The week that was....

India Infoline News Service | Mumbai |

The central bank has revised FY14 GDP growth forecast to 5.5% from 5.7% earlier.

It was a week of intense regulatory moves. India added a 29th state to its fold with the formation of Telangana.

In what could be Governor D Subbarao’s last monetary policy review, the Reserve Bank of India maintained the status quo on repo rate and cash reserve ratio — leaving those unchanged at 7.25 % and 4%, respectively. However, its unexpectedly dovish tone led to the rupee’s slide to over 60 per dollar. The RBI expects headline inflation to remain range-bound at around 5.5% and sees a modest recovery in gross domestic product growth at 5.5% in FY14.

To clamp down on speculative activities in currency derivative trade, RBI said foreign institutional investors would require a mandate from participatory note overseas derivative instrument holders to hedge on their behalf.

On the corporate front, Jet Airways breathed a sigh of relief after the Foreign Investment Promotion Board gave a conditional go-ahead to the controversial $900mn Jet-Etihad deal. This clears the deck for the biggest foreign direct investment in Indian aviation. Etihad can now pick up 24% stake in Jet for $379mn.

Oil marketing companies raised petrol and diesel prices by Rs. 0.7 a litre and Rs. 0.5 paise a litre (excluding taxes), respectively effective Thursday.

To boost falling exports, the government announced a hike of interest subvention to engineering goods, textiles and related segments to 3% from the current 2%.

It also eased norms for foreign retailers such as Walmart and Carrefour to set up shop in the country and raised FDI caps in several sectors to boost forex inflows.

The move came close on the heels of economic data which showed that output of eight core sector industries barely grew in June from a year ago. The index of eight core industries rose 0.1% in June from year ago against 2.3% growth recorded in May.

The HSBC India PMI for manufacturing further came closer to contraction at 50.1 points in July, down from 50.3 in June.

The Centre's fiscal deficit during the first quarter of 2013-14, reached almost half of the Budget Estimates. The figure till June this financial year, stood at Rs 2.62 lakh cr out of the estimated Rs 5.42 lakh cr for 2013-14, showed data released by the Controller General of Accounts. This shows the government’s deficit might cross its budgeted estimates, a cause for concern.

Post the disappointing data, Finance Minister P Chidambaram reassured investors saying the economy will grow between 5.5-6% in the current fiscal on the back of global challenges and slowdown in investment.

In earnings ICICI Bank posted a 25.3% year-on-year rise in net profit at Rs. 2,274cr. India's biggest private sector lender's net interest income rose 19.65% YoY at Rs. 3,820.5cr.

India's largest telecom operator Bharti Airtel's consolidated net profit rose 35.5% quarter-on-quarter to Rs. 689cr, but consolidated revenues dropped 0.9% QoQ at Rs. 20,264cr.

HCL Technologies' Q4 FY13 consolidated net profit increased 16% quarter-on-quarter to Rs. 1,210cr. India's third largest software services exporter's consolidated revenue came in 8% higher QoQ at Rs. 6,944cr. HCL Technologies follows the June ending financial year.

On the global front, the Federal Reserve gave no hint it may be reducing its bond-buying program any time soon as it concluded a two-day policy meeting on Wednesday. But it did signal concern about higher mortgage rates and flagged the risks of inflation falling too far below its target.

It was a mixed bag of US economic data. The US National Association of Realtors said Pending Homes Sales Index, based on contracts signed last month, decreased 0.4% to 110.9. May's index was revised down to 111.3, the highest since Dec 2006, from a previously reported 112.3. 

Confidence among US consumers declined in July from a five-year high as higher borrowing costs and petrol prices tempered Americans’ outlook for the economy, even as their assessment of current conditions improved.

However, US Manufacturing expanded in July at the fastest pace in more than two years, sparked by surges in orders and production that signal companies are growing more optimistic about the US economy’s prospects. ISM’s factory index jumped to 55.4.

It was a week of positive developments in Europe. Eurozone manufacturing activity grew for the first time in two years in July, numbers released on Thursday showed. The purchasing manager's index rose to 50.3 in July, up from 48.8 in June, and above a flash estimate of 50.1. The data marks the first growth in manufacturing activity in two years, suggesting that the region's economy is improving.

The International Monetary Fund's board completed the fourth review of Greece's bailout program, and approved a further 1.7 bn euro ($2.3 bn) in funds for the cash-strapped Eurozone state.

Both central banks -- European Central Bank and Bank of England -- decided to maintain interest rates at a record low of 0.5%. Bank of England opted to keep its asset purchase program on hold, but did not issue a statement about future policy.

Closer home, China's manufacturing sector rebounded in July as the official purchasing managers index ose above the key 50 threshold (50.3 against 50.1 in June) that demarcates expansion from contraction. The final reading of the HSBC China PMI, also released on Thursday, fell to an 11-month low of 47.7 in July from 48.2 in June, in line with its flash estimate released last week.

China’s ruling politburo pledged to stabilise growth while pressing on with economic reforms after exports fell by the most since the global financial crisis and manufacturing and investment cooled. China will keep a prudent monetary policy and a proactive fiscal stance.

Japan’s industrial production fell in June by the most since March 2011, as automakers cut output for a second month after a surge in April. Output declined 3.3% from previous month. Production slid 4.8% from a year earlier in June.

In Indian markets, the 50-share Nifty closed Friday's trade below the 5,700 level. Thus, continuing its losing streak for the eighth session. The Nifty has shed 400 points in eight sessions and also posted a biggest weekly loss since week ended March 22. For the week, the index has fallen 3.5% or 208 points while the Sensex plunged nearly 3%.

So, how will the market perform next week? Pritesh Mehta, Senior Technical Analyst at IIFL, advises caution at current levels. He expects 
5,650 to remain a crucial level, a breach of which would intensify the selling pressure.


Top Stories

RBI leaves policy rates unchanged

The Reserve Bank at its Monetary Policy meet has left the repo rate unchanged 7.25%. It has also left unchanged the CRR at 4%. The central bank has revised FY14 GDP growth forecast to 5.5% from 5.7% earlier. Assaying India Inc's concerns on tightening liquidity conditions, it said the recent liquidity tightening measures are aimed at checking undue volatility in the foreign exchange market and will be rolled back in a calibrated manner as stability is restored.


RBI policy review: A balancing act between growth, inflation

RBI releases macroeconomic and monetary developments

IIFL Inst Eq expects RBI to cut rates by 50bps in H2 2013

MS: See equities struggling till RBI eases liquidity curbs

RBI's caution and pause driven by high CAD: IIFL

RBI apologetic about its recent tightening measures: Nomura

RBI is catering to the currency, for now: HSBC

India must not hurt growth in Re defence: Rajan

Monetary policy stance will hit GDP growth: PHD Chamber

Expect a 25bps cut in repo rate Q4 FY14: ING Vysya Bank

Expect RBI to maintain status quo in Q2: Alexander Muthoot

Fed action to also help Re: Kotak Securities

Bank frauds rises four-fold to Rs. 86.46bn in 2012-13: RBI

RBI to issue new Rs. 100 denomination bank notes

Digital wallet features,exp key to m-banking spread:Study

Core industries slips 0.1% in June

The Indian economy is showing no sign of recovery with growth rate of eight core infrastructure industries slumping to a four-month low of 0.1% in June, mainly due to declining output of crude oil, coal, power and natural gas. The contraction in production of coal, crude oil, natural gas and electricity was 3%, 0.6%, 16.7% and 1.2%, respectively.

Indian manufacturing sector stagnates in July

PM releases 'An Agenda for India’s Growth'

We hope to achieve 5.5-6% growth in FY14: FM

BluFin CCI for July dips slightly to 40.8

Less optimism on macro-economic condition: D&B

Asia to play defining role in 21st century: Anand Sharma

Cos are beginning to put reputation before profit: Survey

Job crisis: Number of resumes uploaded double

Young Indians struggling to find a suitable job: Randstad

Retail inflation for CPI-industrial workers rises to 11.06%


Maruti July total sales up 1.3% YoY

India's largest passenger car manufacturer, Maruti Suzuki India sold a total of 83,299 units in July as against 82,234 units in the same period last year. This includes 8,154 units for export, down 27% year-on-year.


Bajaj Auto July auto sales down 18%

Tata Motors July sales at 51,468 nos

Mahindra & Mahindra tractor sales up 15% in July

TVS Motor motorcycles sales up 8%

GM's retail sales increased 23% in July

Yamaha Motor posts 57% sales growth in July

Hyundai Motor registers 48,704 units sales

NSEL suspends trading of all contracts other than e-Series

National Spot Exchange has suspended trading of contracts, other than e-Series contracts till further notice. It has also decided to merge the delivery and settlement of all pending contracts and deferred the same for a period of 15 days.

Govt seeks clarification from NSEL

Financial Technologies clarifies on NSEL decision

No impact of NSEL's circular on operations: MCX

IIFL clarifies: No proprietary positions, no clients funded on NSEL


FIPB clears Jet-Etihad deal

The Centre has given a conditional go-ahead to Jet Airways to sell 24% stake to Abu Dhabi-based Etihad Airways for Rs. 2,058cr after Etihad submitted an amended shareholders’ agreement and commercial co-operation agreement. "We have approved the Jet-Etihad deal with some conditions," Economic Affairs Secretary Arvind Mayaram said after a meeting of the Foreign Investment Promotion Board.

97% Indian travellers book hotels online: Study

SpiceJet in talks with Emirates for stake sale: Reports

Air India not in favour of charging for pre-selection of seats

Robust air passenger growth in June: IATA

Air freight volumes show signs of life in June: IATA

EU may clear US Airways, American $11mn merger


Nifty closes below 5,700; Realty, power stocks drag


The Nifty ended below 5,700 for the first time since June 27, 2013 amid selling across sectors. This is the eight straight fall for the benchmark indices. Today’s decline was led by realty, power, metals, capital goods, FMCG and banking stocks. Even midcap and small cap stocks were under pressure. Bucking the negative trend were consumer durables, IT and select telecom stocks. The market saw relentless selling pressure despite positive cues from the US, Asia and the European markets. In Asia, Japan’s Nikkei rose 3.2%, China’s Shanghai Composite added 0.2%, Singapore’s Straits Times added 0.4% while Hong Kong’s Hang Seng gained 0.4%. European markets are trading flat.

The Sensex closed at 19,164, down 153 points, while the Nifty shut shop at 5,689, down 50 points over Thursday's close. The advance-decline ratio favoured the bears. On the Bombay Stock Exchange, 1,491 stocks declined against 775 advances, while 141 stocks remained unchanged. Volatility, as measured by India VIX, surged 5.5% at 20.89. It hit a day’s high of 21.22 and a low of 19...Read More

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See WTI crude scaling back to $100/bbl: IIFL

Rabobank maintains bearish view on agri commodities in July

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Research Reports

ICICI Bank Q1 review: IIFL Inst Eq rates buy

IIFL Institutional Equities, a part of the IIFL Group, has rated ICICI Bank a buy post its Q1 FY14 results. Analysing the numbers, the brokerage said, "The bank reported 25% year-on-year growth in net profit driven by higher net interest margins, trading income and lower provisions. Impaired loan ratio remained stable. The negative surprises were sluggish loan growth, tepid fee income growth, and higher operating expenses. Net profit growth would have remained in line with our estimates, but for the higher trading income."

PNB Q1 review: IIFL Inst Eq rates reduce, tgt Rs. 580\share

IIFL maintains mkt performer on Corporation Bank post Q1 nos

IIFL downgrades Dena Bank to mkt performer post Q1 results

IIFL maintains buy on M&M Fin Services post its Q1 results

IIFL rates Indian Bank mkt performer post Q1 results

BoB’s operating performance below expectations: Kotak Sec

Bharti Q1 review: IIFL Inst Eq rates buy, target Rs. 388\sh

IIFL Institutional Equities, a part of the IIFL Group, has rated Bharti Airtel a buy post its Q1 FY14 results. It has also raised its target price on the counter to Rs. 388 per share. Analysing the numbers, the brokerage said, "Bharti’s Q1 was spurred by India wireless, with revenues per minute increasing as expected. However, minutes growth surprised positively at 2.1%. Direct-to-home revenue jumped 11% quarter-on-quarter. Africa minutes yield fell very sharply, but strong control on selling and distribution expenses helped Bharti record flat EBITDA ($283m)."

Bharti Infratel Q1 review: IIFL Inst Eq upgrades to add

HUL Q1 review: IIFL Inst Eq rates reduce, target Rs. 515\sh

IIFL Institutional Equities, a part of the IIFL Group, has maintained its reduce rating on Hindustan Unilever post its Q1 FY14 results. Analysing the numbers, the brokerage said, "HUL reported sales growth of 7%, 3% below our estimate due to lacklustre growth of 2% in personal products. Adjusted net profit was in line with our estimates due to higher than estimated other income." Going forward, it expects gross margin expansion to be lower than the current 180 bps due to higher raw material cost and rupee depreciation.

Nestle Q1 FY14 review: IIFL Inst Eq retains add rating

Colgate Q1 review: IIFL Inst Eq rates reduce, tgt Rs. 1,350

Motilal Oswal Securities on Colgate Palmolive's Q1 results

Wipro Q1 FY14 review: IIFL Inst Eq rates add

IIFL Institutional Equities, a part of the IIFL Group, has rated Wipro an add post its Q1 FY14 results. It continue to remain positive on Wipro due to improving growth prospects and cheaper valuations. Analysing the numbers, the brokerage said, "Wipro’s Q1 results were in line with our estimate. Once again, its revenue growth was less than that of peers. Weak growth in the US and in almost all large verticals (except energy and utility) impacted Wipro’s revenue growth. However, the management commentary is more positive now. Further, revenue growth in Q1 FY14 was better than in Q1 FY13 and Q1 FY12. Revenue guidance for Q2 FY14 (increase from 2% to 4%) too is reasonably strong and is the best in nearly two years. Commentary on deal wins has improved and margin levers are relatively high due to employee utilisation being at a five-year low."

HCL Technologies Q4 review: IIFL Inst Eq rates buy

IIFL rates Persistent Systems a buy post Q1 FY14 results

IIFL Inst Eq advises buy on cement cos on every dip

IIFL Institutional Equities, a part of the IIFL Group, continues to stay positive on the cement sector from a medium-term perspective. It advises investors to use any sharp correction in the near-term as a good buying opportunity. On the pricing front, the brokerage said, cement prices declined by up to Rs. 30 per bag in July in most regions, barring a few states such as Gujarat and Uttar Pradesh, which registered an increase of Rs. 15-20 per bag. "Prices declined primarily due to severe monsoon depressing demand. The current all-India average price is down 6% year-on-year and 3% month-on-month." Going forward, it expects cement prices to decline until the monsoon and increase post monsoon. It also sees demand growth improving from H2 FY14 as pre-election spending in various states is likely to boost infra segment demand coupled with waning of the high base effect.

Weak demand, cost hikes hit cement profitability: ICRA

UltraTech Cement Q1 FY14 review: IIFL Inst Eq rates buy

UPA gone, but is NDA on? An opinion poll analysis

Opinion polls commissioned by two leading television news channels indicate that the Congress is set to lose between 67-87 seats in next year's general elections. Both polls indicate deep disenchantment driven by the parlous state of the economy, lack of governance, and corruption. Commenting on the findings of the opinion poll, IIFL Institutional Equities, a part of the IIFL Group, said the results seem to endorse its hypothesis that the incumbent United Progressive Alliance is set to lose a large chunk of seats. "However, National Democratic Alliance, the principal opposition, does not look like the default beneficiary." The brokerage said opinion polls in the past have got the direction of vote swings right but have been way off the mark in estimating margins. "Even adjusting for this, prospects of NDA or UPA forming a cohesive government with a focus on governance do not seem particularly bright."

'Chidambaram's govt to be industry friendly if re-elected'

Jindal Steel & Power Q1 review: IIFL Inst Eq rates buy

Petronet LNG Q1 review: IIFL Inst Eq downgrades to reduce

IDFC Q1 FY14 review: IIFL Inst Eq rates buy, tgt Rs. 160\sh

Dr Reddy’s Labs Q1 FY14 review: IIFL Inst Eq maintains buy

IIFL maintains mkt performer rating on MCX post Q1 results

IIFL Inst Eq rates reduce on Page Ind, target Rs. 3950\sh

IIFL rates Tata Communications a mkt performer post Q1 nos

Thomas Cook Q2 CY13 review: IIFL Inst Eq rates buy

Zee Entertainment Q1 FY14 review: IIFL Inst Eq rates add

IIFL rates Sterlite a buy post Q1 FY14 results

Greaves Cotton Q1 review: IIFL Inst Eq rates buy

Havells Q1 FY14 review: IIFL Inst Eq rates buy

Ipca Laboratories Q1 review: IIFL Inst Eq rates buy

Kalpataru Power Q1 review: IIFL Inst Eq retains add

Torrent Pharma Q1 review: IIFL Ins Eq rates buy, tgt Rs. 543

Godrej Properties Q1 review: IIFL Inst Eq maintains sell

CESC Q1 FY14 review: IIFL Inst Eq rates buy

Dish TV Q1 review: IIFL Inst Eq rates buy

Thermax Q1 FY14 review: IIFL Inst Eq rates reduce

IIFL Inst Eq on TRAI spectrum consultative paper

IIFL rates Motherson Sumi a buy post its Q1 results

Earnings Corner

NTPC Q1 PAT at Rs. 25.3bn

State-run NTPC has reported a marginal year-on-year rise in its Q1 FY14 profit at Rs. 2,527cr as it managed to lower fuel cost. Sales, however shrunk over 3% YoY to Rs. 15,613cr.

L&T Construction bags Rs. 8,250cr Riyadh metro project

ICICI Bank Q1 net profit at Rs. 22.74bn

India's second largest lender by assets, ICICI Bank posted a 25.3% increase in Q1 FY14 net profit at Rs. 22.7bn as compared with Rs. 18.2bn rupees a year earlier, led by higher loan growth and income from fees and commissions. Net interest income rose 19.6% to nearly Rs. 38.2bn.

HCL Tech Q4 PAT at Rs. 12.1bn

India's fourth largest information technology firm HCL Technologies reported a consolidated net profit of Rs. 1,209.6cr for the fourth quarter ended June 30, 2013, up 41.6% compared with Rs. 854.1cr in the same period last year. The company follows July to June as its financial year.

Bharti Airtel Q1 PAT at Rs. 6.89bn

India's largest telecom operator Bharti Airtel's consolidated net profit rose 35.5% quarter-on-quarter to Rs. 689cr, but consolidated revenues dropped 0.9% QoQ to Rs. 20,264cr.

Idea Q1 PAT at Rs. 4.62bn

RComm Q1 cons net profit at Rs. 1.08bn

Indian consumers love to share mobile videos: Survey

Vodafone India asks Delhi HC to transfer plea to TDSAT

Vodafone India joins hands with Twitter

Adani Power Q1 loss at Rs. 11.98bn

Bank of Baroda Q1 PAT at Rs. 11.67bn

PowerGrid Corp Q1 net profit at Rs. 10.4bn

Ultra Tech Cement Q1 PAT at Rs. 6.73bn

Allahabad Bank Q1 net profit at Rs. 4.13bn

EID Parry Q1 turnover at Rs. 4.03bn

JSW Steel Q1 net loss at Rs. 3.82bn

Bharti Infratel Q1 PAT at Rs. 3.67bn

Dr. Reddy's Q1 PAT at Rs. 3.61bn

Linde India reports Q2 gross turnover of Rs. 3.5bn

JP Associates Q1 PAT at Rs. 3.35bn

Indian Bank Q1 PAT at Rs. 3.17bn

Jammu & Kashmir Bank Q1 net profit at Rs. 3.08bn

Reliance Power Q1 PAT at Rs. 2.4bn

Andhra Bank Q1 PAT at Rs. 2.31bn

Petronet LNG Q1 PAT at Rs. 2.25bn

OnMobile Global Q1 revenue at $1.9bn, up 2.4% YoY

Colgate-Palmolive Q1 FY14 PAT stands at Rs. 185.2cr

Titan Industries Q1 PAT at Rs. 1.82bn

Castrol India Q2 net profit at Rs. 1.54bn

Indoco Remedies Q1 revenue at Rs. 1.48bn

Reliance Capital Q1 PAT at Rs. 1.33bn

Vijaya Bank Q1 PAT at Rs. 1.32bn

Glenmark Pharma Q1 PAT at Rs. 1.29bn

GSK Consumer Q1 net profit at Rs. 1.2bn

United Spirits Q1 net profit at Rs. 1.18bn

Tata Global Q2 net profit at Rs. 1.12bn

Tata Teleservices shows 5% growth in revenues

CEAT Q1 net profit up 125%

Godrej Properties Q1 net profit jumps 130%

Gujarat Pipavav Port Q2 net profit up 124%

Havells Q1 net profit at Rs. 946.60mn

Karnataka Bank Q1 PAT at Rs. 941mn

Prestige Estates Q1 net profit at Rs. 866.60 mn

Motherson Sumi Q1 PAT at Rs. 732mn

Ipca Labs Q1 net profit at Rs. 717mn

Madras Cements Q1 net profit at Rs. 688.50mn

MCX net profit at Rs. 601.2mn

IFCI Q1 net profit at Rs. 551.10mn

Jubilant Life Q1 loss at Rs. 526mn


Berger Paints Q1 cons net profit at Rs. 491mn

Siemens Q3 loss at Rs. 488mn

Polaris Financial Q1 PAT at Rs. 430mn

Jubilant Foodworks Q1 PAT at Rs. 340mn

Ajanta Pharma Q1 net profit at Rs. 330mn

Greaves Cotton Q1 net profit at Rs. 318mn

VIP Inds Q1 PAT at Rs. 230mn

Mahindra Holidays Q1 PAT at Rs. 210mn

HCC Q1 PAT at Rs. 192mn

Alstom T&D India Q1 net profit at Rs. 151mn

PVR Q1 net profit at Rs. 140mn

Indian Metals Q1 PAT at Rs. 100.7mn

Balrampur Chini Q1 net loss at Rs. 97mn

Sun Pharma Advanced Q1 net profit at Rs. 95.1mn

TV18 Broadcast Q1 PAT at Rs. 60mn

Shoppers Stop Q1 net profit at Rs. 16mn

 

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