The Indian market is expected to open flat mirroring similar opening in SGX Nifty and most other Asian market. The US markets saw modest strength during trading on Wednesday with traders reacting positively to the latest batch of earnings news. The gains on the day extended a recent upward move by the markets, although buying interest was somewhat subdued. The markets also benefited from positive sentiment generated by news that the House voted to approve a bill that would temporarily suspend the U.S. debt limit for nearly four months. The major European markets also ended the day mixed, while many investors were hesitant to take a position ahead of the vote to pass a short-term debt ceiling increase in the U.S. House of Representatives. The Indian markets erased early losses to end modestly higher on Wednesday, mirroring firm European cues. Going ahead investors would be watchful of the earnings data and reports on weekly jobless claims, leading economic indicators, and new and existing home sales in the US.
Tata Motors has tanked over 9% to Rs 282 on the NSE in opening deals after the company said that the earnings before interest taxes, depriciation and amortisarion (EBITDA), also known as the operating margin, for the December quarter (Q3) is likely to be slightly lower than in the previous two quarters. The company said that sales for JLR, which accounts for a majority of Tata Motors' profits, have slowed significantly over the past quarter. “EBITDA profit is likely to be in the region of levels reported for the previous two quarters and EBITDA margin is likely to be slightly lower than in the previous two quarters, primarily reflecting less favorable exchange rates, the ongoing effect of a higher mix of Evoque sales and other factors,” Tata Motors said in a statement. “Free cash flow (cash from operations after capital spending) will be negative in the quarter ended 31 December (reflecting working capital calendarisation effects); free cash flow will be positive in the first nine months of the Fiscal year to date,” it added. Meanwhile, UBS cut Tata Motors fiscal 2013 and 2014 earnings-per-share (EPS) estimates by 6% after the automaker warned its luxury unit Jaguar Land Rover is likely to report a lower EBITDA margin in the October-December quarter, the Reuters report suggests. The stock opened at Rs 287 and has seen a combined 5.34 million shares changing hands on the counter in opening deals.Source: Business Standard
Battery maker Exide industries, the largest stakeholder in ING Vysya Life Insurance, is set to take full control of the company. The Rajan Raheja-led company, which currently owns a 50% stake, has decided to acquire the remaining stake for `550 crore. It will buy 26% stake from Dutch partner ING Insurance international, which is exiting the insurance business in India with this deal. It will also acquire 16.32% stake from Hemendra Kothari group and 7.68% from Enam group. The deal will value ING Vysya at Rs1,100 crore.
Incidentally, Exide’s current 50% equity stake in the insurance arm is valued at Rs744.43 crore.
As per a BSE announcement, Exide will be scouting for foreign partners to dilute stake up to 26% if required.
“Post such acquisition, Exide has in principle decided to identify and induct a new international player in the life insurance genre to infuse fresh equity into ING Vysya Life (subject to regulatory approvals) for company’s expansion plans,” said the release.
A spokesperson for Exide Industries declined to give further details, while ING Vysya spokespersons were not available for comment.
According to sources, Japanese and Korean insurance giants such as Samsung Life and Hitatchi will be eyeing Indian partnerships. Recently, Samsung Life was in talks with DHFL for a joint venture partnership.
“Since the deliberations on that did not yield any result, Samsung Life can be the most likely partner,” said an industry official.
ING Vysya had managed to get only under 2% market share after it started operations in 2001. Initially, the JV partnership was between ING Vysya Bank and GMR Industries. In 2005, GMR Industries had sold its stake to Exide.
For the industry a whole, life insurance business has been posting de-growth in terms of new business premium for the last few quarters. During April-November last year, ING Vysya posted a growth of 13%, mopping up `387 crore new business premium as against `342 crore in the corresponding period last year.
The company sells policies in 229 cities with 35,000 agents.
The life insurance industry has seen several strategic deals in stake dilution over the last few years. In 2011, Nippon entered into a JV partnership with Reliance Life by picking up a 26% stake, valuing the insurance firm at `11,500 crore. Then, following the exit of New York Life from JV partnership with Max, Sumitomo bought 26% stake in Max Insurance, valuing the company at `10,500 crore.
According to sources, Belgian insurance company Ageas plans an exit from the JV partnership with IDBI Federal Life Insurance.
Source: DNA
Reliance Comm Q3 profit rises marginally to Rs 105 cr
Anil Dhirubhai Ambani Group company Reliance Communications ' consolidated net profit rose marginally to Rs 105 crore in the third quarter of financial year 2012-13 from Rs 102 crore in previous quarter.Consolidated income from operations grew just by 2 percent quarter-on-quarter to Rs 5,136 crore in October-December quarter. Earnings before interest, tax, depreciation and amortisation (EBITDA) too increased marginally to Rs 1,653 crore from Rs 1,638 crore during the same period. Revenue per minute increased to 44 paise in December quarter as against 43 paise in previous quarter and expectations of 43.5 paise. Other income of the telecom operator slipped to Rs 165 crore from Rs 171 crore QoQ.
Source: MoneyControl
L&T Q3: Analysts expect profit to grow 14% to Rs 1,130 cr
Engineering conglomerate Larsen and Toubro (L&T) is set to announce its third quarter results for financial year 2012-13 on Thursday. Analysts on an average are expecting a moderately healthy set of results for October-December quarter. Analysts expect profit after tax of the company to grow by 14 percent year-on-year to Rs 1,130 crore. The company will benefit from a low base in third quarter as in a year ago period; it had reported exchange losses of Rs 400 crore.Revenues are seen going up by 15.2 percent to Rs 16,120 crore from Rs 13,999 crore during the same period. Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 25.8 percent YoY to Rs 1,689 crore in December quarter. EBITDA margin is seen improving 90 basis points YoY to 10.5 percent. Order inflows / order book L&T’s order book was at Rs 1.59 lakh crore at the end of second quarter of FY13. Analysts expect order inflows to be a tad bit disappointing in the quarter due to macro headwinds. The company expected at Rs 16,300 crore worth of orders in Q3, down 5 percent YoY, although reported inflows on the exchanges stood at Rs 10,000 crore for the quarter. L&T typically announced 60 percent of its order inflows during the quarter. Analysts feel the company should witness an increase in slow moving orders this quarter. But typically fourth quarter is the strongest quarter for the company in terms of order inflows, say analysts. According to analysts, the company needs a run rate of over Rs 45,000 crore to achieve its full year guidance on order inflows. The management has been expecting 15-20 percent growth in topline and targeting order inflows of Rs 84,000 crore - Rs 85,000 crore for FY13. On the back of lacklustre order inflows and tepid results (expected), brokerages are even estimating downward revision in earnings estimates post results. Investors should watch out for order inflows, margins and working capital trends.The stock has been seen a slew of downgrades recently from many brokerages, although brokerages continue to like L&T over BHEL. According to them, main concerns are order cancellations of approximately Rs 1,500 crore in Q2FY13 plus slow-moving orders which now form around 10 percent of backlog. rokerages say order inflow mix is also becoming a concern. Company’s new focus area of Middle East and real estate / construction orders fetch poor margins, brokerages add. Rising working capital is another cause of concern for the company, say analysts. Brokerages feel now the company will at best be a sector outperformer but will lose the ability to outperform the markets in CY13. L&T had reported strong numbers in July-September quarter of FY13. Numbers beat street estimates on margins and order inflows. Revenues grew by 17 percent YoY to Rs 13,196 crore and operating profit margin rose by 25 basis points to 10.7 percent. EBITDA jumped 20 percent YoY to Rs 1,406 crore and profit after tax increased 42 percent to Rs 1,137 crore from Rs 798 crore during the same period. Adjusted profit after tax went up 13.7% YoY to Rs 907 crore. PAT was adjusted for two exceptional items amounting to approximately Rs 267 crore.
Source: Moneycontrol
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