The Indian market opened marginally positive, mirroring SGX Nifty which is trading marginally higher in the opening trades. Major Asian indices are also trading in the positive zone. The US markets ended on a positive note on Tuesday following Monday's President's Day holiday. The market moved notably higher following the rally in Europe and optimism about further merger-and-acquisition activity which helped generate continued buying interest. European stock markets posted broad-based gains on Tuesday, boosted by stronger-than-expected German ZEW economic sentiment data. The ZEW economic expectation index jumped 16.7 points to 48.2 in February, exceeding analysts’ expectations of 35.0 points. Back home in India, Indian shares rose notably on Tuesday, with gains accelerating in the afternoon helped by firm European cues. Going ahead, investors are likely to keep an eye on reports on housing starts and producer price inflation as well as the release of the minutes of the Federal Reserve's latest monetary policy meeting.
MSIL expects a volume growth of 5.5-6% in FY2013
Ruling out price hike in the near term, country's largest car maker Maruti Suzuki today said it is expecting sales growth of about 6 per cent in the current financial year ending next moth. "We think that this (fiscal) year Maruti will grow by about 5.5 to 6 per cent," Maruti Suzuki Ltd Chairman R C Bhargava said on the sidelines of India-UK CEO Forum here. On whether there will be price hike in the coming months, he said: "I don't see price hike taking place." The cost of owning a car is going up largely because of fuel prices, he said. Last month, Maruti Suzuki India increased the prices of its vehicles across models by up to Rs 20,000 to offset the pressures of adverse currency fluctuation. The company sells a variety of models, starting from M800 to imported Kizashi at a price range starting from Rs 209,000 and going up to Rs 17.52 lakh, (ex-showroom, Delhi). Asked about growth prospects for the next fiscal, Bhargava said: "This year continues to be difficult for the sector. Next year, probably, the growth will be flat." Since October, car loans rates of private banks have actually fallen by 2 per cent and lowering of interest rates by 2 per cent has not led to higher sales, he added. Growth rate will not improve very much unless the Budget does something for better investment sentiment, he said. On Budget expectations, Bhargava said: "We are not in favour of sops but complete measures like GST(Goods and Services Tax) that will create a lot of good sentiments... We don't really get growth from sops because it will temporarily boost sales. But it cannot give long term industrial growth." He also said the growth will also depend on the election result of 2014. "...because if you have a coalition government and driven by the same kind of coalition 'dharma' which the PM has mentioned then you will have difficult time again," he said. On the labour trouble issues facing the sector, Bhargava said, "If the economy and demand continues to be stagnant and industry finds it difficult to meet, it could give rise to more labour troubles. But if the economy picks up again, people will start getting jobs." When asked about the outlook for next 6-8 months in the light of brewing tension at Hero plant, he said: "I think once wage settlement is done in Hero...and once that will be done, there will be peace for sometime. We have had the wage settlement, Honda have had wage settlement." Source: Economic Times
GSK Pharmaceuticals - RU3QFY2013
For 4QCY2012, Glaxo Pharmaceuticals’ results were ahead of our expectations on the net profit front, while the sales were just in line with expectations. Overall, net sales came in at `657cr, tad below the expectation of `680cr, and registering a yoy growth of 16.1%. The top-line growth was driven by a 15.9% yoy growth in the pharmaceuticals segment. On the operating front, gross margin came in at 57.3%, ie a contraction of 170bp, which along with a 32.2% yoy growth in the other income led the OPM to contract by 300bps to 27.2%. The OPM however, was higher than our expectation of 26.8%. Apart from this the higher than expected other income aided the adjusted net profit to come higher than expectation at `158.5cr, registering a yoy growth of 15.9% yoy. Source: Angel Broking
Binani Industries in talks to sell up to 40% in cement arm to raise capital
Binani IndustriesBSE 10.79 % is in talks with potential financial investors such as JP Morgan and state-owned funds in the Middle East to sell up to 40% stake in its subsidiary Binani CementBSE 0.06 %as it seeks to raise capital to cut debt and expand cement capacities. Ernst & Young (E&Y), Braj Binani group's banker for the transaction, has held preliminary talks with the prospective investors, said two persons familiar with the transaction. E&Y will soon approach the investors with a document detailing the acquisition opportunity, one person said. "Binani Industries has taken an in-principal approval from the board to divest its holding up to 40% to financial investors on a structured basis to facilitate its liquidity position and to consolidate its growth plans. E&Y, among others, is assisting us by talking to prospective financial investors. The divestment is on a structured and phased manner and we hope to complete it within the next few weeks," said Sunil Sethy, executive vice-chairman and managing director, in an e-mail response. The potential investors may include Abu Dhabi Investment Authority and Qatar Investment Authority. The company, with a capacity of 11.25 mtpa, has a 2 mtpa grinding unit in Dubai's Jebel Ali Industrial Area. "We want to scale up our capacities in China and Dubai," a top official of the company had told a news channel recently. Binani Cements also plans to expand domestic capacity by 3 mtpa. The firm's plants are located in Rajasthan. Dalmia Cement recently acquired Adhunik Cement for an enterprise valuation of $130 per tonne. "This can be the fair valuation for Binani because it has only 6.25 mtpa capacities located in India," said an analyst with a multinational institutional brokerage firm, who did not want to be quoted. At $130 per tonne, Binani will be valued at Rs 8,000 crore and a 40% stake at about Rs 3,200 crore. "The valuation of Binani Cement will be evolved in discussions with the financial investors and will be in compliance with the regulatory guidelines," said Sethy. "Given the overcapacity, the absence of M&A has been surprising. In our view, difference in asking price between the seller and the buyer has been the key reason, JPMorgan said in a recent research report. "The other issue, in our view, has been the absence of foreign companies as buyers. Over the past few years, most of the buyers of cement assets have been foreign cement companies like Holcim, CRH and Heidelberg BSE 0.34 %, among others. Over the past 2-3 years, the foreign companies have been facing stressed balance sheets," Pinakin Parekh and Neha Manpuria wrote in the report published on January 9, 2013. Binani Cement, part of the Braj Binani group, was delisted last year through share buy-back programme. Investors such as JPMorgan and Credit Suisse exited the company. The company reported a turnover of Rs2,019 crore during the year ended March 31, 2012. Source: Economic Times
Reliance Industries, BP to invest $5 billion to boost natural gas field output
Reliance Industries, BP to invest $5 billion to boost natural gas field output
BP CEO Bob Dudley and Reliance Industries Chairman Mukesh Ambani have promised to accelerate investment of $5 billion in the next few years to boost natural gas output gradually from 2014 while the government has assured quick resolution of pending issues, including approvals for the D6 block, government and company officials said. The investment includes testing of a new layer of natural gas under the rapidly depleting fields in the KG-D6 fields, a joint statement from Reliance and BP said. It said "optimisation" plan from the existing field will reverse the fall in D6 output from next year, while other developments in the same block will deliver results by 2017. Dudley, who is a member of the business delegation accompanying British Prime Minister David Cameron, and Ambani gave the assurances in separate meetings with Prime Minister Manmohan Singh and Oil Minister Veerappa Moily, officials said. Mukesh Ambani said the partnership of BP and RIL would help the country attain energy security. "The BP and RIL partnership is focused on finding more hydrocarbons and addressing the complexities of the geology along the east coast of India," he said. Dudley said: "We will bring all our expertise in deep water to explore the prolific gas basins in India and BP looks forward to a rewarding and successful exploration programme in the coming years." Government officials said Dudley was upbeat about investment in India. "In his interactions with PM and Petroleum Minister, BP chief was bullish on company's India plans. The government too has assured him to resolve all pending decisions expeditiously," a senior official with direct knowledge of the matter said. BP and RIL chiefs met Moily over breakfast on Tuesday along with RIL Director PMS Prasad, BP India head Sashi Mukundam and Petroleum Secretary Vivek Rae. BP and RIL apprised Moily about prospects of D6 and other blocks and sought the government's support in enhancing oil and gas output. BP is 30% partner of RIL in several oil and gas blocks including KG-D6, which is under CAG scrutiny. Last month, RIL accused CAG of exceeding its brief and seeking "propriety" audit of the private company, which is not envisaged in production sharing contract (PSC). After the dispute was brought to the notice of bureaucrats at the oil ministry, DGH had refused to issue approval letters for the block's work plans and budget since 2010-11. The oil ministry has now decided to clear KGD6 block's past and current budget and direct the contractor to carry on further exploration of the block, while making every effort to resolve the fresh dispute between CAG and RIL over audit matters, officials said. "It is criminal wastage of time for a country, which imports more than 80%. Pending issues must be resolved but they should not be allowed to jeopardise future developments," one official said. The oil ministry has again requested the CAG to conduct audit of private companies as per PSCs, which provides for only financial audit, officials said. "CAG can always conduct performance audit of the ministry where it can scrutinise accounts of private companies including RIL. Private companies have no objection to that," an official said. Source: Economic Times
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