}

Friday, 31 March 2017

31 March 2017 - Views & News

MARKET INSIGHT

Indian markets are likely to open on a negative note based on the global cues. Support for the day is placed at 8475 levels and if breaks then further downside expected.

Nifty Spot Levels

Support 9100 – 9019
Resistance 9218 - 9300

GLOBAL MARKET

• Wall Street gained on Thursday, led by financial shares, after data showed US economic growth was stronger than previously reported last quarter, helped by robust consumer spending, and the tech-heavy Nasdaq set a record closing high.
• The energy sector rose for a third straight day, supported by stronger oil prices and a 8.8-percent gain for ConocoPhillips.
• The Dow Jones Industrial Average rose 69.17 points, or 0.33 percent, to 20,728.49.

Market Update:

Sgx Nifty +24 pts
‎Dow +69.17 pts ,Nsdq +16.80 pts , S&P +6.93 pts , Bovespa -262 pts , Ftse -4 pts , Dax +53 pts  , Cac +20 pts , Nikkei +103 pts now , Crude @ $50.27 brl (-0.08), Brent @ $53.01 brl (-0.08) , Gold @ 1242.70 (-2.30), Silver @ $18.142 (-0.06), Euro @ $1.0683, JPY @ $111.1900, INR @ $64.830

Today's Corporate Action 31st Mar  Ex Date

ASHARI Bonus issue 4:1
INFRATEL Interim Dividend - Rs. - 12.0000
SFCL Amalgamation 


TOP NEWS

ALERT: As per media reports, Lupin, Cipla, Cadila are in fray to acquire  the respiratory drugs portfolio of Novartis AG. The portfolio of brands on offer could fetch as much as $500 million in a sale. Novartis portfolio includes top-selling brand TOBI Podhaler, a drug prescribed for symptomatic relief to patients suffering from cystic fibrosis, a genetic lung disorder. The brands are sold in as many as 60 countries by Novartis  - Long term positive for the company who would acquire (win the bidding) as respiratory drugs portfolio are likely to be the next big revenue generators.

Dilip builcon: The company has received letter of Award from NHAI for four laning from Nalagampalli to AP/Karnataka border under NHDP-IV on EPC mode. The project cost is Rs503.1 crore having length of 47.7km which is to be completed in 24 months. The development is positive for Dilip Buildcon.

FUND RAISING


Bank of India to raise Rs 204 crore by issuing shares to LIC on preferential basis at Rs116.8 per share
OTHER NEWS

JMC projects has secured new orders for commercial and residential projects worth Rs1058 crore; positive for Kalpataru Power

IRB Infrastructure: The company’s board has approved acquisition of 34% stake in its subsidiary Aryan Infrastructure Investments (presently IRB holds 66% stake) from promoter and promoter group entity making it wholly owned subsidiary of the company. Neutral read thru for IRB Infrastructure.

Hero Motocorp offers discounts upto Rs 12,500 to clear inventory of BS3 vehicles; to impact profitability in Q4FY17; stock price already factoring higher discounting impact
Hero Motocorp is offering huge discounts to clear the BS3 vehicles inventory after the Supreme Court has banned the sales of such vehicles after 31st March 2017. Hero is offering rebate of Rs 12,500 on its scooters, Rs 7,500 on premium bikes and Rs 5,000 on entry level mass market motorcycles. Hero has about 10-12 days of inventory and is offering higher discounts as it has limited scope of diverting the inventory to export markets. Also as per the company, converting BS3 vehicles to BS4 is cumbersome process and involves additional costs such as logistics and assembly line expenses apart from the cost of material required to be fitted to comply with BS4 regulations and is preferable to clear the inventory thru higher discounts. Given the higher discounting, we expect Hero’s profitability to be impacted in Q4FY17.   

Maruti Ciaz to be sold through Nexa outlets from April 1, 2017.
Maruti Suzuki India mid-size sedan Ciaz will be sold through its premium channel Nexa from April 1, 2017. Nexa has 250 outlets across India and covers around 95% of the cities. With Ciaz joining Nexa family, contribution from the premium retail chain is expected to be more than 15% of total sales by the end of 2017-18.

M&M considers entry of Ssangyong utility vehicles and introduction of electric vehicles in US, China; positive read thru
Mahindra aims to enhance its investments and presence in the U.S. and Chinese markets through its South Korean auto unit, Ssangyong Motor Co. Ssangyong is expecting to decide by mid year on a plant to build in Chinese market whereas for a U.S. entry would take at least three years. Ssangyong had in October 2016 signed an initial joint-venture agreement with China’s Shaanxi Automobile Group Co., the country’s fourth-largest maker of heavy-duty trucks by output. Mahindra is considering introducing high-end electric vehicles made by its Italian affiliate Pininfarina in the U.S. and China.  

Lux Group rejigs growth strategy; eyes Rs 2000-crore sales by 2020 through premiumisation, portfolio extension and venturing into new market and geographies
Lux Group has reworked its growth strategy to target youth, and expects to clock Rs 2,000 crore sales by 2020, on the back of premiumisation of its innerwear brands and portfolio extensions. The company is now focusing on the Rs 2,400 crore active wear market offering a casual and alternative line of clothing. Presently there are seven exclusive stores, and in the next year the company plans to open 14-15 more stores. Lux Industries, which has a strong foothold in export markets including Africa, Middle East and some countries of South East Asia, is also looking at expanding its footprint in European and US markets.  

Zensar Technologies to acquire Keystone India
Zensar Technologies has entered into a slump sale agreement with Keystone Logic Solutions to purchase entire undertaking and business of Keystone india on a slump sale basis. The cost of acquisition stands at Rs 132.4 crore and is an all-cash deal. Zensar expects the transaction to be completed by the first week of April.

Tata Motors to merge wholly owned subsidiary TML Drivelines with self; no impact on consolidated earnings; Neutral
Tata Motors is planning to merge its wholly owned subsidiary TML Drivelines with itself. TML Drivelines manufactures axles, gearboxes, crankshafts and Forgings for Tata motors commercial vehicles. Since Tata Motors fully owns TML Drivelines, the merger will have no impact on the consolidated earnings. Neutral for Tata Motors.

TCS collaborates with SATS for smart watch solution
TCS announced that it has collaborated with airport ground handling and food solutions provider SATS to develop a smart watch solution for airport technical ramp operations. The Technical Ramp Smart Watch solution was designed to increase operational efficiency by streamlining on-ground processes and enhancing communication, productivity and safety through technology.

Century Plyboards (India): The company has commenced newly set up production facility “Purbanchal Timber Industries” at Palasbari, Kamrup in Assam. Positive read thru for the stock.

Bharti Airtel: Airtel Money partners TUCKSEE to provide electronic property rate payment for Ledzokuku-Krowor Municipal Assembly (LEKMA)
MORE NEWS

India becomes associate member of IEA
Top Indian pharma cos in fray for Novartis’ brands
Lenders get no takers for Mallya's properties again
BoM hit by biggest financial fraud due to UPI bug
Govt's view on lower tariffs contradicts policy: Trai
Govt considering MIP on some aluminium products
India is running out of time on NPAs: K V Kamath
Vinod Rai says govt may merge two large banks
Kotak Mahindra Bank to raise Rs 5,400 crore of equity
BPCL, ONGC pip Reliance in overseas fundraising
NSE IPO: Algo issue resolution and defreezing of funds needed, say experts
Dividend payout of Rs 6,580 crore announced by Vedanta
Status quo on merchant discount rate: RBI
L&T Hydrocarbon Engg wins ₹4,000-cr worth global orders
Bank staff plan campaign against wilful defaulters from April 20
Auto companies offer discounts up to Rs. 12,500 on BS-III models
PTC India Financial Services sells IEX stake for ₹133 crore
RBI may keep rates unchanged in April; cut 25 bps in August: BofAML
India may ease rules for foreign food retail before November
Yes Bank share offering succeeds, second time around
Future Lifestyle Fashions to raise Rs450 crore by diluting stake in investee brands
Home loan interest rates too high for Indian buyers: Survey
Nifty ends at record high, Sensex rises 116 points on GST push
Toshiba to go ahead with Nuclear plant in Andhra Pradesh: Government
India, South Korea to cooperate on startups, tech transfer
BHEL commissions 2nd unit of Yeramarus plant in Karnataka
Telecom Min rules out special treatment to Voda-Idea merger
Centre seeks ways to revive SAIL
Fitch maintains rating watch status on Tata Stee
Insurance coverage of TB negligible in India
EPFO defers decision to invest more in ETFs

STOCK IN NEWS
1. Maruti Suzuki to sell Ciaz through Nexa showrooms from April 1
2. Kotak Mahindra Bank to raise Rs 5,400 crore of equity
3. BPCL, ONGC pip Reliance in overseas fundraising
4. Ashok Leyland has a plan for riding out the BS-III ban: MD Vinod K Dasari
5. Zensar Technologies to acquire Keystone Logic for Rs 132 cr
6. Tata Motors' Pune wage pact may improve industrial relations: Experts
7. BS-III ban: Medium & heavy vehicles to face the brunt
8. MTNL to offer 2GB data a day, unlimited calls within network for Rs 319
9. HMSI launches new BS-IV compliant Dio scooter at Rs 49,132
10. M&M considers electric vehicles for US, China
11. Vedanta announces interim dividend of Rs 6,580 cr; re-appoints CEO till Aug
12. Petronas Lubricants targets 5% market share in India, make it exports hub
13. PTC India sells its stake in IEX for Rs 132 crore
14. L&T Construction wins orders worth Rs 1,725 crore
15. L&T Hydrocarbon bags orders worth Rs 4,000 crore
16. Aurobindo Pharma gets USFDA nod for HIV treatment drug
17. Dilip Buildcon bags Rs 3,269 crore road projects in Maharashtra

Thursday, 30 March 2017

30 March 2017 - Views & News

MARKET INSIGHT

Markets are expected to open to open flat to positive. 8980 – 9000 acts as strong support at current levels. Overall bullish stance will hold in market till support zone holds on closing basis. On the upside 9200 – 9218 will be intermediate resistance area to watch for.

Nifty Spot Levels

Support 9080 – 9019 – 8975
Resistance 9167 – 9218 - 9300

GLOBAL MARKET

• The S&P 500 and the Dow were pressured by declines in financial stocks, while consumer discretionary shares lifted the Nasdaq.
• With an August target date set for a highly anticipated US tax reform bill and the quarter nearing an end, analysts expect the market to trade in a tight range.
• Asian shares edged up to near their highest in two years on Thursday, while the dollar benefited from waning expectations that the European Central Bank was poised to end its easy policy.
• The Dow Jones Industrial Average fell 42.18 points, or 0.20 percent, to 20,659.32s

TOP NEWS

The Lok Sabha passed four GST Bills –positive read through; it would boost sentiments for fragmented product segments where the imple mentation of GST could result in shift of market share from unorganized to organized players such as Building material (tiles, plywood, paints, pipes), auto anci (tyres, batteries, light fittings and other products), branded garments among others

Glenmark reports positive results from Phase 3 trial of Mometasone/Olopatadine (GSP 301) fixed-dose combination nasal spray, used in treating seasonal allergic rhinitis.  GSP 301 is Glenmark’s leading candidate for the company’s first New Drug Application with the USFDA. As of January 2017 the annual value of the US nasal spray market was $1.3 billion – Long term positive for Glenmark.

Alkem Labs gets EIR from USFDA for Ankleshwar API plant (used mainly for internal consumption of API) – Positive for Alkem

Thermax Ltd acquires European company Barite (facility of Weiss Ltd) which is into boiler manufacturing. The acquisition is of strategic advantage to Thermax since it provides additional manufacturing capacity for future expansion and expanding its footprints in Eastern Europe. The amount for acquisition is not disclosed. Positive read thru.

Kotak Mahindra bank launches digital banking service, aims to double customer base in 18 months –Positive read thru in the long term. However, since a wide range of market participants  were anticipating a news about a merger which didn’t materialize, there may be a some kneejerk reaction to the stock.

OTHER NEWS

Reliance Industries LImited (RIL) has completed sale of its 76% stake in Gulf Africa Petroleum Corp (GAPCO) to Total SA. RIL has a announced stake sale in GAPCO in June 2016.

Banking Sector: Banks may get Rs 10k-cr relief for troubled power loans – positive read thru
The Government is set to clear an estimated Rs 10,000 crore relief package for banks, which are facing the prospect of loans to 25 mega power projects turning sour, because promoters are unable to find buyers for their capacity

Dabur announces commissioning of Rs 250 crore manufacturing facility in Assam – positive read thru
Dabur India Ltd announced commissioning of its new manufacturing facility in Tezpur, Assam, the largest manufacturing facility for Dabur worldwide. The plant is set up with an investment of Rs 250 Crore and will manufacture the entire range of Dabur's Ayurvedic Medicines, Health Supplements, Hair Oils, Shampoos, Toothpastes, Skin Care and Home Care products.

Reliance Infrastructure: The company has received NHAI’s consent for its planned Rs3000 crore Infrastructure Investment Fund. The company wants to come out with the issue by the end of April. The InvIT will initially own ten of the company’s road projects representing 770kms of highway projects. The development is positive read thru for the stock.

Reliance Defence and Engineering, Reliance Infrastructure: Reliance Defence to exit CDR this week – positive read thru for both the stocks
The company expects to exit CDR by March 31 as per media reports. The company’s debt worth around Rs6800 crore would have extended maturity period of 18 years with lower interest rate. The lenders would convert Rs650 crore debt to equity at a price above Rs60 per share. Post CDR, Reliance Infrastructure would have 31% stake in Reliance Defence and Engineering. The development is positive read thru for both Reliance Defence and Engineering and Reliance Infrastructure.

L&T- The Madras High Court has restrained L&T Realty Limited from selling its 51% stake in L&T South City Projects to Pragnya Group for Rs190 crore. This is due to petition filied by Aditya Birla Real Estate Fund in the court.  Neutral read thru.

Mahindra Lifespace Developers: The company has sold Napean Sea Road, South Mumbai property upon the terms and conditions approved by the Shareholders. Positive read thru for the stock.

TCS and Siemens jin haonds to deliver plant solutions for Connected Digital Enterprise
Siemens product life cycle management (PLM) software business and TCS have expanded their long-standing partnership to deliver a comprehensive set of plant solutions for enabling the connected Digital Enterprise. TCS will participate in the Siemens MOM Expertise Alliance Center (MEAC), a community of highly skilled and strategic partners providing MOM-specific services to manufacturers. This will further enhance TCS’ ability to provide its current and future customers with high performance MOM solutions to enhance manufacturing operations.


MORE NEWS

Nation now gets ready for GST in next three months
'Walmart okay with selling only Made-in-India goods'
Goods will become slightly cheaper after GST: Jaitley
Rupee enters 64-terrain after 17 months, up 13 paise
SC bans sale of non-BS IV vehicles from April 1
Direct recruitment in government jobs dips by 89%
IATA questions laptop ban on some flights to US, UK
Kotak launches zero-charge digital bank account
RInfra's Rs 3,000-cr InvIT fund gets NHAI approval
Rajya Sabha passes Finance Bill
RIL completes Gulf Africa Petroleum Corporation stake sale
Union MF, BOI Axa explore merger option
Coal India plans private mining consultancy foray
Rel Jio's Prime membership base close to hitting 50 million
EU blocks Deutsche Börse's $14-billion takeover of LSE
DBT leads to Rs. 34,000 cr savings for govt: FinMin
Australian company keen to invest in Adani’s coal mine project 
JP Morgan group pays Rs 2.75 cr, settles case with SEBI
Tube Investments rolls out online bicycle brand
Amul vs HUL ice-cream ad case adjourned to Monday
`8.7 lakh telcom forms non-compliant with norms'
India becomes net exporter of power for the first time
Tata ties up with Alibaba to take Tetley tea bags to China
RBI says all payment systems to remain closed on 1 April
Monsanto termination of Nuziveedu Seeds sub-licence pact illegal: Delhi HC
ITR form made simpler, e-filing of income tax to start from 1 April
Expensive valuations reign in bulls despite India stock markets’ rally
Kyrgyzstan for enhanced business, cultural ties with India
Bharti Airtel beats Reliance Jio, becomes fastest network in metro cities
Scramble to exchange money as March 31 deadline nears
Sensex ends 122 pts higher ahead of F&O expiry, SBI soars
EU drug approval plan triggers worries
Fund flows shore up rupee to 17-mth high of 64.86
Bad debt issues spook steel industry

STOCK IN NEWS

• Heavy discounts likely to dispose of car stock
• While telcos merge, investors rush for tower assets
• Centre approves strategic divestment of three loss-making Sail units
• Tata UK expects mobility of skilled manpower
• Daiichi seeks external auditor to scrutinise Singh brothers' assets
• Supreme Court bans sale of BS-III vehicles from April 1
• Coal India plans private mining consultancy foray
• Reliance Jio's Prime membership base close to hitting 50 million
• RIL completes Gulf Africa Petroleum Corporation stake sale
• Madras High Court restrains L&T Realty stake sale in township project
• Tata Motors launches compact sedan Tigor to take on Swift Dzire
• L&T bags Rs 2,400-crore job orders

Wednesday, 29 March 2017

29 March 2017 - Views & News

MARKET INSIGHT

Markets are likely to open on positive note backed by strong global clues, Bias for nifty remains positive, short term & medium term targets on the upside are 9230 & 9500 respectively. On the flip side, the range of 8980-9000, will act as a strong support area. For the intraday traders strategy will be to buy above 9134 with stoploss of 9094 for targets of 9180-9215.

Nifty Spot Levels

Support 9019 – 8975 – 8903
Resistance 9133 – 9167 - 9218

GLOBAL MARKET

 • US stocks ended sharply higher on Tuesday, with financial and energy shares surging as data showed US consumer confidence soaring to a more than 16-year high.
• US consumer confidence surged to a more than 16-year high in March amid growing labour market optimism, while the trade deficit in goods narrowed sharply in February. 
• The economy's strengthening fundamentals were bolstered by other data showing further increases in house prices in January.
• The Dow Jones Industrial Average rose 150.52 points, or 0.73 percent, to 20,701.5.

 Market Update:

Dow +150.52 pts ,Nsdq +34.77 pts , S&P +16.98 pts , Bovespa +332 pts , Ftse +49 pts , Dax +153 pts  , Cac +28 pts , Crude @ $48.54 brl (+0.17), Brent @ $51.53 brl (+0.08) , Gold @ 1250.00 (-5.60), Silver @ $18.163 (-0.08), Euro @ $1.0819, JPY @ $111.1100, INR @ $65.125

Today's Corporate Action 29th Mar  Ex Date

BEL Interim Dividend - Rs. - 0.9000
HINDZINC Special Dividend - Rs. - 27.5000

TOP NEWS

ALERT: Kotak Mahindra Bank: As per media reports, Kotak bank is planning to raise capital by selling shares for a possible buyout of a non-banking finance company, which may be Mahindra & Mahindra Financial Services Ltd. – Sentimentally positive for M&M Fin though it would finally depend upon valuations and structure of the deal; Avoid buying Kotak Bank before the deal as it has already seen speculative run up recently.
Ashok Leyland to invest Rs 400 Cr on new LCV development; eyes to triple sales in next three years; positive read thru… (Details in other news)

Britannia forms joint venture with Chipita of Greece for producing and selling ready-to-eat croissants in India (already highlighted the news in 21st February 2017 FNA) – positive read through for the stock as more products in bakery space could launch in near future……(Details in other news)

Alkem laboratories Baddi unit (recently inspected by the USFDA) gets 3 procedural 483 observations from the USFDA – Sentimentally negative for Alkem.

Power Sector- Mega Power Policy to be announced today; stock in focus- NTPC, JSW Energy, CESC, Adani Power etc
·         To allow extension of 5 Yrs for Power Projects
·         To sign PPAs extension
·         To allow power companies to enjoy customs & import duty benefits
·         Power Purchase Agreement & bank guarantee to be in proportion for power projects

As per media news, Asian Paints has taken price hike of 2.5%, effective from May 1st 2017, positive for the stocks

Lupin expects muted growth in the US despite new launches. Growing competition in the sale of the anti diabetes drugs, Glumetza and Fortamet, with the launch of an authorised version of Glumetza by Valeant; and an expectant launch by Sun Pharma and Teva, is likely to slacken Lupin's hold in the market – Negative for Lupin.

 OTHER NEWS

Sundram Fastners has hiked its stake in Subsidiary company Sundram Precision Components Limited to 100% from the exisiting 76% stake. The company has bought 16.8 lakh shares  at a price of Rs 31.45 per share. The subsidiary company is engaged in the manufacture of parts for motor vehicle, sintered  parts such as valve guide and valve seats. The revenue of the subsidiary was at RS 25.4 Cr.  The subsidiary had reported a profit of Rs 1.2 crore in FY16. The acquisition of stake is unlikely to have material impact on earnings of Sundram Fasteners. Neutral read thru.

Britannia forms joint venture with Chipita of Greece for producing and selling ready-to-eat croissants in India (already highlighted the news in 21st February 2017 FNA) – positive read through for the stock
Britannia Industries has entered into a joint venture with Greek firm Chipita SA for producing and selling ready-to-eat croissants in India. The estimated investment in the joint venture company -- Britchip Foods Ltd -- in Phase I is Rs 100 crore. As per the agreement, Britannia Industries will hold 60 per cent of total share capital of the joint venture company, while Chipita SA would hold the rest. As per the JV agreement, Britannia has the right of first refusal in case Chipita intends to sell its stake after the expiry of lock in period of ten years.

ITC - the Competition Commission has approved the proposed acquisition of Johnson & Johnson's two brands, 'Savlon' and 'Shower to Shower', by the company with certain attendant inventories, know how, molds and promotional materials – sentimentally positive for ITC’s non-cigarette FMCG business

Pincon Spirits continued its retail expansion; acquire 100 goods transport vehicles from Tata Motors for increasing its captive logistics infrastructure
The West Bengal Government has decided to issue On-shop licenses to all existing Liquor Off-shop vends situated within 500 meters of all National and State Highways in the State of West Bengal w.e.f. 1st April, 2017. This positive decision will enable Pincon Spirits to grow its presence in West Bengal and capture opportunities which will drive overall business growth. The company has signed an MOU for takeover of five additional liquor retail outlets in West Bengal. Further, Pincon Spirits has acquired 100 goods vehicles from Tata Motors for increasing its captive logistics infrastructure for catering to transportation of much greater volumes of goods and also for cost curtailment in transportation (add-on to margins).
View: We believe all these initiatives should help the company to see good revenue performance along with improvement in the profitability in the coming years.

Ashok Leyland to invest Rs 400 Cr on new LCV development; eyes to triple sales in next three years; positive read thru 
Ashok Leyland will invest Rs 400 crore to develop new light commercial vehicles (LCVs) within the next two years and plans to triple its sales in the segment by 2019-20. The company will rollout new models to be developed on two new platforms and is also eyeing export markets When Ashok Leyland was in partnership with Nissan, their joint venture agreement prevented it from developing its own LCV nor was it allowed to export. Ashok Leyland is targeting to triple LCV sales (annual sales of one lakh units by 2019-20 as against current rate of 35,000-36,000 units a year. As per the company it already has the dealer network and needs new products to ramp up volumes. Positive  

IL&FS Transportation: The company plans to refinance Rs9000 crore; to help reduce interest cost by 200BPS – Positive read thru for the stock.
The company is expected to refinance loans amounting to Rs6000 crore on a project level and about Rs3000 crore on a corporate level by issuing non convertible debentures. The timing of the NCD is not confirmed. Post NCD and refinancing, the average interest rate is expected to drop by 200 basis points from 11.5-12.75% to 8.5-10%. The interest saved should be between Rs300-400 crore on account of both project and corporate level refinancing and NCD issue respectively. The development is positive read thru for the stock.

Tata Motors will launch its sub four meter compact sedan “Tigor” tomorrow. Tigor will be based on the Tiagio platform and will replace the Indigo e CS. The car is expected to be priced at about Rs 5.5 lakh (ex showroom) and will revamp the Tata domestic passenger vehicle portfolio. Positive

Infosys joins Open Invention Network Community
Open Invention Network (OIN) announced that Infosys has joined OIN as a community member. Infosys believes that open source software (OSS) is a necessary enabler as enterprises worldwide use the Internet to build new consumer-centric and connected applications.

Sanofi India gets US FDA Nod For Dupilumab Injection, used for treatment of moderate-to-severe Atopic Dermatitis, positive read-thru

CV industry sees slower growth due to limited prebuying before emission norm change, uncertainty on GST and low cargo availability; FY17 to end with 5-6% growth; CV stocks (Ashok Leyland, Tata Motors and Eicher Motors) already factoring growth slowdown
Commercial Vehicle sales growth on account of pre buying ahead of the new emission norms are likely to be limited given the slow business environment and uncertainty due to GST,  and low availability of cargo from the industrial sectors. Also uncertainty relating to sale of BS-III compliant vehicles post April 2017 has led to spike in industry-wide inventory levels  which is estimated at about 74,000 units (1.3x of average monthly sales).  The CV industry growth for FY2017 is expected to slow down to 5-6% (11MFY17 growth stood at about 5%). CV stocks viz Ashok Leyland, Tata Motors and Eicher Motors are already factoring lower growth.

PVR aims to build organically, expand network to tier III, IV cities
PVR is looking at around 90% jump in revenue to around Rs 4,000 crore in four to five years driven by expansion across the country. The company has set a target of 1,000 screens in next four to five years with presence in 100 cities by then. It has 570 screens in around 50 cities at present. F&B strategy is to get the customers spending on F&B to at least 50% (currently 40%) of what he spending on the ticket.

Persistent Systems to provide integration and implementation services to support customers using Amazon Connect
Persistent Systems announced it is among the first AWS Partner Network (APN) Partners to create a support practice around Amazon Connect. Persistent Systems plans to initially focus on key verticals including Finance and Healthcare.

Music Broadcast rebrands 8 Radio Mantra FM stations as Radio City
Music Broadcast is rebranding its eight Radio Mantra FM stations as Radio City, the company’s larger brand with 31 stations. MBL operates eight Radio Mantra stations in Agra, Bareilly, Gorakhpur, Varanasi, Jalandhar, Ranchi, Hissar and Karnal. The company plans to expand into tier II and tier III cities and build new intellectual properties (on and off-ground) to strengthen “Radio City” brand

Wadias to buy out Solvay’s 25% stake in National Peroxide….Positive read through for the stock
Wadia Group, has agreed to acquire a 25% stake held by Belgium’s Solvay Chemicals in National Peroxide. Wadias, who currently control 45.4% in National Peroxide will increase its holding to 70% post the transaction. National Peroxide is the largest domestic producer of hydrogen peroxide, with a current capacity of 95,000 MTPA and has a domestic market share of 45%.

MORE NEWS

Modi govt targets 25 bn digital transactions in FY18
NITI Aayog may seek closure of 7 more sick CPSEs
US consumer confidence hits 16-year high
Banks looking for lower savings a/c interest rates
'Excess Rs 3L cr in economy, need for digital push'
Kotak Bank likely to buyout M&M Financial Services
Prime gets lukewarm response; Jio may extend offer
GST to be levied on renting, EMI on under-construction property from July 1
India imposes import duty on wheat, tur dal
Sebi gets back discretionary powers on penalties
Indian Oil to supply fuel to Nepal for the next five years
Cairn-Vedanta merger gets all approvals except from RBI
SBI spent Rs 775 crore in maintaining Jan Dhan accounts, says govt
Govt to borrow Rs. 3.72 lakh crore in H1 FY18
SEBI order based on untenable reasoning, says Reliance Ind
Airtel sells 10.3% stake in Bharti Infratel to KKR, Canada pension board for Rs. 6,194 cr
Levy for non-maintenance of minimum balance should be reasonable: Govt
Suven Life gets product patent for neuro-degenerative molecule 
Revised GST legislation may pinch working capital of industries
Irdai wants insurance policies issued in demat format
NHB to revamp its residential housing index
Tencent buys 5% stake in Elon Musk-led Tesla for $1.8 billion
Sharepro scam: Sebi plans new rules for share transfer agents, registrars
Monsanto termination of sub-licence with Indian co illegal: HC
I-T identifies 1,155 shell cos used to launder Rs 13,300 cr
High court bans mining in Uttarakhand for four months
India now top global source of affordable medicines to Unicef
Sensex bounces 172 pts on positive global cues, funds inflow
Anil Ambani gets a seat on Atlantic Council advisory board
Toyota wants govt to frame policy to phase out BSI,II vehicles
Qatar Airways confident of clearing FDI hurdles in India
Lux Industries is merchandise partner of KKR

STOCK IN NEWS

 • Sluggish export growth may hit apparel industry
• Airtel sells 10.3% stake in Bharti Infratel to KKR, CPPIB for Rs 6,194 cr
• As Unilever reviews business, HUL eyes recovery
• L&T in race against time to meet FY17 revised order inflow guidance
• Tractor maker Escorts plans cost cutting, to launch VRS for staff
• Ranbaxy's Singh brothers known for lucky timing find time in short supply
• Lupin expects muted growth in the US despite new launches
• Cairn-Vedanta merger gets all approvals except from RBI
• Infosys joins open source community to share intellectual property with cos
• ED attaches Rs 263 crore assets of Deccan Chronicle group
• Tesco to pay $269 million to settle false accounting charges
• USFDA gives final nod for Aurobindo's Meropenem anti-bacterial injection
• ICICI Bank partners Truecaller for UPI-based mobile payment solution

Tuesday, 28 March 2017

28 March 2017 - Views & News

MARKET INSIGHT

Markets are likely to open positive. The range of 8980-9000, which had earlier acted as a resistance zone, is now providing support to the Index.

Nifty Spot Levels

Support 9000 – 8975 – 8903
Resistance 9133 – 9167 - 9218

GLOBAL MARKET

• The S&P 500 cut earlier losses on Monday to end slightly lower, while the Dow declined for an eighth straight session, as investors assessed how the defeat of President Donald Trump's first major legislative action would impact the rest of his agenda.
• With stocks soaring to record highs after Trump's election, investors are concerned about the fate of his economic plan, including tax reform and infrastructure spending. 
• The Dow Jones Industrial Average fell 45.74 points, or 0.22 percent, to 20,550.98.

 Market Update:

Dow -46.74 pts ,Nsdq +11.64 pts , S&P -2.39 pts , Bovespa +454 pts , Ftse -43 pts , Dax -68 pts  , Cac -3 pts , Crude @ $47.84 brl (+0.11), Brent @ $51.04 brl (+0.06) , Gold @ 1252.95 (-2.75), Silver @ $18.082 (+0.11), Euro @ $1.0861, JPY @ $110.7600, INR @ $65.055

TOP NEWS

Kotak Mahindra Bank is looking for shareholder approval for raising fresh equity capital, but has not disclosed price, amount and the purpose for the same  – Sentimentally positive, speculation over the end use of the funds raised, especially for inorganic activities may pique investor interest in the stock since the bank has sufficient 15.5% CET 1 as on December 2016

Skymet Weather forecasts below normal Monsoon at 95% for India in 2017 – Sentimentally negative for Consumer goods, retail, textile, Agri-inputs and rural focused auto companies – Hero Motocorp and M&M; if  forecast holds true, it will continue to put stress on the consumer demand environment (especially in the rural market), which are dependent on good monsoon for their pick up in revenue
According to Skymet Weather, Monsoon 2017 in India is likely to remain below normal at 95% (with an error margin of +/-5%) of the long period average (LPA) of 887 mm for the four-month period from June to September. This is because of El Niño, whose effect will be visible July onwards. Most of the weather models are indicating towards 60% chance of El Niño coming into existence during the second half of the Monsoon. There is 25% chance of below normal rains and 15% chance of drought.

Aurobindo clarifies that the suspension of drugs by European Medicines Agency (EMA) will have an impact of less than USD 5 mn (~ Rs 30 crores) per annum as some of the products are awaiting for approval in some countries and currently only 5 products are affected – Positive for Aurobindo.

Government bats for sales of BS-III vehicles after April 1, SC decision awaited. Positive for most auto companies if Supreme Court agrees (especially CV manufacturers like Ashok Leyland, Hero Motocorp) ….(details in Other News)

Dilip Buildcon: The company has been declared as the lowest bidder for two projects aggregating Rs580.5 crores on EPC mode in Maharashtra by Ministry of Road Transport & Highways. The development is positive for Dilip Buildcon.

Tyre’s companies  to be focus today as the commerce ministry will be meeting these companies to discuss anti-dumping duty, already seeing strong run up from last week

IDFC Bank Has sold nine stressed loan portfolios to Edelweiss Asset Reconstruction Company for about Rs5,000 crore – Sentimentally positive as legacy issues in asset quality gets cleaned up but the details related to haircut taken by IDFC Bank is not clear

KPIT Tech’s promoters have raised their stake in the company to 18.94% from 16.72% earlier – Positive read thru

Gayatri Projects: Sembcorp to invest USD 600 million in power unit; Sembcorp denies fresh capital infusion – Neutral read thru for Gayatri Projects
Sembcorp Industries is set to provide about USD600 million to its Sembcorp Gayatri Power unit (1320MW power plant in A.P.) as per media reports. The funds will be used by Sembcorp Gayatri to pay down its domestic debt from about USD 1.05 billion to about USD 450 million. However Sembcorp has clarified that there is no fresh capital infusion being planned. 

 OTHER NEWS

Government bats for sales of BS-III vehicles after April 1, SC decision awaited. Positive for most auto companies if Supreme Court agrees (especially CV manufacturers like Ashok Leyland, Hero Motocorp)
The central government came out in support of automotive industry arguing before the Supreme Court that the March 31,2017 deadline is for manufacturing and not sales or registration. Quoting previous similar changes in emission norms (from BS-II to BS-III for instance) the government stated that in each case the deadline was meant for manufacturing while sales and registration of previous generation vehicles were allowed even after April 1.The SC will continue to hear the case today and we await the final judgement. Automobile has unsold inventory of 824,000 BS3 vehicles worth over Rs 12,000 crore, and the inventory runs the risk of being turned into junk if the apex court rules that such vehicles cannot be allowed to be registered post April 1, 2017.

L&T- The Building & Factories business segment of the construction arm of L&T has won orders worth Rs2,490 crores; positive

Berger Paints starts the commercial production at its expanded capacity at Jejuri plant at Pune; the company invested about Rs100crore for the expansion of the capacity – positive read through for the stock as company aims to double the revenues over the next five years through enhanced capacity

Maruti Suzuki's compact SUV Vitara Brezza has crossed 1.1 lakh units sales mark in the first year of launch. It currently has pending bookings of over 50,000 units with waiting period of around 20 weeks depending on variant. Positive.

IL&FS Transportation (ITNL), IL&FS Engineering and Construction: A joint venture promoted by the ITNL and IL&FS Engineering and Construction in the ratio of 51:49 is declared lowest bidder for package no P-2 by the Madhya Pradesh Road Development Corporation. The contract amount is Rs175.5 crore to be completed within 20 months. The development is positive read thru for both the stocks.

Technofab Engineering received total orders worth Rs335 crore rupees from Powergrid Corp and the Ministry of Agriculture Resources, Rwanda -- Positive

Motherson Sumi Systems is likely to foray into railway segment with the recent acquisition of Finnish based wiring harness maker OKC Group Plc. Positive read thru

Lux Industries to be KKR’s merchandise sponsors for two seasons - the company is looking at cashing on the sports frenzied consumers with this sponsorship – positive read through
Lux industries flagship brand Lux Cozi will be one of the official sponsors and the only merchandised partner for Kolkata Knight Riders for the upcoming Indian Premier League (IPL) season and also next year. The jerseys would include round necks, polos, fan jerseys and many more designs priced between Rs 250 and Rs 450. The merchandise will be available at in-stadium kiosks, online portals, kiosks in city malls and also at Lux Cozi’s 500 odd multi brand outlets across the city.

Jindal to enter paints business in mid-2018, with JSW Paints, and would invest Rs 1,000 crore – the group has its cement (JSW Cement) and steel (JSW Steel) distribution in place. Venturing into the paint business will make the group a one stop solution where it can offer cement, steel and paint to consumer
The Sajjan Jindal family is investing Rs 1,000 crore to build two factories to foray into the paints segment, with JSW Paints, and is targeting an April 2018 launch.  There will be one factory coming up in Vijaynagar in Karnataka (a decorative unit) and another coming up in Vasind in Maharashtra (for industrial segment). Initially the focus will be on the southern and the western markets and the company is also looking at installing capacity in West Bengal in the next few years

Heidelberg Cement: credit rating upgraded – Positive read thru for the stock
India Ratings and Research (credit rating agency) vide its communication dated 27th March 2017 has upgraded the Long-Term Issuer Rating of Heidelberg Cement India Limited to "Ind AA+" (with stable outlook) from "Ind AA". The credit rating with respect to 370 numbers of Non-Convertible Debentures of INR 10 million each aggregating to INR 3700 million allotted on 16th December 2013, has also been upgraded to 'Ind AA+" (with stable outlook) from "Ind AA". Positive read thru for the Heidelberg Cement.

The Great Eastern Shipping company: G E Shipping took delivery of a secondhand Suezmax crude carrier “Jag Lakshya” (2011 built) of about 157,000 dwt. The company had contracted to buy the vessel in December 2016. The development is positive read thru for G E shipping.

Reliance Industries: As per media reports, Reliance JIO is considering to extend the deadline for subscription to JIO Prime membership by one month to April 30, 2017. We believe that the extension is aimed to maximize retention rate from the 100 million subscribers added by Reliance JIO.

Shriram EPC, received order worth $107.8 million from United Republic of Tanzania, Tanzania in JV with Larsen & Toubro.

Balaji Telefilms: OTT platform to launch on 16 Apr, ties up with Micromax, MobiKwik, stock to be focus
Balaji Telefilms’ subscription-based digital entertainment platform ALT Balaji is set for its commercial launch on 16 April. Balaji Telefilms, which is banking on its OTT platform for future growth, also announced a strategic partnership with the mobile brand Micromax and mobile wallet Mobikwik. ALT Balaji’s mobile platform will come pre-loaded with Micromax mobile handsets. The app will debut with six new shows and will be followed by a new show every 15 days.

IFB Inds board approves acquisition of  Global Automotive, Singapore for Rs20 crore

JSW planning foray into paints biz by  April 2018, to spend around Rs1000 crore as

Tata Communications partners with Continuant to enhance digital cloud communication platforms
Continuant announced an extension of its strategic partnership with Tata Communications to provide dedicated hosted Cisco collaboration solutions to enterprise customers worldwide. The partnership combines the strengths of Tata Communications’ global connectivity and platform capabilities with Continuant’s industry-leading experience maintaining existing legacy systems and transitioning companies to the cloud. According to a research study by Global Market Insights, the unified communications market is forecast to hit $96 billion by 2023.

STOCK IN NEWS

1. Sun Pharma looks to shine with tiny deals
2. Zydus Healthcare buys Mumbai office property for Rs 172 cr
3. Hyundai India projects extra Rs 13,000-cr investment by 2022
4. Maruti Vitara Brezza sales cross 1.1 lakh units in India
5. Lupin expects muted growth in the US despite new launches
6. Reliance Jio offers additional data up to 120 GB to Prime users
7. Divi's weighs share buyback following sharp fall in share price
8. Nissan launches new version of SUV Terrano for Rs 13.6 lakh
9. After PKC buy, Motherson Sumi may bid to acquire a Bosch arm
10. BHEL commissions 250 mw eco-friendly power plant in Gujarat
11. Dr Reddy's to market Integra's products in India.

Monday, 27 March 2017

27 March 2017 - Views & News

MARKET INSIGHT

 Domestic equity markets are likely to open on a flat note on Monday following global markets. The investor’s would eye developments related to the tabling of four GST-related bills in the Lok Sabha during the day and Asian markets’ reaction to the collapse of the Trump administration’s new healthcare bill.  

Nifty Spot Levels

Support 9000 - 8975 – 8903
Resistance 9133 – 9167 - 9218

GLOBAL MARKET

• US shares pared losses to end slightly lower on Friday after Republicans pulled their bill to overhaul the US healthcare system due to a shortage of votes, dealing a blow to US President Donald Trump, while European shares fell ahead of the decision.
• Oil rose modestly in a spate of late-day activity, but fell on the week as concerns persisted over an excess of crude. 
• The Dow Jones Industrial Average fell 59.86 points, or 0.29 percent, to 20,596.72.

 Market Update:

Dow -59.86 pts ,Nsdq +11.04 pts , S&P -1.98 pts , Bovespa +322 pts , Ftse -3 pts , Dax +24 pts  , Cac -11 pts , Crude @ $48.15 brl (+0.18), Brent @ $51.09 brl (+0.17) , Gold @ 1253.00 (+4.5), Silver @ $17.862 (+0.11), Euro @ $1.0847, JPY @ $110.4700, INR @ $65.2950

Today's Corporate Action 27th Mar  Ex Date


COAL INDIA Interim Dividend - Rs. - 1.1500
IBVENTURES Interim Dividend - Rs. - 1.000
PTL Spin Off

TOP NEWS

ALERT: Aurobindo, Cadila & Strides in focus: European drug regulator,[European Medicines Agency (EMA)] has recommended the suspension of total 300 drugs or their applications. It includes 100 drugs, 5 drugs and 4 drugs of Aurobindo Pharma, Strides Arcolab and Zydus Cadila, respectively – Big negative for Aurobindo; Cadila and strides will have minimal impact.

ALERT: Dr Reddy: As per media reports, USFDA to start inspection at Dr Reddy’s Srikakulam Facility – Stock to remain in focus for next few days.

SEBI has banned Reliance Industries LImited (RIL) from trading in equity derivatives market for a year and also demanded Rs1000 crore as penalty (including interest) related to trades in erstwhile company Reliance Petroleum. RIL plans to challenge the order in Securities Appellate Tribunal  - Sentimentally negative for RIL.

Supreme Court has indicated it may ban/put restrictions/impose additional costs for sales of BS3 vehicles post April 1, 2017; final order to be issued today; negative read thru for auto companies (excluding Maruti Suzuki)—No impact on Maruti (no BS3 inventory) other auto cos to be negatively impacted especially Ashok Leyland.....(details in other news)


 OTHER NEWS

Skipper has secured new orders worth ~Rs405 crores for supply of transmission towers to the projects of PGCIL, Transmission Corporation of Telangana & Power Transmission Corporation of Uttarakhand; Positive

Supreme Court has indicated it may ban/put restrictions/impose additional costs for sales of BS3 vehicles post April 1, 2017; final order to be issued today; negative read thru for auto companies (excluding Maruti Suzuki) - No impact on Maruti (no BS3 inventory) other auto cos to be negatively impacted especially Ashok Leyland
The Supreme Court has asked automobile companies not to frustrate the government's initiative to check increasing levels of pollution by selling BS-III vehicles which they are holding in stock. The automobile companies have approached the apex court to dispose of their stock as the Bharat Stage IV (BS-IV) emission norms are to come into force from April 1, 2017. During the hearing, the bench it may either ban registration of BS-III vehicles or allow their registration but ban plying of such vehicles in major cities or ask the companies to pay costs for creating health hazards and reimburse the Centre which spent enormous money in upgrading fuel standard. The final order is awaited today. Automotive companies hold about 20-30 days inventory of BS 3 vehicles (2W companies have about 20 days of inventory while CV players have inventory of about 1 month) and may have to take inventory write down or have to sell inventory at higher discounts. Negative read thru for auto OEM’s excluding Maruti Suzuki as Maruti has no stock of BS3 vehicles.   

The Bayer – Monsanto deal has been rejected by the CCI (competition commission of India) on technical grounds. The media report further suggests that both the companies would be re-filing the application with the CCI. However the new is not confirmed by Monsanto India further clarity is awaited on this.

Maruti Suzuki launches Alto K10 Plus Edition in India with new features; positive read thru
Maruti Suzuki has launched the Alto K10 Plus edition at a price of Rs 3.40 lakhs, ex-showroom, Delhi. The Alto K10 Plus edition gets cosmetic updates on the exterior such as rear spoiler, wheel arch chrome, fog lamps with chrome accents, body coloured ORVM's, body side moulding and chrome belt line on windows. Inside the cabin, it features front power widows and piano finish stereo. New features include central locking and reverse parking sensors.

NBCC Board to consider interim dividend on March 29, 2017

Bajaj Auto and Japan’s Kawasaki have agreed to end their alliance for sales and after sales service in India; Neutral
Bajaj Auto and Kawasaki have announced to end their alliance for sales and services in India. Bajaj Auto is focusing on its partnership with Austrian firm KTM, where it is distributing KTM products thru its Probiking outlets. However, Bajaj and Kawasaki will continue to maintain their co-operative relationship across the rest of the world for current and future businesses. The news is neutral for Bajaj Auto as it distributes less than  1,000 units of Kawasaki bikes per month and the same number would be partially offset by increasing the distribution of KTM bikes.

Punjab National Bank has seized 39 properties involving Rs 9,325.8 crore till December 2016 while State bank of India has seized 266 properties involving Rs 3,183.7 crore into possession during the same period – Positive read thru for PNB and SBI

Banking Sector: Finance ministry and RBI are working together to create a proposal plan to tackle NPAs. It is also expected to address DRT, SARFAESI and SDR, S4A norms which will facilitate resolutions of large ticket willful defaults. The plan is expected to be announced by end of March 2017 to early April 2017 – sentimentally positive

A three member panel has started hearing on validity of government claim of $1.55 billion from Reliance Industries Limited (RIL) for unfairly producing ONGC's gas from its KG basin fields. The panel plans to complete the hearing on the case within a year. 

SBI may see its workforce reduced nearly 10% by 2019 on account of lesser hiring, retirements and digitalization  – Neutral read thru

SBI Initiates Process To Sell 10% Shares Of SBI Life Via IPO – sentimentally positive for SBI

MORE NEWS

No plan to introduce new denomination notes: RBI
FPI inflows hit $6b in March on hopes of more reforms
OPEC, non-OPEC panel suggests output cut extension
Arbitration on compensation in RIL-ONGC row starts
Jio will enable Indians to cut cord: Sling TV CEO
Motherson Sumi offering over $600 mn for Bosch's arm
CBDT to waive interest liability if tax demand paid in retrospective cases
Govt may table GST Bills in Parliament on Monday
Coal India announces second interim dividend for 2016-17
General insurance premium set to go up from April 1 as Irdai gives go-ahead
SBI workforce may see 10% reduction by 2019; hiring to fall by 50%: MD
Puzzolana eyes US acquisition
RPL share sale: RIL’s explanation for ₹447-cr ‘illegal gains’ made post-facto, says SEBI
GIC may be first PSU general insurer to launch IPO
Emami Infra eyes London renovation contracts 
JSW Group to invest ₹7,000 crore in global port business over 3 years
CBEC rechristened Central Board of Indirect Taxes and Customs 
CAG to audit fallout of demonetisation
Hindustan Zinc plans solar power projects worth Rs425 crore by next year
Shriram Properties to invest Rs15,000 cr on realty projects
Bank union protests RBI decision to keep branches open next week
BERC approves 55% power tariff hike in Bihar
At 23rd spot, HDFC Bank MD Aditya Puri beats Facebook's Mark Zuckerberg in Barron's 30 best CEO's list
Exchange of Rs 4,500 in old notes allowed in Nepal: RBI
FinMin, RBI working out new mechanism to tackle NPAs
Apple stays in hunt for duty sops in India
Dividend pressure on PSUs to meet disinvestment earnings gap
Govt plans big data research to boost exports
TVS Motor in line to achieve 18% market share in two years

STOCK IN NEWS

1. GE Healthcare to spend $300 mn on affordable solutions in India, South Asia
2. Jagran Prakashan consolidates radio biz
3. Bajaj bats for BS-IV but has 80k BS-III units
4. CIL on Sunday came out with a second interim dividend of Rs 1.15 per share for the current financial year.
5. HAL finalises plan to make 1000 military copters
6. Shriram Properties to invest Rs 15,000 cr on realty projects in 7-8 years
7. Mexico's Cinepolis to invest Rs 250 cr in India, open 100 new screens
8. India becomes third largest aviation market in domestic traffic
9. Ford India plans to hike prices by up to 2% from April
10. TVS trumps Hero to become 2nd largest scooter maker in April-Feb period
11. JSW Group to invest Rs 7,000-cr more in ports sector by 2020