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Fundamentals March 22, 2013


Nik's Diary
Indian markets opened in the red tracking negative opening trades in SGX Nifty and most of the Asian markets. The US markets moved mostly lower on Thursday, offsetting the gains posted in the previous session. The correction came as worries about the situation in Cyprus overshadowed a batch of largely upbeat US economic data. The major averages ended the day in negative territory but off their lowest levels of the session. Meanwhile the European markets also finished in negative territory on Thursday. Uncertainty surrounding Cyprus continued to weigh on investor sentiment after the country's lawmakers blocked a bank tax and the ECB gave the country an ultimatum. Weaker-than-expected European economic data also contributed to the negative mood Indian shares ended a volatile session lower on Thursday amid worries that the ongoing political uncertainty may derail reforms. Investors fear that the government may resort to populist measures with an eye on elections scheduled in early 2014. Global cues were subdued, further dampening investor sentiments.

ONGC strikes three new discoveries
Oil and Natural Gas Corp (ONGC), India’s biggest energy explorer,on Thursday announced discovery of three new assets – two in Krishna-Godavari basin and the third in Agartala in Tripura. A company official called thesediscoveries “substantial”, but refused to divulge any information regarding their tentative reserve base. “We will disclose some numbers after April 18,” he said. Analysts said while these discoveries may not be as substantial when compared with ONGC’s base of oil and gas production, on a standalone basis these were good ones. They, however, refused to hazard a guess on the estimated reserve base. ONGC produced 26.92 million tonne of oil and 25.51 billion cubic metres of gas in fiscal 2012, which is expected to rise marginally in the current fiscal. The company plans to invest Rs4,050 crore toupgrade its Arabian Sea infrastructure to extend the assets’ life and boost production. “With the implementation of various redevelopment projects in western offshore, the fields are expected to be on production beyond 2030,” it said. ONGC’s western offshore operations comprise the flagship Mumbai High assets, Neelam and Heera, and the Bassein & satellite fields. These assets are located in the Arabian Sea, towards the western part around Maharashtra and Gujarat. Currently, the company is producing a little above 30 million tonne per annum of oil from the western offshore and has been pumping in money to maintain the production plateau at that level. The company will invest around Rs2,913 crore on revamping 48 platforms across Mumbai High, and Neelam and Heera. The company will also spend another Rs1,140 crore on reconstruction of two process complexes in the prolific Bassein and satellite fields. These fields were commissioned in 1987 and 1989, respectively. These complexes handle and process acidic and corrosive gas for onward dispatch to ONGC’s Hazira gas processing plant, and have already reached their normal design life of 25 years. Work on these complexes would be completed by 2014-15, the company said. The total revamp is expected to be completed by pre-monsoon 2016. “We are well funded internally for this kind of capex at least for the next two years, beyond that we will see. If our internal accruals are good, we will continue to use our cash to fund all the expansion,” said a senior company official. Source: DNA

L&T bags order worth `2,080cr
Larsen & Toubro Ltd. said L&T Construction has bagged orders aggregating to Rs.2,080 crore across various business segments in February and March 2013. The Building & Factories Business has won new orders for Rs.1,385 crore for the construction of residential towers in cities in North India. The Power Transmission & Distribution Business has won new orders aggregating to Rs.585 crore from various customers. It secured a major order from Bangalore Metrorail Corporation Ltd. (BMRC) for electrical and mechanical work for seven underground stations and associated tunnel sections of North-South and East-West corridors of BMRC Phase-I. For the Power Grid Corporation of India Ltd., L&T will construct a 400kV double circuit (Quad) transmission lien between Kurukshetra-Jallandhar and a 400kV double circuit (Triple) transmission line for Abdullapur-Sonepat at Kurukshetra associated with a WR-NR HVDC interconnector. L&T Construction also secured a new order from Transmission Corporation of Andhra Pradesh Ltd. for 220kV underground cable laying between Malkaram and Ghanapur substation to Moulali substation in Andhra Pradesh. The company also bagged additional order worth Rs.110 crore from various ongoing jobs in the Water and Solar and Infrastructure Business. At the BSE, Larsen & Toubro shares are currently trading at Rs.1,446.40, up 0.62 percent from the previous close. Source: rttnews

Sadbhav Engineering bags `1,210cr road BOT project from NHAI
Sadbhav Engineering Ltd. said it had been declared as the successful bidder in respect of the bid invited by National Highways Authority of India (NHAI), New Delhi, for 4 laning of Rohtak to Hissar Section of NH-10 from Km 87.000 to km 170.000 including connecting link from km 87.000 (NH-10) to km 348.000 (NH-71) to be executed as BOT (Toll) project on DBFOT pattern under NHDP Phase III in the state of Haryana. The estimated total cost for the development of the said project was Rs.1210.00 crore. The Concession Period of the project is 22 years from the "Appointed Date". The company has quoted Rs.211.50 crore towards Grants for the said project. At the BSE, Sadbhav Engineering shares are currently trading at Rs.113.95, down 1.06 percent from the previous close. Source: rttnews

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