Posts Tagged ‘market share’

Low Cost Airlines on Capex Spree as Air-Traffic Surges

After facing tough couple of years, India’s aviation sector is booming and low-cost operators seem to be getting a greater chunk of the business. While the trend globally has been turning in favour of low cost air-travel as high prices of crude makes mainstream carriers less competitive, in India, the change seems to happening at a rather swift pace.

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Most of the low-cost airlines have been enjoying 5-15% higher load factors compared with their mainstream counterparts, and this is also leading to ambitious capex plans by these companies. Most of the no-frill players are adding aircrafts to their existing fleet and have applications before the government for approvals for future acquisitions.

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In the latest such clearances given by the government,  the aviation ministry led empowerment committee has given the green signal for importing 46 new aircraft worth over Rs 19,000 crore by three low-cost carriers –  SpiceJet, IndiGo and Jet Lite. While the planes will arrive in a gradual way, some of these at least will be added to the fleet within the current calendar year.

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IndiGo, the largest low-cost carrier in the country has got an approval for 14 A-320s. The Gurgaon-based carrier currently has a fleet of 27 aircrafts and a market share of 16.9% in domestic market. It plans to increase its fleet to 35 within the current calendar year. It had earlier ordered a whopping 100 planes whose delivery is scheduled to begin from 2015-16, and the current orders are in addition to them.

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SpiceJet, another low-cost carrier, has received clearance for 30 Boeing 737-800s at a cost of about $2.7 billion (Rs 12,660 crore). Delivery for these planes will start from 2014. It will however add 8-10 planes, which had been ordered earlier, to its current fleet of 21 aircrafts within the current fiscal. The airline plans to operate 50 aircraft by 2014.

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Another no-frills carrier GoAir has also announced that it was in talks with Airbus to advance the delivery of 10 planes within a year. The Wadia Group-promoted airline currently has an all-Airbus fleet comprising of eight aircraft. While it already has plans to add two new Airbus A320s in the next two months, it wants to get advanced delivery of 10 out of a total order of 20 Airbus aircrafts in next one year.

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Ambitious capex plans as reflected in large number of aircrafts to be acquired by the low-cost airlines reflects their growing market share. Together, these carriers have already cornered nearly half of the market share if we add up the shares of low cost subsidiaries of mainstream carriers as well. Even the stand alone no-frill players have a one-third share of the market. With the air-traffic in the country growing at over 20% annually, the prospects to these carriers are certainly very bright.

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Points to Remember while Selling Stocks – Part 1

Hello Friends here we come up with our another write up on “SMC Gyan Series”. 🙂


Points to remember while selling stock

Points to remember while selling stock

 

Buying a stock is simple, but Selling is actually harder as it requires regulation, understandable thoughts, and a tight rein on one’s emotions.

The ongoing optimism, slow economic revival, positive signs on the global front and high expectations from the stable government at home have forced bulls to give up their lethargic activities and to march northward.

Many investors who had seen the value of their stocks hit rock bottom and are now facing dilemma whether to sell or should they hold on? :O

Investors often face problems to take right decisions in volatile market as markets could head either way.

Wouldn’t it be disheartening if the markets rallied northwards, the day after you sold your stocks?

What if the markets come crashing down tomorrow, depriving you of the opportunity to enhance profits?

So, the decision to sell is critical.

🙂

Some of the points when to sell your stocks:

Prima facie, if there is any drastic change in fundamental of a company, this should be the only reason to sell stock.

But a depth research has to be done before taking any decision.

Changes includes;

-restructuring of its business model,

-different business focus and directions.

🙂

FIRST THREE POINTS :

1. Margins Crashed

Margins are the profit that a company makes on its sales.

Rising gross margins tell us that a company is reducing production costs or raising prices.

Conversely, deteriorating margins say either that production costs are increasing and the company can’t raise prices proportionally or that the company is cutting prices in an attempt to maintain marketshare.

If there are expenses related to a new product’s introduction then margins might fall for inoffensive reasons.

Falling margins, either gross or operating, often signal a declining competitive position. Thus it’s important to check both.

🙂

2.Is There Any Drastic Change In Company’s Management?

If people in top management of the company say director or president who are liable for a company’s success begin to go away, there might be a few negative implications for the future outlook of that company as an investor.

You must look into and find out the root cause and also to see how much it could impact you.

If negative prospects, investor should sell the stock and should relocate the funds into a similar company that has stronger and more constant management.

🙂

3. What First Fascinated You To The Stock, No Longer Applies

For example, let’s suppose that you bought a stock of a health care company because of its innovative products in the pharmaceutical field and all of a sudden, it loses a crucial patent for a life-saving medicine.

This may result in a decrease of market share in its industry, which might lead to a reduction in future profits (resulting in a decline in the value of its stock).

🙂

Stay Tuned for more on this where we would touch upon other major points needed to keep in mind by investors before making any Buy and sell decision.

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POTATOES………GOOD SOURCE OF VITAMIN M (MONEY) Part Two

Hello Friends, just an extension of our previous blog on Commodity Check where we touched upon the aspects like production and price movement of Potato.

Potato Position in Indian Snacks Market

Potato Position in Indian Snacks Market

Now we would read into the consumption pattern and position of Potato in Indian Snacks Market and many more related aspects in this regard.

Indian Snacks Market

Potato consumption is expanding strongly in developing countries, where potato is an increasingly important source of food, employment and income.

The Indian snacks market is worth around US$ 3 billion, with the organized segment taking half the market share, and has an annual growth rate of 15-20 per cent.

The unorganized snacks market is worth US$ 1.56 billion, with a growth rate of 7-8 per cent per year.

There exists consumer as well as bulk markets for potato wafers and chips even in far flung rural areas owing primarily to the following reasons:-

·Rapid urbanization and improving standards of living

·Easy availability

·Convenient packaging

·Affordable prices

·Nutritious values

Income growth in India has led to an increase in consumption of Western-type goods, such as French fries, which continue to be this country’s most important potato export product.

Consumers are willing to pay a premium for both value-added private and branded products, creating immense opportunities for manufacturers and retailers.

Though there exists some international as well as national brands but majority of the market base is under the control of local manufacturers.

PepsiCo India has partnered with more than 10,000 farmers working in over 10,000 acres across Punjab, U.P., Karnataka, Jharkand, West Bengal, Kashmir and Maharashtra for the supply of potatoes.

Potato sourced under contract farming accounts for roughly 55% to 58% of the US giant’s annual snack making requirement.

The company is trying to procure potato through contract farming from Bihar and Jharkhand and process upto 30,000 ton of potato at its Sankrail factory in West Bengal by 2010.

Strengthening Stimulus

Stimulus spending and festivals strengthening demand may add to on-going demand, the prices can be driven by supply-side bottlenecks.

India’s industrial output grew at its fastest pace in 22 months in August, 2009.

Inflation is rising; production is rising fast, so logically the data does suggest that it makes sense to move.

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Telecom Stocks Continues To Plunge Down :(

Shares of telecom companies continued to decline amid the ongoing tariff war

Shares of telecom companies continued to decline amid the ongoing tariff war

Shares of telecom companies continued to decline amid the ongoing tariff war and the losses of market leaders like Bharti Airtel and Reliance Communications so far this month almost at par.

😦

Since the tariff war started, Bharti Airtel, which enjoys the largest market share, has declined over 23 per cent, while Anil Ambani led Reliance Communications has tanked nearly 31 per cent on the Bombay Stock Exchange.

Telecom stocks are continuously coming down.

The per second plan would act negatively for these companies and accordingly most of the brokerage houses have downgraded the sector.

Regarding RCom, experts said “the slide in the stock was more to do with the tariff war than the audit report and the fact that the company changed from CDMA to GSM also strained its balance sheet.”

Since October 5, shares of Idea Cellular has plunged 13.32 per cent, while the scrip of  Tata Teleservices Maharashtra was down 3.37 per cent.

😦

“In the midst of the tariff war, the face of telecom industry is changing, the telecom story is being re-looked by the investor community.

The winner in this case is customers and the losers are the companies.”

SMC Capitals head of equity Jagannadham Thunuguntla said.

🙂

Earlier this month, telecom regulator mooted the plan to ask all the operators to consider per-second pulse as a mandatory tariff option along with their other tariff plans.

Paying tariff based on usage per second instead of the current per minute pulse, would heavily impact the profitability of the telecom operators and on these concerns shares of all major telecom companies slipped into the red.

😦

As subscriber base numbers are also significantly down both in terms of pan India level and individual company wise, it would also affect the share price of the telecom operators significantly.

😦

Reliance Comm. Leads the Decline among India Phone Stocks !

Reliance Communications Ltd. turned as a leading declines among India’s telecommunications stocks

Reliance Communications Ltd. turned as a leading declines among India’s telecommunications stocks

Reliance Communications Ltd. fell the most in nine months in Mumbai trading, leading declines among India’s telecommunications stocks, on speculation a price war may hurt earnings after the company cut its call charges.

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Reliance tumbled 11 percent to close at 268.30 rupees, the biggest decline since Jan. 7.

Larger rival Bharti Airtel Ltd. declined 10 percent to 359.35 rupees.

The two stocks were the worst performers today on the benchmark Sensitive Index, which climbed 0.6 percent.

😦

Sales have been slowing at Reliance and Bharti as competition from Vodafone Group Plc’s Indian unit and new entrants such as NTT DoCoMo Inc. intensifies in the world’s largest wireless market by users after China.

Revenue growth is also easing as wireless subscriptions in urban areas approach saturation level, forcing the companies to target low-spending rural customers for the bulk of their new additions.

😦

A “price war can impact the revenues of telecom companies by 15 to 20 percent,” said Jagannadham Thunuguntla, head of equities at SMC Capitals Ltd. in New Delhi.

Reliance has said that it will charge a uniform 0.50 rupee (1 U.S. cent) per minute for local and long-distance calls, to simplify tariffs.

The new rates will help the company gain market share for its services based on the global system for mobile communications platform.

“The cut in tariffs by Reliance will distort the revenue structure for companies in the sector,” market experts said.

“It could prompt other companies to follow with cuts” they added.

🙂

Banks Appease Home Loans with Festival Offers :)

Banks appease home loans with festival offers

Banks appease home loans with festival offers

Banks are coming out with festival schemes on home loans ahead of Diwali.

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The move is aimed to increase credit demand.

Meanwhile, deals include teaser rates for initial years, amid some lenders providing alternative to shift to either fixed or floating rates in following years.

Lenders like Canara Bank, Bank of Maharashtra (BoM) and Dena Bank are offering fixed-rate loans for the first five years, and afterward, linking the loans to their prime lending rates.

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However, others like Bank of India are offering fixed-rate loans for the first two years.

Besides, SBI is offering fixed rates for the first three years.

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Moreover, the competition to gain market share has resulted in a small price war.

Development Bank of Credit introduced a fixed rate of 7.95 per cent for the first year, which is the lowest for the first year, in any case. From the second year onwards, the home rates will be linked to floating rate loans.

🙂

BoM and Dena Bank offer a fixed rate of 8 per cent for loans up to Rs 30 lakh in the first two years.

Canara Bank offers 8 per cent in the first year for Rs 30 lakh and SBI offers 8 per cent for the first five years for loans up to Rs 5 lakh.

🙂

Summer sales during the existing year were flat due to uncertainties.

Now, builders and lenders are making a fresh pitch to push sales during Diwali through limited period offers.

Most banks have also waived off the processing fee during the festival season.

🙂

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