NDPMS Wealth Management

Crompton Greaves Crompton Greaves (CG) reported a disappointing performance for 3QFY2013, which was below our estimates and street expectations. The company posted a loss of  `69cr mainly on account of  `108cr restructuring loss at its Belgium unit (since most of the transformers had to be reworked at Hungary unit due to product defects). The company also incurred an additional loss of `121cr towards VRS package of 199 redundant workers. Although the company is expected to register a healthy 11-12% yoy sales growth, supported by healthy order backlog, its operating margins are expected to remain under pressure for the next few quarters. On a positive note, the Management has indicated that all exceptional losses due to Belgium unit’s restructuring have been accounted for and the company is expected to save up to 14mn euros/year on account of the same. We are of the opinion that CG’s margins will bottom out in FY2013 and we ex...

India Research In terms of percentage, Nifty (64.37%) rollover may just appear to be in line with recent averages, but in terms of number of unit wise, this is lowest open interest since early 2005!! Even if we just compare with last month then Nifty has reduced substantial open interest. This highlights that despite market making new highs in last week; the leverage in main instrument of market has been reducing, indicating that this market is not in any overbought zone. On the other hand, BANKNIFTY (66.94%) has added some positions compared to last month, which we believe are more of long positions. The process of change in hands in equity continues as stronger hands (FII’s) are in accumulate phase while DII’s are seeing redemption pressure; so don’t expect crash like situation in market. Liquidity tap  may continue as most of the indicators like bond yields, crude oil, etc are pointing towards further inflow coming. For first half of Feb series we have bullish stanc...

Nik's Diary The Indian market opened flat today, mirroring flat opening in the SGX Nifty and marginally positive opening trades in most of the Asian bourses. Investors would keenly watch out for the outcome of the RBI’s monetary policy meet scheduled today. The US stocks, after trending higher over the past few weeks, showed a lack of direction throughout the trading on Monday. The lackluster performance came as traders seemed reluctant to make any  significant moves following the recent strength. The European markets ended the trading session on Monday with mixed results. Investors were pleased with some positive economic data from China, as well as the surge in US durable goods orders. However, the larger than expected decrease in US pending home sales provided a note of caution. Meanwhile, the Indian markets ended a lackluster session largely unchanged as investors adopted a cautious stance ahead of the monetary policy meet of the RBI scheduled today and the January series ...

RBI reduces repo by 25bp, CRR by 25 bp Policy Measures  „The Reserve Bank of India (RBI) in its Third Quarter Monetary Policy Review for FY2013 reduced the repo rate by 25bp from 8.0% to 7.75%.„ Consequently, the reverse repo rate stands adjusted at 6.75% and the marginal standing facility (MSF) rate and bank rate stand adjusted at 8.75%.„ The Cash Reserve Ratio (CRR) too has been reduced by 25bp from 4.25% to 4.0% of banks’ net demand and time liabilities (NDTL) since liquidity remains tight and due to persistence of the wedge between credit and deposit growth.  „The CRR reduction is expected to inject around `18,000cr of primary liquidity in the banking system.   Policy stance more supportive of growth…   The RBI has further scaled down its growth forecast for FY2013 to 5.5% from 5.8% in its October policy review. Growth is likely to remain subdued for the fiscal year on the back of slowdown in private consumption,  investment and exports. In light ...

Nik's Diary The Indian market opened flat today, mirroring flat opening to SGX Nifty and weak opening to most of the Asian markets. The US stocks ended modestly lower on Wednesday following the announcement by the Federal Reserve on the monetary policy. The Fed announced that it widely expects to keep interest rates unchanged and maintain its asset purchase program as part an effort to stimulate the economy. The comments from the Fed were backed up by a Commerce Department report showing that GDP unexpectedly fell by 0.1% in 4QCY2012 after surging up by 3.1% in 3QCY2012. Nonetheless, upbeat jobs data helped offset the negative sentiment generated by the GDP report, with payroll processor ADP reporting a bigger than expected increase in private sector employment in the month of January. ADP said private sector employment increased by 192,000 jobs in January compared to economist estimates for an increase of about 172,000 jobs. Meanwhile, Indian shares rose marginally led by ind...

Nik's Diary The Indian market opened flat to positive, mirroring flat opening in the SGX Nifty and positive opening trades in most of the Asian bourses. Asian stocks are trading higher as South Korea’s industrial output has climbed unexpectedly. The US stocks edged higher over the course of the trading session on Tuesday. The strength that emerged on Wall Street reflected a positive reaction to the some of the latest earnings news, although buying interest remained somewhat subdued. The European markets ended the trading session on Tuesday with mixed results, as investors remained cautious ahead of  U.S. FOMC announcement due today. Investors are also watching for some key U.S. economic data this week, including GDP on Wednesday and the jobs report for January, which is due to be released Friday. Meanwhile, the Indian markets ended a volatile session lower on Tuesday after the RBI reduced repo rate by 25 basis points, as expected widely, for the first time in nine months to s...

Shree Cement Shree Cement (SRCM) posted a strong performance on the bottom-line front (up 264% yoy) in 2QFY2013 which was ahead of our estimates. The stellar performance was led by the power business which registered a profit of  `99cr during the quarter vs a loss of  `112cr in the corresponding quarter of the previous year. Even on a sequential basis the power segment’s profit rose by 63.7%.We expect SRCM to post a 2.9% and 35% growth in its top-line and bottom-line respectively over FY2012-14E. At the current market price, we believe SRCM's cement business is trading at fair valuations of EV/tonne of US$155 on current capacity (US$114 on FY2014E capacity). Source: Angel Broking Sesa Goa Sesa Goa (Sesa) reported disappointing results for 3QFY2013 due to ban on iron ore mining in Karnataka and Goa. Net sales declined by 91.0% yoy to `237cr as there was no iron ore production on the back of mining ban in Goa and Karnataka. As a result, the company repor...

Nik's Diary The Indian market opened flat today, mirroring flat opening in the SGX Nifty and marginally positive opening trades in most of the Asian bourses. Investors would keenly watch out for the outcome of the RBI’s monetary policy meet scheduled today. The US stocks, after trending higher over the past few weeks, showed a lack of direction throughout the trading on Monday. The lackluster performance came as traders seemed reluctant to make any  significant moves following the recent strength. The European markets ended the trading session on Monday with mixed results. Investors were pleased with some positive economic data from China, as well as the surge in US durable goods orders. However, the larger than expected decrease in US pending home sales provided a note of caution. Meanwhile, the Indian markets ended a lackluster session largely unchanged as investors adopted a cautious stance ahead of the monetary policy meet of the RBI scheduled today and the January serie...