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The week that was....

India Infoline News Service | Mumbai |

In another measure, it asked banks to maintain their average cash reserve ratio at 99% of the daily requirement as against earlier 70%.

On Tuesday, RBI announced additional liquidity tightening measures to contain excessive speculation and volatility in the foreign exchange market. It reduced the liquidity adjustment facility for each bank from 1% of total deposits to 0.5% of its own net demand and time liabilities, thus limiting bank's access to borrowed funds. The limit will come into force with immediate effect and continue till further notice.

In another measure, it asked banks to maintain their average cash reserve ratio at 99% of the daily requirement as against earlier 70%. This measure would come into effect after a fortnight.

On July 15, the RBI unleashed a surprise 200 bps hike in the Marginal Standing Facility besides imposing an overall cap of Rs. 750bn for LAF borrowing. MSF is used by banks, with no excess government securities, to borrow under RBI's LAF window at a penal rate which is higher than the prevailing repo rate.

It has also made gold imports for domestic consumption tougher and forced exporters to bring home their dollar earnings quicker. RBI said banks and other entities allowed to import gold should ensure that at least one-fifth of it is used for further exports. The rest can be used in the domestic market but only for jewellery making. This effectively means hoarding of gold in its raw form such as in bars and coins won’t be allowed.

In economic news, China’s manufacturing weakened further in July, signaling the worst of the nation’s slowdown has yet to be reached. The PMI reading of 47.7 was less than estimated and if confirmed in the final report August 1, would be the lowest in 11 months. Readings below 50 indicate contraction. To compound matters, China has ordered more than 1,400 companies in 19 industries to cut excess production capacity this year, part of efforts to shift toward slower, more-sustainable economic growth.

Japan’s exports rose for a fourth straight month in June as a weak yen made the nation’s products more competitive and shipments to the European Union rebounded. Exports gained 7.4% from a year earlier.

Eurozone Purchase Managers' Index rose to an 18-month high in July. The PMI rose for the fourth successive month, up from 48.7 in June to 50.4.

US factories received more orders for automobiles and machinery in June, pointing to a pickup in manufacturing that will help propel the world’s largest economy in the second half of 2013.

US Jobless claims rose by 7,000 to 343,000 in the week ended July 20 from a revised 336,000 in the prior period. Consumer confidence rose last week as an improving job market helped make Americans the least pessimistic about the economy in more than five years.

For the week, the benchmark indices are down 2%. Among sectors, capital goods ended down 10.2%, metal (-6.7%), banking (-4.7%), oil & gas (-3.2%) were the major losers. The only sector to end the week in the positive was pharmaceuticals up 2% week-on-week.

So, what to expect from market’s next week? Pritesh Mehta, Senior Technical Analyst at IIFL, advises caution at current levels. He does not rule out a retest of 5,477 levels on the Nifty, which was its April low. Ambani is the most pessimistic on banking stocks, he does not rule out the Bankex falling below 10,000 levels.

Top Stories

Re booster: RBI sets bank LAF access at 0.5% of NDLT

The Reserve Bank has set the overall limit for access to liquidity adjustment facility by each individual bank at 0.5% of its own net demand and time liabilities.

Holcim ups stake in Ambuja Cements to 61.39% from 50%

Holcim Group has decided to consolidate its holding in ACC through Ambuja Cements. As a first step, Ambuja Cements will acquire 24% stake in Holcim India from Holderind Investments, Mauritius, for Rs. 35bn. This will be followed by the merger of Holcim India into Ambuja Cements.

RBI puts more restrictions on gold imports

RBI’s five rupee boosters: A quick glance

RBI's recent steps will delay economic recovery: CRISIL

How will interest rates pan out over next six-months?

IIFL Inst Eq sees no July rate cuts despite RBI's Re steps

Expect RBI to keep repo rate, CRR unchanged : ICRA

Kumar Mangalam Birla resigns from RBI Board

Q1 review: IIFL Inst Eq downgrades Ambuja Cements to sell

ACC Q1 review: IIFL Inst Eq rates reduce on rich valuations

Indices end week down 2%

After gaining 5% in the July series, the August series witnessed a negative start amid intensified selling pressure in interest rates sensitives like banking, auto and the realty...Read More

July series: Nifty unwinds to end barely above 5900

Which is the best performing mutual fund now?

IIFL analysts win India’s Best Market Analyst Awards 2013

IIFL's metal, energy picks for July 29-Aug 3 week

News In Focus

IBM preferred choice among IT grads: Study

Firstnaukri.com's Employer Preference Survey for 2013 has thrown up interesting trends. BE/B Tech IT students continue to prefer IBM as the most preferred brand. TCS follows a distant second followed by Infosys at third place among the top employers choice for IT engineers this year.

Why cheque bouncing provisions under NI Act are ineffective?

Cheque bouncing cases are taking at least three-to-five years for recovery of money. This delay defeats the very purpose of the Negotiable Instruments Act.

Bank credit grows 14.2%, deposits rise 13.7% YoY

Realty cos switch to social media to entice buyers: Survey

Real estate firms throughout India spend about Rs. 2,500cr annually on publicity across different media and digital marketing accounts.

Residential sales volume up 11% in H2 FY13: Knight Frank

HDFC plans to buy Lever House in Mumbai: Reports

Indians prefer travelling over shopping, eating out: Study

A survey by American IT giant Pitney Bowes found 50% Indians prefer travelling over other leisure activities such as shopping and restaurants.

India’s new affluents redefine the luxury segment

Railway, airfare spending by Indians touch record high

Is video the next big advantage for developing markets?

Over 90% of dementia cases in China are undetected: Study

See long-term potential for renewable energy sector: Study

Remove gender barriers to secure Asia’s food future: Study

Research Reports

See downside risk to FY14 Sensex target of 21,700: Nomura

Nomura Financial Advisory remains negative on India over the next nine months due to deteriorating external finances, weak rupee, a poor growth outlook and the election cycle. It has revised down its FY14 GDP growth forecasts to 5% year-on-year from 5.6%. The same for FY15 has been scaled back to 5.8% from 6.7%. ..Read More

HSBC: Overweight on India, see Sensex at 20,700 by yr-end

ITC Q1 review: IIFL Inst Eq maintains buy, tgt Rs. 375\sh

IIFL Institutional Equities, a part of the IIFL Group, has maintained its buy on ITC post its Q1 FY14 results with a target price Rs. 375 per share. Commenting on the company's results, the brokerage said, "ITC reported net profit growth of 18%, in line with estimates. While net sales of cigarettes at 7.1% seems disappointing, it was due to one-off in the base. Adjusted for this, cigarettes net sales growth would be 11.4%. Total expenses for the cigarettes division was down 8%, which enabled segment EBIT growth of 18%." In Q2, it sees ITC benefiting from the increase in Goldflake 69mm price, which would push up gross sales by 2%. "Moreover, national rollout of 64mm would help improve volume growth from -2% in Q1 FY14."...Read More

RIL Q1 FY14 review: IIFL Inst Eq maintains reduce on RIL

IIFL Institutional Equities, a part of the IIFL Group, has maintained its reduce rating on Reliance Industries post its Q1 FY14 results. The Mukesh Ambani-led company posted a Q1 FY14 profit after tax of Rs. 5,352cr as against Rs. 4,503cr in the same period last year, an increase of 18.9% year-on-year. Revenue dipped 4.6% YoY at Rs. 90,589cr on back of lower output from its flagship KG-D6 gas fields. Gross refining margins came in at $8.4 on turning every barrel of crude oil into fuel as compared to $7.6 per barrel YoY. KG-D6 gas production fell 53% to 49.2bn cubic feet in Q1...Read More

Q1 review: IIFL Inst Eq rates L&T sell, cautions on margins

IIFL Institutional Equities, a part of the IIFL Group, has rated Larsen & Toubro a sell post its disappointing Q1 FY14 results. Larsen & Toubro posted a Q1 net profit of Rs. 7.56bn as compared to Rs. 8.64bn in the same period last year. Total income increased from Rs. 125.63bn to Rs. 130.28bn year-on-year...Read More

Q1 review: IIFL Inst Eq rates Bajaj Auto add, tgt Rs 2250\sh

IIFL Institutional Equities, a part of the IIFL Group, has retained its add rating on Bajaj Auto post its Q1 FY14 results. Commenting on the same, it said, "The sharp depreciation in the rupee will drive reasonable revenue growth and strong margin expansion for Bajaj Auto despite weak volumes. Volume outlook looks weak due to loss of market share in domestic two-wheelers and country-specific issues in the export markets. As against our earlier volume growth estimate of 8% for FY14, we expect zero volume growth now. However, higher export realisations and profitability would more than offset this, leading to 3-4% upgrade to our EPS estimates."...Read More

Maruti Q1 review: IIFL Inst Eq rates buy, tgt Rs. 1,800\sh

IIFL Institutional Equities, a part of the IIFL Group, has retained its buy on Maruti Suzuki post its Q1 FY14 results. "Maruti’s Q1 operating results were in line with our estimates. Gross margin improved 180bp quarter-on-quarter driven by currency. However, operating expenses rose 200bp due to deleverage. EBITDA margin dropped 20bp to 11.4% in line with our estimate. Other income almost doubled YoY and drove the 13% PAT beat." It believes export momentum will pick up (12-15% growth in Q2-Q4) after country-specific issues led to a 35% decline in Q1. Given the recent sharp depreciation in the rupee, the brokerage does not expect incremental currency benefits from here on.   It has cut its EPS estimates by 5-6% due to a slight cut in volume and margin estimates and a higher tax rate. The brokerage has cut its target price from Rs. 1,920 to Rs. 1,800, based on 14 times FY15 EPS...Read More

Hero Moto Q1 review: IIFL Inst Eq rates add, tgt Rs. 2100\sh

IIFL Institutional Equities, a part of the IIFL Group, has recommended an add rating on Hero MotoCorp post its Q1 FY14 results. The auto major's Q1 PAT came in 2% above estimates due to better margins. "Gross margin (ex-other income) improved 40bps quarter-on-quarter and EBITDA margin improved 100bp QoQ (90bp above our estimate). Profit before tax was 7% above our estimate; however, higher tax rate capped PAT beat to 2%. FY13 was the last year of 100% income tax exemption for Hero’s Haridwar plant. As a result, tax rate increased from 16% in FY13 to 27% in Q1 FY14 (we had expected 24%)," it stated. The brokerage has increased its profit before tax estimate, but higher tax rate has led it to cut its FY14 EPS estimate by 2%. "We maintain our FY15 EPS estimate. We do not build in any cost savings envisaged by the managem, pending execution. A 100bps cost saving can increase FY15 EPS by 8-9%," it added...Read More

Cairn Q1 review: IIFL Inst Eq rates add, tgt Rs. 370\sh

IIFL Institutional Equities, a part of the IIFL Group, has rated Cairn India an add post its Q1 FY14 results. Cairn India’s revenue and EBITDA were below estimates but profit after tax was in line owing to lower tax rate and higher forex gains. On its exploration activities, the brokerage noted that meaningful new discoveries are critical for Cairn to sustain its Rajasthan production at 210-220kbpd over the next 4-5 years. "The company exited Q1 FY14 at 180kbpd from Rajasthan, up by 10kbpd quarter-on-quarter. It drilled only two exploratory wells in Q1 FY14 with one discovery. With more rigs likely to be available for exploratory drilling by December, development of potential new discoveries may be pushed out further."...Read More

GAIL Q1 review: IIFL Inst Eq maintains reduce

Q1 FY14 review: IIFL Inst Eq rates HDFC an add

Yes Bank Q1 review: IIFL Inst Eq reiterates buy

Reduce Jubilant Foodworks, tgt Rs. 890\share: IIFL Inst Eq

Q1 FY14 review: IIFL Inst Eq downgrades Asian Paints to add

Q1 review: IIFL Inst Eq rates Shriram Transport Fin a buy

Sesa Sterlite Q1 review: IIFL Inst Eq retains reduce

United Phosphorus Q1 review: IIFL Inst Eq rates add

Dabur Q1 review: IIFL Inst Eq rates add, tgt Rs. 167\sh

Q1 review: IIFL Inst Eq rates Rallis add, tgt Rs. 165\sh

Q1 FY14 review: IIFL Inst Eq retains buy on DB Corp

Q1 review: IIFL Inst Eq rates Coromandel Int’l an add

IIFL Inst Eq: Excess rainfall a risk to kharif crop

Credit Suisse bullish on Sun TV

Hindustan Zinc a buy post Q1 results, tgt Rs. 130\sh: IIFL

ING Vysya Bank a buy post its Q1 FY14 results: IIFL

IIFL rates Unichem Lab a buy post Q1 FY14 results

Info Edge a buy post Q1 results, target Rs. 355\share: IIFL

Buy Infotech Enterprises post Q1 FY14 results: IIFL

Earnings Corner

Cairn India Q1 net profit at Rs. 31.30bn

Cairn India reports 22% quarter-on-quarter jump in June quarter profit to Rs. 3,127cr on forex gain arising out of weak rupee. The Vedanta group company has registered forex gain of Rs. 682cr. Sales declined 7% QoQ to Rs. 4,063cr on lower volumes.

Cairn India plans to invest $3bn over three-years: Reports

ITC Q1 net profit at Rs. 18.91bn

ITC reported an 18% jump in net profit at Rs. 1,891.33cr from Rs. 1,602.14cr year-on-year. Net sales rose 10.3% growth at Rs. 7,338.52cr.

PNB Q1 PAT up 2.3% YoY at Rs. 12.8bn

Punjab National Bank posted 2.4% rise in net profit at Rs. 1,275.32cr from Rs. 1,245.67cr in the same period of the previous fiscal.

Wipro Q1 PAT at Rs. 16.23bn

Wipro reported a 11% year-on-year growth in first quarter net profit from its continuing operations at Rs. 1,623cr.

ITC eyes Rs. 1 lakh crore sales from new FMCG business

Paper industry to continue to grow at 6-8% : ICRA

PNB Q1 PAT up 2.3% YoY at Rs. 12.8bn

Wipro Q1 PAT at Rs. 16.23bn

Nasscom maintains 12-14% growth forecast for FY14

US market seems much better: Azim Premji

HUL Q1 PAT at Rs. 10.20bn

Hindustan Unilever's Q1 FY14 total income rose 7% year-on-year at Rs. 6,809cr while net profit came in at Rs.1,019cr.

L&T Q1 PAT at Rs. 7.5bn down 12.5% YoY

Larsen & Toubro posted a Q1 net profit of Rs. 7.56bn as compared to Rs. 8.64bn in the same period last year. Net sales increased 5% YoY to Rs. 12,555cr from Rs. 11,955cr.

HUL: Sanjiv Mehta to take over from Nitin Paranjpe

Outlook for infrastructure space remains negative: India Ratings

BHEL bags order from NTPC worth Rs. 1.32bn

FM to revive Rs. 310bn stalled projects

Deadlines set for key infrastructure project investments

Madhucon Projects clarifies reports on stake sale

Maruti Suzuki Q1 net profit at Rs. 6.32bn

Maruti Suzuki posted a 49% jump in net profit at Rs. 632cr from Rs. 424cr a year earlier.

Maruti Suzuki threatens to shut down Manesar plant

Maruti SX4, Toyota Corolla Altis to attract lower excise

Hero MotoCorp Q1 PAT at Rs. 5.49bn

Hero MotoCorp reported a 10.86% decline in its net profit at Rs. 548.58cr on account of higher tax outgo on its Haridwar facility and lower sales due to early onset of monsoon.

Bank of India Q1 PAT at Rs. 9.64bn

Sterlite Industries Q1 PAT at Rs. 9.34bn

GAIL Q1 PAT at Rs. 8.08bn

ABB Q1 Operational EBITDA at $1.6 bn

Yes Bank Q1 PAT at Rs. 4.01bn

Shriram Transport Q1 net profit at Rs. 3.66bn

Ambuja Cements Q1 net profit at Rs. 3.24bn

Asian Paints Q1 FY14 PAT down 4.5% at Rs. 2.75bn

Nestle Q2 net profit at Rs. 2.71bn

ACC Q2 CY13 net profit at Rs. 2.62bn

MRF Q3 net profit at Rs. 2.27bn

Zee Entertainment Q1 net profit at Rs. 2.25bn

JSW Energy Q1 net profit at Rs. 2.14bn

United Phosphorous Q1 net profit at Rs. 2.12bn

Muthoot Finance Q1 net profit at Rs. 1.94bn

Dabur Q1 net profit at Rs1.86bn

ING Vysya Bank Q1 FY14 net profit at Rs. 1.75bn

CESC Q1 PAT at Rs. 1.31bn

Colgate Q2 '13 profit at $561mn

IOB Q1 net profit at Rs.1.26bn

Dewan Housing Q1 net profit at Rs1.2bn

Raymond Q1 FY14 cons net sales up 4% YoY at Rs. 874cr

Biocon Q1 net profit at Rs. 935mn

Indiabulls Real estate Q1 net profit at Rs. 726mn

Bata India Q2 PAT at Rs. 619.40mn

Kirloskar Oil Q1 net profit at Rs. 528.9mn

Thermax Q1 net profit at Rs. 502.5mn

SKF India Q1 net profit at Rs. 458.7mn

Tata Coffee Q1 net profit at Rs. 403mn

Century Textiles Q1 net profit at Rs. 376.50mn

Sterlite Technologies Q1 PAT at Rs. 226mn

Central Bank of India Q1 net profit at Rs. 219.3mn

Granules India Q1 net profit jumps 134% YoY

Mahindra Lifespaces Q1 net profit at Rs. 157.6mn

Prism Cement Q1 net loss at Rs. 478.7mn

Unichem Labs Q1 PAT at Rs. 360.9mn

Dish TV Q1 net loss at Rs. 303.70mn

Piramal Glass Q1 PAT at Rs. 257mn

Coromandel Int'l Q1 net profit at Rs. 214.20mn

IL&FS Investment Q1 net profit at Rs. 183mn

Novartis India Q1 PAT at Rs. 139mn

Edelweiss Financial Q1 net profit up 40% YoY

Tara Jewels Q1 PAT jumps 32% YoY

Kansai Nerolac Q1 gross sales at Rs. 9.33bn

Tata Elxsi Q1 net profit at Rs. 89.3mn

SKS Microfinance Q1 FY14 PAT at Rs. 5cr

Sterling Holiday Resorts Q1 net profit at Rs. 6mn

Strides Arcolab Q2 net profit at Rs. 21.6mn

Kalpataru Power Q1 revenue up 27%

Greenply Q1 net profit up 26%

IIFL Q1 cons net profit up 21% YoY

Thangamayil Jewellery sales up by 19%

M&M Financial Q1 net profit up 18% YoY

KPIT Cummins Q1 net profit up 17%

Hindustan Media Q1 revenue up 13%

SBBJ Q1 net profit up 12%

Blue Star Q1 net profit up 11%

Capgemini H1 2013 consolidated revenues dips 2.3%

Bharti Walmart reports net loss for 2012

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