, TVS Motors urban rural balanced mix enabled the company to outgrow HeroMotocorp which was relatively more impacted by demonetisation. TVS total scooter sales stood at 6,77,172 units for (April 2016 to January 2017) period, while Hero’s volumes were about 6,58,255 units. To maintain the growth momentum, TVS Motor has unveiled a BS IV-compliant variant of its executive scooter Wego in new colours, and plans to launch all-new scooter (Graphite) in FY2018.
Airtel buys strategic equity stake in fintech startup Seynse
Bharti Airtel through its subsidiary Bharti Airtel Services, bought a strategic equity stake in Seynse Technologies, a financial tech startup. Seynse has created the popular digital lending platform Loan Singh, which enables easy loans for credit-worthy yet underserved borrowers. Seynse has built a proprietary credit engine and advanced machine learning capacity to serve customers.

Idea Cellular: Softbank looks to pick up stake in the proposed Vodafone-Idea combine, stock to be in focus ( We reiterate our view that, we do not see material upside in the stock from current levels)
As per media news, Softbank, which is about to close its mega $100 billion Vision Fund, could emerge as a new investor in the proposed Idea-Vodafone combine, Softbank is learnt to be in talks with Vodafone Plc to buy a minority stake in its Indian unit which is likely to be merged with Idea Cellular. While discussions are still on and there is no guarantee about the outcome, people familiar with the situation say it is possible that the Japanese investor may end up with 15-20 % in the merged entity.

As per the media reports, BPCL is likely to take its shut down its Mumbai refinery for 6 weeks by end-Feb-2017 for a maintenance turnaround. No negative impact is expected on supplies as crude processing at other units would be increased by BPCL. We highlight here that the news is in the market since early February-2017.

CCEA approves 20,000-mw solar park scheme with government financial support of Rs8100 crore; positive for BHEL, KEC International & Ujaas Energy

Asian Oilfield gets $95 mn contract for  maintenance svcs for Nigerian oil field, positive read-thru

Ujaas Energy, Promoter Anurag Shyamsunder Mundra Sell  19.9 LK shares and  Mundra Shyam Sundar Sell 21.51 Lk Shares yesterday , overall sell 2% stake in the company, Stock to be focus

Hindustan Organic chemcials, seek nod to sell 442-acres land to BPCL for Rs619 crore (Current market cap Rs158 crore), stock to be focus

 MORE NEWS

Softbank looks to pick up stake in the Vodafone-Idea combine
Fed Reserve's minutes point to rate hike 'fairly soon'
Urjit Patel sees a better Q4 on faster remonetisation
RIL’s Rs 39K cr gain in m-cap was worth the big ‘Idea’
FinMin to finalise Rs 8,000-cr cap infusion in 15 days
Note ban's negative impact on India is reversing: S&P
Rationality returning to telecom sector: Fitch
GST adoption could raise India's GDP to over 8%: IMF
Freebies by Jio hit govt's licence fees, spectrum charges: Telecom Comm
Sebi issues consultation paper to review stock exchanges norms
RBI rate panel unanimously agree to focus on 4% inflation target
Taxman to scrutinise loan deposits under Operation Clean Money
Finmin questions Sebi on NSE co-location audit
India's $85-bn orders still not enough: SpiceJet
‘India comfortable with crude prices up to $65/barrel’
RJio’s tariff targets incumbent operators’ top-end users
Cabinet approves doubling of solar power capacity to 40,000 MW
NPPA warns stent makers, importers against shortage
TCS to remain net cash positive despite Rs16K cr buyback: S&P
Bharat Electronics’ offer-for-sale subscribed 2.34 times by institutional buyers
India needs to create a bad bank quickly: Arvind Subramanian
NSE, BSE seek clarification from Infosys on anonymous emails over Panaya deal
SBI says examining all currency notes at ATMs after fake Rs 2000 notes report
PM Narendra Modi calls for accountability, efficiency to improve telecom services
UK created maximum jobs in India via FDI: Report
Sensex ends 103 points higher on derivatives expiry, RIL rally
Realtors express concern on Supreme Court ruling on consumers vs builders disputes
I-T to go easy on up to Rs 5 lakh deposits by 70-plus people
HDFC Bank FPI trade:RBI,Sebi to tighten norms on trigger point
EU says open to accommodate more Indian skilled professionals
No plans to introduce Rs 1,000 notes: Das

STOCK IN NEWS

1. Poultry industry protests over chicken legs import from US
2. Infosys says audit committee to probe whisteblower letter on Panaya
3. Volkswagen said to renew India push with Tata Alliance talk
4. Abbott plans to launch device that can detect traumatic brain injury
5. Maruti Suzuki to invest another Rs 1,900 cr on Rohtak centre in 2 years
6. Kwid sales crosses 1.30 lakh units, says Renault
7. Toyota India eyes to gain by launching smaller hybrid cars
8. RIL shares surge to seven-and-a-half year high after Jio's new plan
9. Snapdeal to lay off 600 people over the next few days

Wednesday, 22 February 2017

22 February 2017 - Views & News

MARKET INSIGHT

Indian markets are likely to open on positive note following global market. Nifty level of 8930 coincides with a crucial falling trendline from the previous swing high. Once 8930 is breached on a closing basis, the Nifty will be set to test the all-time high level of 9119. On the flip side, 8860 and 8800 will act as crucial supports.

Nifty Spot Levels

Support 8860 – 8800 – 8712
Resistance 8930 – 8975 - 9000

GLOBAL MARKET

• US stocks rose to fresh record highs on Tuesday, boosted by strong earnings reports from Wal-Mart and Home Depot and continued optimism about the economic agenda of President Donald Trump.
• Home Depot shares gained 1.4 percent after the home improvement retailer reported higher-than-expected quarterly profit and sales, boosted by a strong US housing market.
• The Dow Jones Industrial Average rose 118.95 points, or 0.58 percent, to 20,743.

Market Update:

Sgx Nifty +6 pts ‎Dow +118.95 pts ,Nsdq +27.37 pts , S&P +14.22 pts , Bovespa +519 pts , Ftse -25 pts , Dax +139 pts  , Cac +23 pts , Nikkei  -2 pts now , Crude @ $54.34 brl (+0.09), Brent @ $56.69 brl (+0.07) , Gold @ 1235.75 (-1.00), Silver @ $17.95 (+0.00), Euro @ $1.0542, JPY @ $113.6700, INR @ $66.975 🔹US GENERIC GOVT. 10-YEAR YIELD : 2.4379%

Today's Corporate Action 22nd Feb  Ex Date

CENTUM Interim Dividend - Rs. - 2.0000
CONCOR Interim Dividend - Rs. - 9.6000
CONTROLP Interim Dividend - Rs. - 2.5000
DCMSHRIRAM Interim Dividend - Rs. - 2.8000
ELDEHSG Interim Dividend - Rs. - 12.5000
GREAVESCOT Interim Dividend - Rs. - 4.0000
HGS Interim Dividend - Rs. - 2.5000
HITECHGEAR Interim Dividend - Rs. - 1.2500
ICIL Interim Dividend - Rs. - 0.4000
JAGRAN Buy Back of Shares
MEP Interim Dividend - Rs. - 0.1000
MOIL Interim Dividend - Rs. - 5.0000
NCLIND Interim Dividend - Rs. - 1.0000
NICCOPAR Interim Dividend - Rs. - 0.1500
NRBBEARING Interim Dividend - Rs. - 1.4000
PODARPIG Interim Dividend - Rs. - 2.5000
SJVN Interim Dividend - Rs. - 2.2500
SUDARSCHEM Interim Dividend - Rs. - 2.5000
SUPRAJIT Interim Dividend - Rs. - 0.5000
VETO Interim Dividend - Rs. - 1.0000
VIDHIDYE Interim Dividend - Rs. - 0.2000
VIPIND Interim Dividend - Rs. - 0.8000

TOP NEWS

Dr Reddys Laboratories: Dr Reddys Laboratories completes audit of the API manufacturing plant at Miryalaguda, by the US FDA, on February 21, 2017. The Company have been issued a Form 483 with three observations, which the Company is addressing. Two more facility await USFDA inspection and outcome of it will be the key monitorable, till then stock to remain in focus.

Axis bank: As per media reports, Kotak Bank has approached the Government of India for its stake in Axis bank. Through the Specified Undertaking of the Unit Trust of India (SUUTI), the government has a 12.02% stake in Axis Bank while LIC of India holds 14.49% stake in Axis. The respective managements, however, have not confirmed the news and Finance Ministry officials have denied it – Sentimentally Positive read through for Axis Bank (if at all the strategic stake sale would be done at premium valuations)

Government plans to roll out direct transfer of fertiliser subsidy from June 30; Positive for Fertilizers companies like Chambal Fertilizers and Urea makers (Details in other news)

Bharat Electronics: Government to sell 5% stake in BEL at floor price of Rs1,498/share (4-5% discount) to garner Rs1,600 crore – Removes key hangover on the stock

ONGC to buy government stake in HPCL and/or BPCL according to media reports in line with govt thinking of creating a mammoth oil company – Positive for ONGC (we continue to like IOC among refining companies)

OTHER NEWS

Power Grid wins 765kV transmission project in eastern region under tariff based competitive bidding on build, own, operate and maintain basis; positive for Power grid

Government plans to roll out direct transfer of fertiliser subsidy from June 30; Positive for Fertilizers companies like Chambal Fertilizers and Urea makers
The government has planned to roll out direct benefit transfer for fertiliser subsidy from June 30, 2017  in all districts across the country. As per the plan the fertiliser subsidy will be given to the producer after capturing the Aadhaar number through a point of sale machine of the farmer when he purchases a bag of fertiliser. The difference between the actual value and the subsidised price of fertiliser will then be transferred to the producer’s bank account. The move is likely to be positive for fertilizers companies like Chambal fertilizers and others urea companies as it could push the consumption of fertilizers

Maruti Suzuki to launch new 2017 Ciaz in April 2017, to sell through Nexa dealerships; positive
Maruti Suzuki will launch the new Ciaz in April 2017 with variant rebranding and change in equipment levels. In addition, the sedan will be sold through the Nexa Dealerships only, which will make the Ciaz the fourth model to be sold from the company's premium retain stores. On exterior front, new Ciaz will receive a revised front grille with new bumpers and the headlamps will get LED DRL's and a new set of alloy wheels. It is expected that the sedan's top end variant might get sunroof as well. Inside the cabin, the sedan will get features such as touch screen infotainment system compatible with Apple CarPlay and Android Auto. The ABS (Anti-lock Braking System) and dual airbags will be standard across all the variants in the upcoming Ciaz.

Tata Motors, Volkswagen mull partnership for vehicle architecture and technology sharing for emerging markets; positive if talks are successful
Tata Motors and Volkswagen Group are said to be at an advanced stage of finalising a partnership as per media sources. Sharing vehicle architecture and technology is at the heart of the discussion. The companies are looking at sharing modular platforms for India and emerging markets, including the advanced modular platform (AMP) being developed by Tata Motors. Volkswagen may offer technical knowhow on producing multiple models based on modular architecture. The two companies are also exploring whether Volkswagen’s MQB A0 platform can be used by Tata Motors. The contours of the partnership, on whether it will be a joint venture or a technology tie-up, are still being worked out.

BEL: India sanctions 42 additional coastal radars for security - Positive
India decided to augment its coastal surveillance capabilities as it sanctioned the second phase of 42 coastal radar chain, including 4 mobile ones. The 38 additional radar stations and four mobile radar stations were sanctioned by the Defence Acquisition Council. It will cost Rs 800 crore, BEL is undertaking the task.

 MORE NEWS

ONGC likely to pick up govt’s stake in HPCL or BPCL
Govt may roll back 10% LTCG tax proposed in budget
No amnesty for deposits linked to laundering: CBDT
Singapore SC bars Salve to appear in Ranbaxy case
PE, VC investments down 6.3% in January: EY report
RBI for December deadline to recast top 50 bad loans
Jio to go pay from April 1, but keeps goodies rolling
Chandra to focus on shareholder value
Credit fund assets zoom 60% in last 10 months
IDBI Bank to sell stake in non-core businesses
Dr Reddy's unit fails to clear US FDA audit
Viral suggests 2 AMCs to tackle bad debt
Chandra gets cracking on Day One at Tata Sons
With Rs. 303 plan, RJio primed for data war
Microsoft to start using Aadhaar for Skype service
‘Over 50% Indian women labour on without being paid’
BEL’s 5% offer-for-sale issue opens today
SBI pitches for separate telecom spectrum for financial services
Flipkart in talks with Microsoft, others for up to $1.5 billion fundraising
JC Penney to reduce outsourcing to India
ONGC takes profit hit from royalty payments
Tata fund in talks to buy 23% stake in Dodla Dairy
ITC to hike cigarette prices by up to 13%
Govt doubles maternity leave for women workers in industries
RBI deputy governor Viral V Acharya: Using RBI funds to recapitalise banks not a good idea
Market took demonetisation positively; rising dollar dampened sentiment, says FinMin
Bengal decides to enter into joint venture with GAIL
Bank strike: One million bankers to strike work on February 28
Sinochem sounds out ONGC for Brazilian stake buy
No cap on visa for Indian students: British envoy
Even e-NAM is no MSP guarantee for farmers
 Axis stock spikes 5% on Kotak merger reports
EPFO makes withdrawals easy, chucks employer attestation

STOCK IN NEWS

1 The paid offering from Reliance Jio, announced by Reliance Industries Chairman Mukesh Ambani on Tuesday, will exert more pressure on rivals Bharti Airtel, Vodafone and Idea Cellular.
2. Dr Reddy's unit fails to clear US FDA audit
3. Tata Steel's Kalinganagar unit crosses two mn tonnes in hot metal output
4. Piramal eyes 3rd spot in domestic OTC market by 2019
5. Prakash Industries to demerge PVC business into separate entity
6. Air India to raise $250 million by putting two Dreamliners on sale
7. Tatas will lead, not follow: What Chandrasekaran said at Bombay House today
8. BEL’s 5% offer-for-sale issue opens today
9. IDBI Bank to sell stake in non-core businesses
10. ONGC likely to pick up govt’s stake in HPCL or BPCL

Tuesday, 21 February 2017

21 February 2017 - Views & News

MARKET INSIGHT

Markets are likely to open positive. Nifty initial hurdle is at 8900 which when taken it will fly towards 8930 levels. On the lower side 8860 is the immediate support and till that is held the uptrend for intraday will remain intact as below that it will again go in consolidation phase i.e. between 8800-8860 levels. 

Nifty Spot Levels

Support 8860 – 8827 – 8784
Resistance 8900 – 8930 - 8980


GLOBAL MARKET

US markets were closed yesterday.

Asian stocks steady, euro pressured by French election worries MSCI's broadest index of Asia-Pacific shares outside Japan was flat in opening trades on Tuesday and held below a 19-month peak hit last Thursday. The index is up more than 11 percent since Dec. 23.

Market Update:

Sgx Nifty +1 pts ‎US Mkt Clsd , Bovespa +784 pts , Ftse -0.10 pts , Dax +70 pts  , Cac -2 pts , Nikkei  +43 pts now , Crude @ $53.98 brl (+0.20), Brent @ $56.12 brl (-0.01) , Gold @ 1237.50 (-1.60), Silver @ $18.03 (+0.002), Euro @ $1.0612, JPY @ $113.3700, INR @ $66.975

Today's Key Result 21st Feb

Castrol( 146 cr +4% Yoy Elantas Beck,Huhtamaki Ppl,ITD Cement,Kamat Hotel,Net 4 India

TOP NEWS

TCS announced buyback up to 5.6 crore equity shares (2.85%) at Rs2,850 per share for maximum of Rs 16,000 crore under tender offer route, overall acceptance ratio for shareholders will be close to 3%  (would be different for small shareholders holding less than Rs2 lakhs amount of shares).
View: The buyback will be more positive for Tata Sons, which is holding close to 73% of share capital, however given that buyback price premium to Friday close price is around 17% and 14% from yesterday close , it will support the stock performance in near term. Nevertheless, we believe buyback will only have sentimentally positive impact on the stock in near term (which is already there, stock trading at positive momentum from the last few trading session, post the buyback announcement), however for lasting out performance, earnings growth will be the only key catalyst , which  seems to be missing under the current difficult industry environment. We maintain our Hold rating on the stock.

M&M Korean subsidiary Ssangyong Motors records first annual profit in the last 10 years; aims for improved performance ahead; positive …….(details in other news)

India LNG imports declined by 15% YoY and 14% MoM to 1.24mmt for January 2017 –negative for Petronet LNG


 OTHER NEWS

Britannia signs MoU with Greece’s Chipita for joint venture in India; in-line with its strategy to venture new categories in bakery space – long term positive for the stock
Britannia Industries signed a non-binding MoU and is working towards formalising a joint venture with Greek baker Chipita to make rolls, croissants, and other dough products to meet the demands of a rapidly urbanizing home market.  The categories are highly scalable and are bridge products between the existing product portfolios of the company. Britannia is likely to hold the majority stake in the venture that will involve an initial manufacturing investment of about $11million. Britannia will set up facilities next to its existing plants to optimise logistics costs, and leverage its existing strengths of supply-chain and distribution networks.  The rollout across markets including modern trade stores as well as tier two markets is expected early next year.

M&M Korean subsidiary Ssangyong Motors records first annual profit in the last 10 years; aims for improved performance ahead; positive
M&M Korean subsidiary Ssangyong Motor (SYMC) reported its first ever annual net profit of 58.1 billion Korean Won in 2016 in a decade compared to a loss of 61.9 billion Korean Won in 2015. In the October to December 2016 quarter, the revenue increased by 2.7% y-o-y to 1,000 billion won while the net profit remained flat 19.4 billion Won. The profitability was spurred by higher domestic and export volumes and healthy response to compact SUV Tivoli. Also establishment of SY Auto Capital, the captive financing company in November last year, supported sales growth by providing high-quality financial services for installments and other one-stop services that combine sales and financing. Going ahead, SYMC aims to launch a new product every year to boost volumes.  In CY2017, M&M will successfully launch the large-sized premium SUV Y400 and expand its product line-up to further increase sales and continue the profitabilitiy trend. Positive for M&M.

TVS Motors launches “Wego” scooter upgrade with new color tone and BS4 compliant engine to boost volumes
TVS Motor has launched an upgrade of its existing Scooter - Wego. The new scooter comer with a host of new features like Sync braking system, fully digital speedometer, dual tone seat cover, silver oak panels and a USB charging port and two new color variants. The upgraded scooter is BS4 emission norm compliant and will be available at select outlets across the country and is priced at Rs 50,434 (ex showroom Delhi). The new scooter would help the company improve its sales volumes

Siemens wins order worth Rs287cr for supplying signaling systems for Nagpur metro; positive for Siemens

Nestle India looking at new categories to pep up growth – positive read through for the stock
Nestle India is now looking at consolidating its portfolio, entering new categories, and growing penetration of its products. The focus is on de-risking the business model after Maggie Noodles controversy. New categories on the radar include building a premium coffee business under Nespresso and Dolce Gusto, looking at entering petcare business, and growing presence in the cereals segment. The company, which has a relatively small business in the healthcare and skincare products segment, will also focus on growing these categories. It has also re-launched its malt-based beverage, Milo, in the ready-to-drink format, which it claims comes with lower sugar levels.

Infosys denies whistleblower allegations in Panaya acquisition deal
Infosys has strongly denied that any member of the Infosys management team was involved in prior investments in Panaya as alleged by an anonymous whistleblower letter and entire process was carried out within the framework of a corporate governance. In a point by point rebuttal, Infosys stated that the valuation was done by Deutsche Bank, the financial and tax due diligence was done by one of the Big four firms and legal diligence was done by a law firm – Kirkland & Ellis.

Future group joins hands with UK's Laura Ashley for selling its merchandise in India  - positive read thru
Future group has partnered UK clothing and home ware retailer Laura Ashley that runs about 450 stores globally and Future will have exclusive rights to make and sell merchandise as well as wholesale distribution in India. While Laura Ashley, which was well known in the 1980s for its floral dresses, has a clothing line as well, Future Group has signed the licensing deal for its larger business - home furnishings.  About a year ago, Future Group acquired FabFurnish and said it will spin it off with furniture retail format Hometown to create a separate listed entity with target revenue of Rs 1,000 crore.

 MORE NEWS

TCS okays Rs 16K-cr buyback at Rs 2,850/share
ArthVeda plans to raise $1 billion for housing 
Birlas in talks to sell fertiliser business to Indorama
SC directs Unitech to pay 14% interest to home buyers
Local telecom gear cos to get access to $1bn fund
Infy to come under pressure after TCS share buyback
RBI, Sebi discuss HDFC Bank breach
Tata Power eyes stake sale in renewable power arm
ICEX, NMCE considering merger: EY to do due diligence
IDBI privatisation back on govt agenda
Ambuja's Q4 net up 60% due to lower taxes and energy costs
Steel firms lower prices as demand stagnates
BharatQR code promises to take India down less-cash road
Centre seeks expression of interest for IRCON Inttl IPO
Chandra takes the hot seat at Tata Sons today
Havells puts its cash to use by buying Lloyd’s consumer biz
EU pushes India to extend investment pacts by six months
Canara Bank’s Rs. 1,124-cr rights issue opens on March 2 
India a priority among large emerging markets: CPDQ's Rashad Kaldany
World Bank arm to invest $47.5 million in Granules India
Flipkart, Microsoft announce strategic cloud partnership
Eveready plans to revamp tea business, could be spun off into a subsidiary
Lender serves bankruptcy notice to Ruchi Soya
Collapse of Kraft-Unilever tie-up extends run of failed mega-deals
Govt may cross Rs 45.5K crore divestment target this fiscal
India and Rwanda sign MoUs in innovation, aviation, visa requirements
India's growth slowdown spilling over into Q4: Nomura
Vedanta Group Q3 EBIDTA jumps 79% to $882 million
I-T dept to launch 2nd phase of bank a/cs scrutiny next month
Best time for home loans as rates at 6-yr low
FDI in print media, state-run banks may be hiked to 49%
RCom-Tata Tele talks could spawn third largest telecom combine
25,000 tonnes of basmati to be exported to Iran

STOCK IN NEWS

1. Note ban in India has led to Rs 100-cr loss of sales in Dec quarter: Nestle
2. Tata Power eyes stake sale in renewable power arm
3. Abbott likely to withdraw high-end stents
4. Jet Airways offering bonus frequent flyer miles till March-end
5. Eveready Industries plans tea business revamp, hive off into separate arm
6. TCS plans India's biggest buyback at Rs 16,000 cr
7. Vedanta Group Q3 EBIDTA jumps 79%, revenue rises 26%
8. Litigation, sagging financials to hit Tata Tele, R-Com merger talks

Monday, 20 February 2017

20 February 2017 - Views & News

MARKET INSIGHT

Nifty is likely to open on a flattish note based on the global cues. Bias remains positive as long as nifty holding 8780 levels for the day

Nifty Spot Levels

Support 8783 – 8712
Resistance 8856 - 8900

GLOBAL MARKET

 • The Dow Jones Industrial Average barely reached a seventh straight record high on Friday and the S&P 500 and Nasdaq also closed at a record as gains in Kraft Heinz helped offset selling in energy stocks.
• After suffering losses for most of the session, the Dow and S&P 500 turned positive in the final minutes of a week fuelled by the "Trump Rally" that has seen stocks surge since the November presidential election.
• Asian markets opened mostly lower on Monday, as investors await further details 

TOP NEWS

Alert: Havell’s TO acquire consumer biz of Lloyd Electric for Rs 1600 crore – Positive in terms of usage of close to Rs1350 cr of free cash on books for growth of business and the acquisition done at reasonable valuations (15x EV/EBIT); It is also positive for Lloyd Electric which can repay its debt (close to Rs800 cr)

Sugar -  India's sugar deficit widens to 15% from 10% as on February 15, 2017; this will further firm up the sugar prices along with drivers such increase in global sugar prices – positive for UP based sugar companies (maintain positive view on Balrampur chini and KM Sugar Mills)
According to Indian Sugar Mills Association (ISMA), India's sugar deficit increased to 15% as on February 15 from 10% on January 31, 2017 as sugarcane crushing season in Karnataka has almost come to an end, while that of Maharashtra is at its fag end.  As on February 15, 2017, sugar mills in the country have produced 146.72 lakh tonnes of sugar, as compared to 173.34 lakh tonnes produced as on 15 th February 2016. Sugar production in this season till 15th February 2017 is 26.62 lakh tonnes lower than the sugar produced upto the corresponding date last year. ISMA has also claimed that current global prices are higher to the domestic prices which will make imports unviable at current levels.

Hindustan Unilever - Kraft withdrew its offer of $143 billion merger with Unilever because it felt it was too difficult to negotiate a deal following the public disclosure of its bid (UK government scrutiny as well as differences between the companies' cultures and business models were some key concerns about the deal); Unilever had already rejected the proposal as it sees no merit, either financial or strategic, for Unilever's shareholders – neutral for HUL

Mangalam Drugs Unit-2 audited by WHO & is issued few procedural observations; Company will respond to observations after receipt of audit report – Sentimentally negative; stock to remain in focus till the time there is clarity on response submitted and its outcome.

IRB InvIT Fund gets Sebi's approval to launch IPO, positive read-thru
IRB InvIT Fund, an investment trust sponsored by IRB Infrastructure Developers, has received markets regulator Sebi's approval to raise Rs 4,300 crore through initial public offering (IPO). However, Securities and Exchange Board of India (Sebi) has asked for clarification from India Grid Trust and Reliance Infra InvIT Fund regarding their proposed IPOs. IRB InvIT Fund had filed its draft papers in September 2016 and got 'observation' from Sebi on February 9, which is necessary for any entity to launch public offer

JP Associates: JPA, JPPower allot Rs3058 crore worth debt  to lenders, financial institutions hold 51% stake, positive read-thru (both stock has already rallied significantly in the last two months)  
Jaiprakash Associates has informed BSE that the Stakeholders Relationship Committee of Jaiprakash Power Ventures Limited (JPVL), a subsidiary of the Company, in its meeting held February 18, 2017, has allotted 305,80,00,000 Equity Shares of Rs. 10/- each at a price of Rs. 10/- per share to its various lenders, upon approval of allocation of conversion of part of their outstanding debt amount into Equity Shares, pursuant to implementation of SDR.

As per media flash, Idea, Vodafone, to seal merger within a month, Idea stock to be focus (we do not see much upside in Idea based on the merger ratio and valuation stated in the media reports)

Dilip Buildcon gets LoA from NHAI for Mah project under HAM, cost at Rs911 crore

 OTHER NEWS

GSK Pharma gets USFDA nod for Mepolizumab Injectable; used to treat Eosinophilic Asthma [increased levels of eosinophils (a type of white blood cell) in the airways]  - Positive for GSK Pharma.

Eicher Motors-Polaris review JV, may look at local assembly to cut costs; aims for breakeven by 2020; positive read thru

US based all-terrain vehicle specialist Polaris, which entered into a joint venture with Eicher Motors for a personal vehicle Multix, is relooking at its India strategy with the venture failing to take off as planned. Amongst the series of measures planned to revive the initiative, Eicher Polaris has upgraded the product by packing more power with the BS IV offering and the company will be more than doubling the network to 150 within next six months. It is also exploring the possibility of assembling its ATV at the JV’s Jaipur facility for a quicker breakeven and has set a clear breakeven plan for the venture by 2020.

M&M plans to launch petrol variants of XUV5oo and Scorpio amid consumer shift from the diesel variants; positive
Mahindra & Mahindra plans to launch a petrol variant of its flagship Sports Utility Vehicle XUV500 in Q1FY18 in the wake of customer preference shifting away from diesel vehicles in the segment. The company is also mulling launching a petrol variant of its popular Scorpio model depending on the demand for the same in XUV500. Launching petrol variants will enable the company to tap the demand and help it regain market share in utility vehicle space.

M&M’s arm (Mahindra Electric) is looking at cab operators and e-commerce companies that thrive on logistics support in its bid to rejuvenate sales and has decided to increase the production capacity to 5,000 units per annum this year, from the present capacity of 2,000 units. It is also anticipating a surge in demand for its products due to the Centre’s incentives and other programmes offered by states such as Rajasthan, Chandigarh and Delhi. Positive

NTPC scouts for partners to set up cement plants near its coal-based power stations to utilise fly ash.

TCS, Board meet to  consider a proposal for buyback of equity shares, stock to be focus.

Vedanta to invest $10 bn on expanding business

SREI Infra, Bharat Road Networks files  for IPO; issue size estimate to be around Rs1,200 crore, stock to be focus

NMDC: In talks to buy stake in  Vietnam mine, stock be in focus
As per media news, NMDC is in discussions with Vietnam-based Masan Resources to acquire a "considerable stake" in its Nui Phao polymetallic mine. The mine, which has rich reserves of tungsten mineral, is located in Thai Nguyen province in Northern Vietnam. At present, India mostly imports tungsten for its domestic requirements due to high production cost of the metal.Recently a team from NMDC visited the plant and held initial discussions with Masan Resources. NMDC is interested in acquiring a considerable stake in the mine as Ministry of Defence has also expressed interest to buy the metal from NMDC. A decision will be arrived only after a due diligence.

Infosys: An whistle-blower questioned why Infosys paid $200 million for Panaya when the company had been valued at $162 million by Israel Growth Partners
As per media report, an email purportedly written by an anonymous whistle-blower questioned why Infosys paid $200 million in February 2015 for Panaya when, in the previous month, the company had been valued at $162 million by Israel Growth Partners, which made a $20 million investment to pick up a 12.31% stake. Infosys has publicly disclosed that SAP’s co-founder Hasso Plattner held about a 6% stake in Panaya. The email states that the Panaya acquisition made Plattner richer by $17 million.

IOCL plans to invest around Rs15,750 crore over next few years to increase its pipeline length by 7,550kms from currently around 11,746kms currently.  Pipeline segment contributed 26% to IOCL’s standalone EBITDA in FY16 – long term positive for IOCL.

BPCL plans to set-up 1.5mtpa naphtha cracker at its JV Bina refinery (BPCL stake at 49%) at an estimates cost of Rs6,000-7,000 crore.

Banking Sector: Jaiprakash Power Ventures Ltd (JPVL) has alloted 305.80 crore equity shares to its lenders as part of debt restructuring scheme, which would reduce the debt of Rs3,058 crore. The major lenders include - ICICI Bank, IDBI Bank, Punjab National Bank, Central Bank of India, SBI, United Bank of India, Canara Bank, Oriental Bank of Commerce, UCO Bank, IDFC, LIC, Syndicate Bank, Corporation Bank, Indian Overseas Bank, Allahabad Bank, and Bank of India etc. – Positive read thru for lender banks as this would be the initial step towards resolution of this NPA

 MORE NEWS

31 out of 34 oil & gas field auctioned sold
Tax benefit of Rs 2.4 lakh to first-time home buyers
ARCs may get a push as bad bank put on hold
Tata Steel's UK unions approve new turnaround plan
Exports rise for fifth month in a row, up 4.3% in January
USFDA warns Resonance Labs of mfg violations
Bankers seek dispensation to recast of bad loans
Trade deficit narrows to $9.8 bn in January
Cabinet clears merger of 5 associate banks with SBI
39% comply with I-T's online verification
Record wheat, foodgrain output likely in 2016-17
I-T Dept to scrutinise tax relief claims by sick companies
Novelis to lay off employees in Korea, US to curtail costs
Piramal lends Rs 2K cr under lease rental discounting scheme
SBI plans Korea-Nepal, Korea-India remittance corridors
India, Croatia ink pact to boost economic ties
‘Cash-backs won’t get you customer loyalty’
Claris Lifesciences net jumps 233%
SoftBank to buy Fortress Investment for $3.3 billion
Nestle India profit down 9% in fourth quarter
Govt to list all profit making PSUs in 2-3 years
Paytm claims Rs5,000 crore worth transactions in January
Tata Motors shares fall 10.3%, biggest decline in five years
Sun Pharma’s Q3 results leave investors underwhelmed
BlackBerry files patent infringement suit against Nokia
Vodafone-Idea merger: BofA, UBS, StanChart vying for $40 mn advisory fee
Tata Steel unveils UK's biggest robotic welding line
DLF promoters in last leg of talks for Rs 12-14k crore sale deal
Govt taps newcomers to unlock $7 billion oil and gas assets
Oil slips further below $56 on report of US inventory jump
Foodgrain output may touch record 272 mt this year
BookMyShow acquires 75 per cent stake in Townscript
BSE Q3 net profit drops 17% to Rs 64-cr
Centre whittles down wheat purchase target
Nasscom defers annual growth forecast to May

STOCK IN NEWS

1. Havells to buy Lloyd Consumer for Rs 1,600 crore
2. Paytm to invest Rs 600 crore to expand network
3. US firm & Sun Apollo in talks to sell Chandigarh mall
4. Amazon plans to bring audio books service to India
5. Vodafone, Idea likely to seal merger pact within a month
6. Tech Mahindra sees bigger business from Vodafone-Idea merger
7. Mahindra plans to launch petrol SUV XUV500 in Q1 of financial year 2018
8. Tata Steel eyes retail in Myanmar and Bangladesh
9. Mahindra Electric expects to reach capacity in 2017
10. Nalco to buy 80% power from proposed JV plant
11. SAIL targets highest ever iron ore production in FY17
12. Ruchi Soya-Adani Wilmar JV in limbo