Posts Tagged ‘L&T’

Weekly Update 18th – 22nd October 2010

Most of the world markets rallied in the week gone by on the buzz of further quantitative easing by U.S. Without giving details about the strategies on how the central bank will act its Nov. 2-3 meeting, Federal Reserve Chairman Bernanke said additional monetary stimulus may be warranted because inflation is too low and unemployment is too high.

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Fed is considering ways for raising inflation expectations to encourage people to believe that prices will start rising at a faster pace so that they would spend more of their money now. Retail sales in U.S.climbed more than forecast as purchases rose 0.6 percent following a 0.7 percent gain in August and manufacturing in the New York region expanded in October at a faster pace than anticipated.

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China’s Shanghai Composite Index saw gains of 8.5 percent on the anticipation that China’s banks show strong earnings growth this quarter as the lending has beaten the forecast. Moreover the strong exports growth of 25.1 percent in September mirrors the strong underlying economic momentum. The country’s foreign-exchange reserves, the world’s largest, surged by a record to $2.65 trillion at the end of September.

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India’s wholesale price index rose to rose 8.62 percent in September from a year earlier after an 8.5 percent gain in August. Manufactured product inflation and Food price inflation rose by 0.3 percent and 1.6 percent respectively in September fromthe previous month. RBI Chief Subbarao said that inflation in India is being “quite stubborn,” a sign that controlling prices remains the central bank’s priority.

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Reserve Bank Deputy Governor Subir Gokarn signaled the central bank may intervene in the currency markets to shield exporters from the strengthening rupee. The capital account showed a surplus of $17.5 billion in the quarter to June 30, compared with a record shortfall of $13.7 billion in its current account.

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Foreign investors have so far poured approximately $23 billion in stocks and 10 billion indebt this year. Industrial production expanded by 5.6 percent in August after seeingan expansion of 15.2 percent in July.Going next week the main attraction for retail investors would be the primary market with Mega IPO of Coal India slated to open on 18th October. As Infosys has already rung the bell with positive surprise in terms of earning growth, the investors would now look forward to numbers of companies like L&T, HDFC, Bajaj Auto, etc that are scheduled to announce numbers next week.

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Nifty has support between5870-5950 and Sensex between 19200-19640 levels.With expecting second round of monetary easing, investors dumped dollar and endowed other investment avenues. Commodities extended a rally to the highest intwo years and CRB closed near the mark of 300. The dollar fell to its lowest in 10 months against a basket of currencies and breached the mark of 77. Five week continuous downfall enhanced metals and agricultural commodities.

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Gold gave heroic performance and made another life time high. It rose more than 25% in 2010.Silver is also trading near 30 year high. However, being prudent investors, one should book profit in gold and silver, considering safe trading. Base metals are expected to trade in a range. Crude oil should trade in range $80-85 in short run on mixed fundamental. OPEC has decided to keep the production quota unchanged in last meeting. Agro commodities should trade with high volatility ahead of expiry of October contract.

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Equity News Round Up 11th – 15th October

DOMESTIC NEWS

Economy

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•Food inflation eased marginally to 16.24% for the week ended September 25, from 16.44% in the previous week, as improved supplies lowered prices.

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Capital Goods

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•BHEL has bagged a `3,700-crore from Karnataka Power Corporation Ltd for setting up the 700 MW Bellary Thermal Power Station in Karnataka.

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•Lanco Infratech informed that its Vidarbha power project based in Maharashtra, has achieved financial closure. The company has raised debt to the tune of `5,549 crore to fund the project which has an estimated cost of around `6,936 crore. The rest of requirement is funded by equity of `1,387 crore.

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•Larsen & Toubro (L&T) has bagged `1,585 crore orders in July-September period from the construction segment. Of the `1,585 croreorders, `435 crore order is for construction of building projects fromleading developers while `781 crore orders is from “clients forconstruction of hotel, office building and add on orders from its ongoing airport and commercial building projects”.

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Automobile

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•Hero Honda has launched a limited edition of its 100cc motorcyclePassion Pro, priced at `46,300 (ex-showroom Delhi).

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Realty/ Construction

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•IVRCL Infrastructure and Projects said its various divisions have wonorders worth `1,120 crore from sectors including power and transportation. The company’s water division bagged the highest `451crore order, followed by `440 crore by building divisions,`136 crore by transportation division and `92 crore by power division.

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•Punj Lloyd Group has bagged a `539-crore contract from the state owned gas utility GAIL India for laying a natural gas pipeline from Dabholto Bangalore. The project will be executed over a period of 13 months.

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Pharmaceutical

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•Cadila has got approval from US health regulator to market high blood pressure treatment tablets, Losartan Potassium and Losartan Potassium and HCTZ in the American market. The US Food and Drug Administration approval has been granted to the firm’s subsidiary Zydus Cadila, for Losartan Potassium tablets in the strengths of 25 mg, 50 mg and 100 mg and for Losartan Potassium and Hydrochlorothiazide tablets in the strengths of 50/ 12.5 mg and 100/25 mg.

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Power

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•NTPC may invest over `10,000 crore to set up a 2,640 megawatt (Mw)thermal power project at Gidarbaha in Punjab. The Project shall be setup as regional power project by NTPC and would also be the company’s first in the state.

INTERNATIONAL NEWS

•US Pending Home Sales Index jumped more than four percent for asecond straight month, to 82.3 in August (2001 = 100). The prior month was revised to 78.9, shaving July’s gain to 4.5 percent. The readings point to a second straight jump for existing home sales which surged nearly eight percent in August.

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•US non-farm payroll employment fell by 95,000 jobs in September following a revised decrease of 57,000 jobs in August. Economists had expected employment to come in flat compared to the loss of 54,000 jobs originally reported for the previous month.

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•UK output price index rose 4.4% annually in September, compared with a4.7% gain in August. The increase was a touch higher than the expected 4.3% rise. Output prices gained 0.3% month-on-month after stagnating in August. Excluding food, beverages, tobacco and petroleum, output prices increased 4.6% annually.

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•The Japanese Cabinet approved a 5.05 trillion yen ($62 billion) new stimulus package to boost the economy amid widespread concerns that it could slip back into recession. The new package, which will befinanced by an extra budget, is aimed at addressing labor market issues,social welfare and healthcare services. The government is trying to finalize this additional budget by the end of this month.

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BHEL trades in red despite bagging order worth Rs 3700 crore

Bharat Heavy Electricals(BHEL)is currently trading at Rs. 2,661.50, down by 4.95 points or 0.19% from its previous closing of Rs 2,648.60 on the BSE.

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The scrip opened at Rs 2,668.40 and has touched a high and low of Rs 2,695.00 and Rs 2,655.75 respectively. So far 77,003 shares were traded on the counter.

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The BSE group ‘A’ stock of face value Rs 10 has touched a 52 week high of Rs 2,695.00 on 07-Oct-2010 and a 52 week low of Rs 2,105.00 on 04-Nov-2009.

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Last one week high and low of the scrip stood at Rs 2,695.00 and Rs 2,489.00 respectively. The current market cap of the company is Rs 1,30,334.70 crore.

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The promoters holding in the company stood at 67.72% while Institutions and Non-Institutions held 26.19% and 6.09% respectively.

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State run, Bharat Heavy Electricals (BHEL) has bagged an order from Karnataka Power Corporation (KPCL) valued at Rs 3700 crore. The order bagged is for setting up the 700 MW Supercritical Unit-3 at Bellary Thermal Power Station (TPS) in Karnataka, on turnkey basis. Bellary TPS is already equipped with a BHEL-built 500 MW thermal set (Unit-1) while Unit-2 also of 500 MW, is presently under execution by BHEL.

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With the present order, BHEL has maintained its track record of bagging most of the orders for power generating equipment in Karnataka. The company for bagging this order outbid domestic rival Larsen & Toubro (L&T) under the stiff International Competitive Bidding (ICB).

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In Karnataka, BHEL is also executing the 2×800 MW Yeramarus supercritical TPS of Raichur Power Corporation (RPCL), a joint venture between KPCL and BHEL, which has been set up to build, own and operate supercritical thermal power plants in Karnataka. The company, in total, has commissioned about 5,000 MW of power generating sets in the state, which include thermal as well as hydro units of various ratings.

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Equity News Round UP

Economy

•The annual rate of inflation based on the wholesale price index of food articles shot up to 17.70 per cent during the week ended 27 March 2010 from 16.35 per cent during the previous week.

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•India’s automobile industry reported a 26.41 per cent growth in sales in 2009-10 riding on the government’s stimulus packages that perked demand, making it the second fastest growing market in the world after China.

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•India’s first-ever auction of spectrum for third generation (3G) telephony services began on a cautious note. For a pan-India licence, the highest offer was Rs 3,919 crore on the first day, just 12 per cent higher than the base price of Rs 3,500 crore. There are six companies in the race for a pan- India licence, which spans 22 circles. These are Bharti Airtel, Vodafone Essar, Reliance Communications, Idea Cellular, Tata Teleservices and Aircel.

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Capital Goods

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•Bharat Heavy Electricals Limited is setting up a centre of excellence for nanotechnology with an investment of Rs 8.27 crore to explore applications in power systems and products relevant to the company.

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•Suzlon Energy said its subsidiary REpower Systems AG has bagged a contract from an Italian company for supplying 18 wind turbines. RE power has concluded a contract for the supply of 18 wind turbines to Daunia Savignano, a subsidiary of Italian Tozzi Group.

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•Elecon Engineering Company has bagged an order worth Rs 49.90 crore from Sical Logistics for material handling equipment. The scope of the contract includes design, engineering and commissioning of material handling equipments for New Mangalore Iron Ore Terminal.

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•BGR Energy Systems has entered into an agreement with the Orissa government for setting up a 1,320-MW power project at an investment of Rs 6,287 crore. The company has signed a MoU with Orissa government for setting up a 1,320 MW independent power producer at Bhapur in Nayagarh district of the state at an investment of about Rs 6,287 crore.

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Pharmaceutical

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•Aurobindo Pharma announced that it has received final approval for Venlafaxine Hydrochloride Tablets 25 mg, 37.5 mg, 50 mg, 75 mg and 100 mg from the US Food & Drug Administration (USFDA).

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•Cipla Limited, among the largest pharmaceutical companies in the country, is understood to be closing in on a strategic investment in Bangalore-based Stempeutics Research, a stem cell company developing stem cell-based medicinal products. Stem cells are used to replace or initiate the production of other cells that are damaged or missing.

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•Biocon has fully acquired the joint venture Biocon Biopharmaceuticals from its Cuban partner CIMAB. Under the business restructuring plan, Biocon will pick up CIMAB’s 49% stake and will make Biocon Biopharmaceuticals (BBPL) a wholly owned subsidiary of Biocon.

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Media & Entertainment

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•PVR Ltd, a retail entertainment company, has earmarked around Rs 120 crore for setting up 60 multiplex screens across the country. Of this, 14 are already operational and the remaining will be opened by the end of this fiscal.

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Realty & Construction

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•IVR Prime Urban Developers has raised Rs 63 crore by selling land near Pune and Chennai. The company has sold 87.52 acres of land near Loanavala and 28 acres of land near Chennai.

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Oil & Gas

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•Reliance Industries (RIL) has announced that its subsidiary, Reliance Marcellus LLC has executed definitive agreements to enter into a joint venture with United Sates based Atlas Energy, Inc, of Pittsburgh, Pennsylvania under which Reliance will acquire a 40% interest in Atlas’ Core Marcellus Shale acreage position.

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•Aban Offshore has bagged a contract valued at $159 million (about Rs 716 crore) from Brunel Shell Petroleum Sendirian Berhad for the deployment of the jack-up rigs.

NEWS ROUND UP 29th March – 02nd April

Economy

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·India’s annual food price index stood at 16.22% as on week ended March 13, slower than the 16.30% growth recorded last week. A year ago, food prices were up 7.46%. At the same time, primary articles inflation rose to 13.88% from 4.91% last year, while fuel, power, light & lubricants prices climbed to 12.68%.

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Power

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·NTPC, the state owned power generator, has evinced interest to set up solar and wind projects in Orissa with aggregate generation capacity of 500 Mw.

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The company has sent a draft MoU for approval of the Orissa government in this regard.

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·GMR Energy will soon raise over Rs 1,600 crore from a group of private equity players led by Singapore-based Temasek Holdings and banks to fund its expansion. The company is a subsidiary of the G M Rao-led GMR Infrastructure that has interests in highways, airports, agri-business and urban infrastructure.

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Oil & Gas

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·ONGC has approved investing Rs 3,240 crore ($712 million) for the first phase development of three marginal fields located in Mumbai offshore on the western coast.

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Capital Goods

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·L&T has been awarded a contract by the Ministry of Defense for the design and construction of 36 high speed interceptor boats for the Indian Coast Guard. The contract is valued at Rs 977 crore. The design is being carried out in house by the Company and its ship design center, that is a part of the Company’s Heavy Engineering division. The boats are planned to be constructed at the Company’s existing shipyard at Hazira and at its new shipyard coming up at Katupalli near Ennore.

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·L&T bagged six orders worth Rs 1,181 crore for construction of power transmission line and sub-station works. Three of these six orders worth Rs 741 crore have been secured from the Gulf markets and the other orders worth Rs 440 crore are for domestic projects. These orders will be executed by electrical and gulf projects operating company, a part of L&T’s construction division.

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Automobile

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·Tata Motors, India’s largest vehicle manufacturer by revenue, is selling a third of its stake in the construction equipment-making subsidiary, Telcon, to its joint venture partner, Hitachi, for Rs 1,000 crore.

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·Tata Motors had signed an agreement with the Myanmarese government for setting up a heavy truck plant in the South-East Asian nation, with an installed capacity of up to 5,000 units annually.

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·TVS Motor Company has announced the launch of its new model TVS Jive, India’s first auto-clutch motorcycle, in Chandigarh. With this launch, the company expects that it sales in Punjab will grow significantly from 2,000 motorcycles to 3,600 motorcycles per month.

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Realty/ Construction

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·Patel Engineering has been awarded the contract to develop the largest waterfront project in the southern hemisphere. The project, an integrated township in Port Louis, the capital of Mauritius, is valued at $1 billion.

Spread over more than 24 hectares, the project involves residential, commercial, entertainment and real estate.

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·Punj Lloyd plans to sell its 19.4 per cent stake in Pipavav Shipyard to co-promoter Skil Infrastructure through an inter se promoter transfer. The stake is valued at Rs 825 crore at the company’s current market
capitalisation of Rs 4,251 crore. The Nikhil Gandhi-promoted Skil Infrastructure has an 18.27 per cent stake in Pipavav Shipyard.

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Telecommunication

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·Kuwait-based Zain Telecom’s board cleared Bharti Airtel’s proposal to buy its African assets for $10.7 billion (around Rs 48,600 crore), marking the Indian company’s first successful attempt to acquire operations in Africa after two failures.

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Cement

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·Shree Cement has got the Central Electricity Regulatory Commission’s (CERC) approval to start inter-state trading business in power it produces at its merchant plant. The company has 260 MW installed captive power generation capacity and is in the process of putting up additional 300 MW merchant capacity, which is set to go on stream in a few days.

Indian Stock Market Reaction To Indian Budget :)

Indian stock markets, reacted positively to the budget, with a benchmark index breaking free to close 237 points higher than its previous weekly close. 🙂

The 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) moved up 237.92 points or 1.47 percent to end Friday at 16,429.55 points, 237 points above its previous weekly close at 16,191.63 points.

The broader S&P CNX Nifty of the National Stock Exchange (NSE) too posted gains to end the week at 4,922.3 points, up 77.4 points or 1.57 percent.

Broader market indices, however, ended the week in the red with the BSE midcap index closing 0.54 percent down and the BSE smallcap index 1.67 percent lower.

“Though it is not possible to keep everyone happy, the finance minister has done a commendable job. This was evident from the way markets reacted to the announcements,” said Jagannadham Thunuguntla, the equity head for brokerage firm SMC Capitals.

“The budget did help in breaking from the side-ways movement, but it is not going to help much going forward. A lot of the budget news has been factored in and one should not expect a major rally,” he added.

The top gainers during the week included Hindalco (up 7.7 percent), Maruti Suzuki (up 6.8 percent), L&T (up 6.2 percent), Hero Honda (up 5.5 percent) and ICICI Bank (up 5 percent).

Among top losers were ITC (down 6.5 percent), Reliance Communications (down 2.8 percent), Tata Power (down 2.2 percent), Hindustan Unilever (down 2.2 percent) and Reliance Industries (down 0.6 percent).

Data with markets watchdog Securities and Exchange Board of India (SEBI) showed that foreign funds were net buyers during the week, having bought scrips worth $313.56 million.

Benchmark indices in the US ended slightly lower this week with Dow Jones industrial average dipping 0.8 percent, the Standard and Poor’s 500 Index 500 down 0.4 percent and the Nasdaq composite falling 0.3 percent.

India’s Wealth Lies in Its Cities

It was once believed that India lives in its villages.

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Now it is clear that India’s wealth lies in its cities, or more specifically, Mumbai.

 

India's Wealth Lies in Its Cities

A study conducted by Delhi-based SMC Global classified companies geographically on the location of their registered offices.

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It reveals that Mumbai-registered companies account for 36.28% of the total BSE 500 market cap.

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Some of the prominent names based out of Mumbai are Reliance Industries, L&T, HDFC and SBI.

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Also, out of the market capitalisation ascribed to Maharashtra which has the highest market capitalization among the states — more than 90% originates from Mumbai.

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In fact, Mumbai and six other cities account for 85.71% of the total market capitalisation of BSE 500.

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With Delhi NCR (National Capital Region, which includes satellite cities such as Gurgaon and Noida along with the capital) contributing 27.82%.

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After the financial and political capitals, state capitals take the fore.

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Bangalore lays claim to 7.10%,

Hyderabad to 4.86% and Kolkata accounts for 3.83%,

while Ahmedabad and Chennai account for 3.35% and 2.47%, respectively.

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On a state-wide basis, five states in combination with Delhi NCR and Maharashtra account for 94.20% of the total market cap.

A total of 66.17% of the index’s market cap can be traced to Maharashtra and Delhi NCR.

While the latter accounts for 38.35%, Delhi accounts 27.82%.

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Karnataka accounts for 7.74%, Gujarat, 7.48%, Andhra Pradesh is at 4.95% and Tamil Nadu at 4.02%, while Bengal has 3.83%.

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Though the big Indian companies have a pan-India presence with factories or plants located across the country, they tend to have registered offices in metros.

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That is because of the ease of operations and presence of other corporate houses, suggested the study.

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“The traditional metro cities have accumulation advantage.

Its ultimately the money which brings in more money.

As the Indian economy keeps evolving, tier-2 and tier-3 cities may catchup gradually, to bring-in more equitable distribution of wealth across the country.”

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…said Jagannadham Thunuguntla, equity head at SMC Capitals.

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