Aviation ministry official named new chairman

State-run Air India said the government has appointed Rohit Nandan, a joint secretary in the ministry of civil aviation, as the ailing carrier's new chairman and managing director.

Nandan, who assumed charge on Friday, will replace incumbent Arvind Jadhav and will oversee the airline's turnaround and debt restructuring plan.

Loss making Air India is in talks with banks to restructure USD 4 billion of working capital debt and is in the midst of implementing a turnaround plan with a hub-and-spoke route model focus, cut costs by redeploying staff and unload non-core real estate.

A financial restructuring plan for Air India will take about three months to complete, the civil aviation minister said on Friday. The airline is estimated to report a loss before tax of Rs 6,994 crore (USD 1.5 billion) for the year ended March.

Inflation, interest rate concerns to keep mkt volatile

Apart from concerns over a slowdown of the US economy and the euro zone debt crisis, high domestic inflation and fears of an interest rate hike will keep the stock market volatile this week, say experts.

The 30-share Bombay Stock Exchange Sensex index lost 2.69% to close at 16,839.63 last week amid persistent selling pressure on worries over the global economic crisis after ratings firm S&P downgraded the US creditworthiness.

An unprecedented downgrade of the US credit rating by Standard & Poor's on August 5 led to a sharp fall in the market, with investors resorting to panic selling.

On Tuesday, when the markets will open for trade this week, the overall inflation numbers for July will be released.

Headline inflation stood at 9.44% in June, while weekly food inflation shot up to 9.9% at the end of July, sparking fears of a further round of interest rate hikes to tame prices.

The market was surprised by the higher-than-expected rate hike of 50 basis points by the Reserve Bank last month. Now, the sharp spurt in food inflation has raised concerns that the central bank will stick to its monetary tightening policy.

"People are expecting interest rates to go up. Worries over the US and euro zone crisis are still high and fresh in the minds of investors. There is a possibility of a pullback from current levels, but we should be bracing for some more volatility in the short term," said Geojit BNP Paribas Research Head Alex Mathews.

Analysts said that given the tricky situation in overseas markets and local macro-economic headwinds, it would be wise to remain cautious and stay stock-specific.

The global environment will play a pivotal role in directing the investor sentiment, they added.

Domestically, it will be inflation and macro-economic concerns that will guide the investor mood.

"Fund flows in the Indian markets have not been that bad, considering the intensity of the sell-off. The government, too, is trying its best to address the governance deficit. But inflation continues to be a big headache, with food inflation flaring in end-July," IIFL Head of Research Amar Ambani said.

On the macroeconomic front, exports continue to be robust, but might moderate in the coming months owing to the slowdown in the US and Europe, he added.

BHEL Jun qtr PAT seen up 17.6% at Rs 785cr

Angel Broking has come out with its earning estimates on capital goods for the quarter ended June 2011. According to the research firm, BHEL June quarter sales are expected to go up by 25% at Rs 8251crore, year-on-year, (YoY) basis.

The company's net profit is expected to go up 17.6% at Rs 785crore on YoY basis.

Gold price may hit Rs 25,000 by Diwali

Gold prices are likely to hit Rs 25,000 per 10 grams by this Diwali due to rise in demand for the yellow metal as a better investment alternative, analysts said.

The European Union's economic crisis and sluggish market recovery in US is leading to increased investments in silver also, which could see the prices of the metal touching Rs 65,000 per kg by Diwali season in October, they said.

Gold prices are currently ruling around Rs 22,450 per 10 gram, while silver is selling at around Rs 54,700 per kg.

"The recovery in US markets is not on expected grounds as the country's unemployment rate was higher in June compared to May this year adding to the uncertainty over the pace of the economic recovery," Emkay Global Financial Services, a commodity brokerage firm said.

According to Emkay Commodities Head Atul Shah, the European Union debt crisis involving Portugal, Ireland and Spain has also shaken investors confidence who are increasingly using gold and silver to hedge against losses.

The Libyan crisis that is far from over is also putting pressure on crude prices leading to volatility in the oil markets, Shah pointed out.

"With uncertainty in world economy and no clear solution in the coming months, the gold prices could climb to Rs 25,000 per 10 grams and silver can touch Rs 65,000 per kg by Diwali," Shah said.

According to WellIndia, another commodity brokerage firm, it is expected that gold and silver may trade upside in the next few weeks because of uncertainty in global economy and safe heaven demand by investors.

According to World Gold Council data, investment demand in Gold from US continues growing. China and India accounted for 51% of the world gold consumer demand and this year it can increase up to 58%, WellIndia said.

"Demand for silver is increasing day by day in China and India. Industrial and jewellery demand is not only increasing but also investors are using gold and silver hedge against inflation," it added.

Higher crude realisation to scale up oil cos Q1 earnings

Despite teething problems like slower gas production at Reliance Industries (RIL) and royalty and cess disputes between ONGC and Cairn India , the oil and gas is not on slippery ground.

Numbers for the April-June quarter for the sector are likely to be good q-o-q, essentially led by higher crude realisation and higher refining and petchem margins.

Crude oil continued its upward journey during the quarter by averaging at around USD 117/bbl Continued unrest in Libya coupled with expectations of tightening of the global oil markets has led to highest crude oil prices since 2008. Petroleum product crack spreads further improved during the quarter, aiding refining margins. Gasoline-crude spreads witnessed an expansion during the quarter from USD 12.7/bbl to USD 15/bbl., q-o-q.

Following are what investors can expect from the first quarter results of RIL, ONGC and Oil India

On the back of strong macro environment, RIL is likely to report a better set of numbers during the quarter. Its net sales will grow 35.5% y-o-y at Rs 78,899.2 crore. Its EBITDA margin will decline by 315 basis points to 13%. Its net profit will grow 17% to Rs 5,895 crore. Analysts have an 'accumulate' rating on RIL stock with a target of Rs 1,036 despite its KG-D6  block’s output slipping due to technical problems to about 52 mcmd from 60 mcmd in y-o-y.

ONGC will also see a muted growth in its sales on the back of the provisional estimate of 33% subsidy share for upstream companies. Its sales will yet grow 10% at Rs 15,017.9 crore. Its net profit will also grow 10%. Marketmen have a ‘buy’ rating on the stock with a target price of Rs 345.

Oil India is likely to report good set of numbers on account of expansion in net realisation during the quarter with higher volumes from its Namaligarh refinery. It will see a huge jump in its sales and profits as the refinery was shut during the corresponding quarter of previous year. Industry experts expect Indian Oil’s net realisation during the quarter to stand at USD 59.5/bbls, up from USD 50/bbls y-o-y.

Following are views of some brokerages on oil and gas earnings expectations in April-June quarter.

IIFL: "Refining margins have been higher on a sequential basis on account of improvement in gasoline spreads, which will result in better performance of RIL’s refining segment. Crude oil production from MA-1 field and gas production from KG-D6 field are likely to be tad lower on a sequential basis. Sharp y-o-y jump in production from Rajasthan field would lead to robust results for Cairn India and will translate into higher total production for ONGC. APM gas price hike will further improve ONGC’s performance.

Infosys results keenly eyed amid wage hikes, global worries

The first quarter earnings season will gain momentum with technology bellwether Infosys announcing its first quarter (April-June) numbers on Tuesday. The results, which come amidst economic uncertainties in Europe and margin pressures back home, will set the tone for the overall IT sector performance this quarter.

Infosys had disappointed the street in the fourth quarter with earnings and rupee guidance for the current fiscal well below what analysts had expected. Also, the unexpected resignation of TV Mohandas Pai, HR head and a long-serving member of the company, sparked speculation of a rift in the senior leadership team.

The stock has been under pressure since then, shedding 8%, compared with a 6% decline in the CNX IT Index. The market therefore will be keenly glued to the developments over at the Bangalore-based company, especially after better than expected results by overseas rivals Accenture and Oracle.

During the quarter ICICI’s KV Kamath was named the Chairman at Infosys. He will replace founder and current chairman NR Narayana Murthy who will retire on August 20.  

Most Indian software services providers, including Infosys, are expected to report better earnings for the first quarter as demand is likely to be strong despite macro-economic worries. Revenue growth is likely to be "healthy" 20% year-on-year in April-June.

Infosys' margins will be under pressure due to the wage hike it implemented in the quarter. The company raised wages by 10-12% for offshore employees (people working in Infy locations in India) and 2-3% for onsite employees (people working at client locations). Pricing is also likely to be flattish (up about 1%) in the quarter.

"Infosys had guided to a 400 bps sequential decline in margins in Q1 FY12 due to 260 bps quarter-on-quarter decline due to wage hikes, a 70 bps q-o-q decline due to rupee appreciation and a 70 bps q-o-q decline due to higher visa costs. Management has commented that it has been unable to significantly improve utilisation due to the unevenness of demand and the mismatch of skill-sets between demand and supply," according to Manish Nigam and Sagar Rastogi of Credit Suisse.

The rupee, however, has depreciated 0.5% sequentially in April-June, and this Edelweiss Securities says will limit the margin decline to 200-250 bps. Infosys is also expected to raise its full year guidance.

"We expect Infosys to guide for a 5-5.5% sequential revenue growth for Q2 FY12. We expect the EPS guidance for FY12 to be revised upward to around Rs130-131 from Rs126.05-128.21 earlier," says brokerage Sharekhan.

The growth this fiscal, however, is still expected to lag some of its peers. Credit Suisse expects Infosys' EPS (earnings per share) and revenue growth to be around 15% and 24% respectively, while smaller HCL Technologies , for instance, is expected to report 27% topline growth and 45% EPS growth for the full year.

"Change in FY12 guidance and assumptions, growth momentum in non-BFSI (banking and financial services), Europe and discretionary spend, pricing comments, supply-side pressures and impact on attrition/margins hereon," will be the key factors to watch out for according to ICICI Securities.

Rushil Decor to list shares on July 7

Rushil Decor , a manufacturer of decorative laminated sheets, has fixed July 7 as a listing date for its equity shares. It has fixed issue price at higher end of price band of Rs 63-72 a share for its initial public offering of 54 lakh equity shares (excluding promoters contribution of 2,43,750 shares).

Company raised Rs 40.64 crore (including promoters' contribution of Rs 1.75 crore) through the issue, which will be used for setting up of medium density fibre board plant and for working capital requirement.

The issue, which opened for subscription during June 20-23, was subscribed 2.62 times.

Retail and non-institutional investors helped the issue, with their subscription of 6.5 times and 1.35 times over reserved portion, respectively.

Birla Pacific Medspa to list on Thursday

Yash Birla Group Company Birla Pacific Medspa will be listing its equity shares on Thursday, July 7. It has fixed the issue price of the company at Rs 10 per share, the lower end of the price band.

The company raised Rs 65 crore through an IPO of 651.75 lakh equity shares. The issue, which opened for subscription during June 20-23, was subscribed 1.18 times.

Birla Pacific Medspa proposes to utilise Rs 49 crore for establishing 55 'Evolve' outlets, around Rs 6 crore for brand building and the balance for meeting working capital, Issue and other preliminary

Mukesh Ambani planning to sell RGTIL biz

Billionaire industrialist MukeshAmbani is looking to sell Reliance Gas Transportation Infrastructure business, which is into building pipelines to carry natural gas, said a media report.

The Wall Street Journal has reported that Mukesh Ambani, chairman of Reliance Industries, has contacted bankers to help him sell the business. "The process is at an early stage and a sale may not take place," the daily said.

Quoting two people familiar with the matter, the report noted that the privately-owned gas pipeline business, known as RGTIL for short, could be worth about USD 1 billion.

RGTIL has a gas pipeline from the landfall hub of Kakinada across the country to Gujarat on the east coast, with various connections along the way.

"RGTIL started developing the pipeline in 2005 and sold bonds in early 2009 to help finance the project, according to the offer document for the bonds," the report said.

BT to stay invested in Tech Mahindra

UK-based telecommunications player BT today said it will continue to hold stake in Indian IT firm Tech Mahindra for the time being.

"BT has a 24.4% shareholding in Tech Mahindra. Tech Mahindra remains a key supplier to BT and, while further sales may be considered in the future, BT expects to continue to have a shareholding in Tech Mahindra for some time," a BT spokesperson said.

There were speculations that BT may exit in view of likely merger of Mahindra Satyam and Tech Mahindra.

In November last year, BT had sold 5.5% stake in Tech Mahindra to the IT company’s parent firm Mahindra & Mahindra . Tech Mahindra was developed from a joint venture between the two companies in 1986.

M&M held 48.17% stake in Tech Mahindra, while BT held 23.46% and Mahindra BT Investment Company Mauritius Ltd held 0.05% stake as of March 31, 2011, according to data available on the Bombay Stock Exchange website.

BT, which has a significant presence in India, is also ramping up in the country. It has also set up a New Delhi Technology showcase centre, which was inaugurated today.

"India is a critical component to BT's success and vision and is a key location to a large number of global companies. Many of our customers are expanding into India and we are investing to extend our communications infrastructure and services to support their growth," BT Global Services Asia Pacific President Kevin Taylor said.

The new facility is part of BT's ongoing investment plan in Asia Pacific, he added.

BT has also announced creation more than 60 new critical roles in India as part of the previously announced Asia Pacific expansion plan. "The new jobs will be in sales enablement, delivery and implementation of services for customers. We expect to see a similar number next year as well," Taylor said.

The opening of BT's New Delhi showcase follows the launch of BT Showcases in Hong Kong in September 2010, Beijing in November 2010, Sydney in January 2011 and Singapore in March, 2011.

BT offers global services including voice, CRM and MPLS (multi-protocol label switching) to support corporate customers across sectors like finance, IT/ITeS, government and manufacturing.

It has a regional security operations centre (SOC) in Noida and a regional centre of Excellence in Pune, apart from offices in various cities in the country.

Check out: 8 stocks on brokerages' radar

UBS has maintained a "NEUTRAL" stance on Patni Computer , however, it has cut the target to Rs 380 from Rs 475. They believe that the benefits from the iGate and Patni integration are unlikely to have meaningful impact over the next few quarters. They expect the lower free float and the lack of clarity on delisting to continue to weigh heavily on the stock, limiting upside.

CLSA has maintained an "OUTPERFORM" rating on United Spirits with a target of Rs 1,125. With the consensus lowering FY13 estimates by 22% in the last 12-months it believes a large part of expectations adjustment is already over. CLSA expects over 30% earnings growth in Q1FY12 that would be the near-term trigger for the stock.

JPMorgan has maintained an "OVERWEIGHT" rating on MOIL with a target of Rs 450. This is despite its expectations that the company will report a soft first quarter given the price cut implemented over the last few months and tepid demand trends

Meanwhile, Goldman Sachs has a "SELL" rating on Nestle with a target of Rs 3,396. It feels that their store audits confirm high competition for shelf space with three majors like HUL, ITC and Nestle competing in the packaged foods categories, which remain a risk to margins. They believe current valuations price in volume growth and increasing margins, which we see as unlikely given high competition and input costs.

Citi has a "BUY" recommendation on DB Corp with a target price of Rs 305. The rising consumption in non-metro cities and the big mismatch in the share of ad revenues for regional papers would make the stock an interesting play

Credit Suisse is "NEUTRAL" on HDFC based on valuations with a target price of Rs 725. Improvement in market share, drop in costs and margin recovery are some of the key positives.

Nomura has reiterated a "BUY" on Crompton Greaves on account of positive surprises in their annual report. The target price is at Rs 325. Mitigation of concerns from overseas subsidiaries, margin recovery, pick-up in execution and order flow in domestic power systems are some of the key catalysts. They consider the stock to be the most attractive pick in the space.

Credit Suisse has retained "UNDERPERFORM" rating on Tata Steel and all Indian steel stocks under coverage due to sectoral concerns.

Exhausted bulls: Will Nifty manage to cross over 5750?

It was an uneventful session on back of lacklustre volumes. The market moved in a consolidation phase due to lack of any positive cues. Investors seem to be waiting patiently on the sidelines for the forthcoming events line up in this month.

Earnings season to be kicked started by IT bellweather Infosys on July 12 will probably set the ball rolling. Other major events in July are release of industrial output data, inflation and monetary policy review.

The Nifty trended closer to the 5600 support but closed at 5632 down 18 points. The Sensex shut shop at 18744 down 70 points.

Jai Bala, Chief Market Technician, Cashthechaos.com feels that bears have dropped the baton and market has actually stopped at the key resistance under 5,720-5,750 region. “Although the larger trend still looks lower, the pace of the rise from June 20 low is putting doubts on the bearish case but it is still a neutral market,” he explained.

You shouldn't miss this: Forefront Cap positive on auto sector, bets on Bajaj Auto

Krishna Kumar Karwa, Managing Director of Emkay Global Financial Services doesn't expect any positive surprises this earnings season. "Any further upmove in the market will be on the back of positive policy action from the government which will be the key driver.”

Gaurav Doshi of Morgan Stanley Private Wealth Management believes that the correction is warranted after the amazing upmove seen recently. "Going forward, the Nifty is likely to remain range-bound between 5500 and 5800 levels," he said.

Stock specifically, Technical Analyst, SP Tulsian is negative on RIL . According to him, there won’t be any newed interest on the stock from a delivery or from an investment point of view.

“I wouldn’t be surprised even if the share corrects to about Rs 800 to Rs 810 in this series where one can contemplate as a trading buy in the stock or maybe even by the long term investors as a fundamental buy at those levels,” Tulsian elaborates.

Rajesh Jain, Independent Market Strategist suggests getting into infrastructure stocks for a long term horizon of about 18 months.

Some of the top bets of Mehraboon Irani, Principal and Head- Pvt Client Group Business, Nirmal Bang Securities  are Hexaware , Rolta and NIIT Technologies . Irani explains that if IT companies post mute earnings, then midcap IT stocks may fall and that would emerge as entry points.

Nifty in tight range; SBI, SAIL, Reliance Cap top gainers

The benchmark Nifty was trading in a narrow range of 5615-5645 since the beginning of trade today. Market could be eyeing for events, which are lined up this month like earnings, GDP, inflation and RBI policy.

The 30-share BSE Sensex was trading at 18,763, down 51 points and the 50-share NSE Nifty fell 15 points to 5,635. Global markets were quiet in trade as US markets were shut yesterday.

Heavyweights Reliance Industries and BHEL were down over 2% & 3.5%, respectively. ITC, HUL, Bharti Airtel, TCS, Hindalco, DLF, NTPC, ICICI Bank and Reliance Communications too were putting pressure on the market.

However, SBI was the leading counter on Nifty, with rising 1.5%. Infosys, Wipro, HDFC Bank and L&T too were on buyers' radar. SAIL and Grasim were the top gainers, with gaining over 2%.

ICICI Bank, SBI, BF Utilities, Jubilant Foodworks, VIP Industries, Reliance Industries, BHEL and Tata Motors were most active shares on exchanges.

Midcaps like Cholamandalam rallied 12%. BF Utilities, Blue Dart, Wockhardt and Greaves Cotton gained 4-6.5%. However, UCO Bank, Shree Global, TTK Prestige, Shree Renuka and Prestige Estate lost 2.5-5%.

Smallcaps like Accentia Tech, Mahindra Forgings, Mastek, Electrotherm and Symphony jumped 8-13% whereas Warren Tea, Chromatic India, Cosmo Films, KPR Mill and Binny fell 5-13%.

ICICI Bank raises rates; home, auto loans to cost more

As the banking industry completed a year after the introduction of the benchmark lending rate or base rate today, the second largest lender ICICI Bank set the ball rolling for another round of interest rate hikes by effecting a 0.25 per cent rise in its base rate to 9.5 per cent.

The largest private sector lender also upped its retail lending rates by a similar quantum. While its new benchmark lending rate (fixed rate) will be 18.25 percent, the floating rate will be 15.25 per cent, the city-based lender said in a release.

With effect from July 1, the new interest rates will be applicable on new loans and advances, including consumer loans and home loans, bank said, adding however, the fixed rate customers will not be impacted by these increases.

The new base rate will be effective Monday next, while the new retail lending rates will be effective today itself, the bank said.

Since the introduction of the base rate system on July 1, 2010, the rate below which a bank cannot lend to anyone, leading banks have increased their base rates on an average of 200 bps. While the largest lender SBI is yet to take a call on the new round of rate hike, it is expected to revise its rates.

SBI has increased its base rate by 1.5 per cent since last July 1, the second largest private sector lender HDFC Bank and the third largest Axis Bank have already done so by 2 per cent, while ICICI's has done so by 1.75 per cent. However, the effective increase of ICICI is also 2 per cent as it had launched base rate 0.25 per cent higher than others at 7.75 percent.

ICICI Bank is the third bank to increase base rate since June 16, after the state-run Canara Bank, which had raised its base rate to 10.25 per cent on Wednesday, and the medium-sized Dena Bank that upped its base rate to 10.20 per cent on Friday.

While the Bangalore-based Canara Bank hiked its base rate by 0.25 per cent each to 10.25 percent effective July 1, and the benchmark lending rate by a similar amount to 14.50 per cent attributing it to rise in the cost of funds, the Mumbai-based Dena Bank also followed suit with its base rate being hiked to 10.20 per cent and benchmark lending rate to 15.25 per cent.

Since the Reserve Bank had raised its key policy rates 0.25 per cent at its mid-quarter policy review on June 16--the tenth increase since March 2010 during which it has upped the short-term lending and borrowing rates by a whopping 2.5 per cent to 7.5 and 6.5 percent respectively, to batten down inflation--many banks have hinted at upping their base rates.

Read more at: http://profit.ndtv.com/news/show/icici-bank-raises-rates-home-auto-loans-to-cost-more-162707?cp

How do loan-against-gold firms look now

Reacting to the  Reserve Bank of India's notification that loans given against jewellery as collateral would no longer be eligible for priority sector lending, shares of Manappuram General Finance & Leasing fell  6% to Rs 108 on Thursday. Investors feared the loan-against-gold-jewellery firm's cost of borrowing may rise and hurt profitability. Loans to priority sectors such as agriculture, education, low-cost housing, and those given to weaker sections of the society offer lower interest rates.

But Manappuram chairman and managing director VP Nandakumar says the RBI move will not have a significant impact on his company’s profitability. “Of our total loan book of around Rs 7000 crore, around Rs 3200 crore is funded through priority sector lending from banks,” Mr Nandakumar told moneycontrol.com. He said the cost of priority sector loans was 10.5%. The borrowing cost for this portion of the loan book would go up by 0.75%, he said. In addition, the company had the option to raise around Rs 1600 crore through commercial papers, which it would be able to do at 11%. So the net impact of higher borrowing costs on the loan book as a whole would be around 0.34%. 

Manappuram charges as much as 22-23% on the loans it issues against gold jewellery. The interest rate varies anywhere between 12% and 23%, depending on the quantum of the loan compared to the value of the gold jewellery pledged. So a person borrowing up to 80% — the highest limit—of the value of the jewellery will have to pay peak rates, compared to somebody who is borrowing just 40% of the value.

“But since these are mostly short term loans, most people borrow the maximum amount,” Mr Nandakumar. Banks are eager to lend to non-banking finance companies like Manappuram, which then issue loans to individuals against gold jewellery. This is because such loans are not only secured, but also yield good returns, and help banks meeting their priority sector lending target of 40% of the total loan book.a

Realty, IT, FMCG drag Nifty below 5500

The benchmark Sensex shed over 200 points in trade today despite quiet global cues at 14 hours. Technology, telecom, private banking, power, FMCG, auto (barring Tata Motors), healthcare and metal (except Tata Steel) dragged the Nifty below 5500 level.

The profit booking was pulling the markets lower as the Sensex rallied more than 400 points in previous two sessions. Market analyst, Sangeeta Purushottam said we could just remain in a range somewhere between 5000-5500-5600 levels for a few months. "We also have a time correction which begins to come in. We are going to see real recovery in the market only in the second half of the year, maybe, towards the end of the year," she said.

Heavyweight Reliance Industries tumbled 2% followed by TCS, NTPC, Infosys, ITC, L&T and ICICI Bank with loss of 2-3%. Among other largecaps, HDFC, Bharti and Wipro were down over 1%.

The 30-share BSE Sensex fell 209 points to 18,240 and the 50-share NSE Nifty dropped 62 points to 5,464. The Nifty February futures were in discount.

However, indices were witnessing some recovery as traders were buying at lower levels. Heavyweights ONGC SBI and BHEL too were quite supportive. Tata Motors, Bajaj Auto, Tata Steel, Reliance Power and Suzlon Energy were other gainers.

Tata Power, M&M, Kotak Mahindra Bank and NTPC were top losers with 2.5-3.5% loss.

In midcap space, Jain Irrigation, S Kumars Nationwide, Blue Star, Chambal Fertiliser and Rashtriya Chemical rallied 3-9% while SpiceJet, Nava Bharat Ventures, IVRCL Infrastructure, Man Infra and Money Matters slipped 4-10%.

In smallcap space, Brigade Enterprises, Manaksia and Zandu Realty shot up 15-17%. RSWM and Seshasayee Paper were up 8-10%.

However, Allied Digital plunged 20% as Income Tax department raided on company premises. Graviss Hosp, Jupiter Bioscience, Kabra Extrusion and Asian Star were down 7-13%.

Q3 attrition down by 2%; see further decline: Wipro

Wipro surprised markets with the resignations of the joint-CEOs of its information technology business, after reporting profit growth rates which lagged rivals Infosys Technologies and Tata Consultancy Services.

India's third-largest software services exporter said company veteran TK Kurien was taking over as the new chief executive of the unit.

The company's net profit for the third quarter of fiscal year 2011 grew 3.4% on quarter-on-quarter basis. The number stood at Rs 1,319 crore as against Rs 1,276 crore reported last quarter. Its consolidated revenues too went up to Rs 7,829 crore from Rs 7,731 crore and dollar denominated global IT revenues rose 5.6% to USD 1.34 billion (QoQ).

Commenting on the company's performance, the newly appointed CEO of the IT business TK Kurien along with the company’s executive director and chief financial officer Suresh Senapaty, and HR head Pratik Kumar, said they expected growth to return in 2011.

"With the environment for the IT sector looking positive, we are confident of growth despite tepid volumes in the previous quarter," the management said, adding that the attrition rate for the quarter was down by 2%, and it saw further decline there.

On the move to have one CEO for the IT unit, the management said the structure of a single CEO was more appropriate for coming years.

Nifty consolidates; ADAG stocks top gainers

The 50-share NSE Nifty has consistently been volatile in trade today due to two-way move. On one side, heavyweights like Reliance Industries, SBI and ICICI Bank, ahead of their numbers, were helping the markets. BHEL after its strong numbers, NTPC, M&M and Bajaj Auto along with Anil Dhirubhai Ambani Group companies' shares too followed the same trend.

However, selling continued in ONGC, Wipro, Infosys, Bharti Airtel, HDFC and HDFC Bank along with metal, cement, healthcare, realty and FMCG companies' shares.

At this point in time, Arjun Divecha of GMO said they are heavily underweight both India and China in their emerging markets strategy. This is primarily due to high valuations in both countries relative to other emerging markets, he says. "In addition, central banks in both countries appear to be behind the curve and they will have to act strongly to bring inflation down."

The Sensex was trading at 18,999, down 47 points and the Nifty fell 15 points to 5,696.

Among frontliners, Wipro was trading at Rs 456.35, down 4.53% (after quarterly numbers), ONGC was at Rs 1,108.35, down 2.27% (Oil spill reported from ONGC`s fields off Mumbai coast); Sterlite Industries was at Rs 177.40, down 1.74%; DLF was at Rs 252, down 1.7%; ITC was at Rs 168.95, down 1.63% (after quarterly numbers); HCL Tech was at Rs 499.50, down 2.22% and ACC was at Rs 995.05, down 2.14%.

However, Reliance Infrastructure, Reliance Communications, SBI, Reliance Industries, BHEL, Reliance Power and Sesa Goa gained 1.3-2.9%.

In midcap space, Motilal Oswal rallied 12%. Cholamandalam, HMT, BOC India and Peninsula Land gained 4.5-5% while Financial Tech, Persistent, KGN Industries, Kirloskar Brothers and Polaris slipped 3.8-6%.

In smallcap space, Valecha Engg, Lloyds Metals, Hanung Toys, Hyderabad Inds and Splash Media rallied 8-17% whereas Rossell Tea, SML Isuzu, Spectacle Info, Prabhav Indust and Centrum Finance lost 4.6-5%.

TVS Motor Q3 net profit up 137% at Rs 55.7 cr

TVS Motor has announced its third quarter results. The company’s Q3 net profit was up 137% at Rs 55.7 crore versus Rs 23.5 crore, year-on-year, YoY.

Its net sales were up 50.19% at Rs 1,613 crore versus Rs 1,072.6 crore, YoY.

n a press conference, TVS Motor said:
-2 -Wheeler sales volume up 39%
-3-Wheeler sales crossed 10,000 units for the 1st time
-Topline growth continues to be good
-Should be able to protect margins
-Commodity prices to soften in next fiscal
-Expect CAGR of 14-15% over next 2-3 years
-Will launch two new variants of Apache & Scooty
-Very positive response for 3-wheelers
-3-Wheeler export sales to outpace domestic sales in 1 year
-Supply chain effectiveness improving

The company's trailing 12-month (TTM) EPS was at Rs 2.93 per share. (Sep, 2010). The stock's price-to-earnings (P/E) ratio was 21.71. The latest book value of the company is Rs 18.22 per share.

At current value, the price-to-book value of the company was 3.49. The dividend yield of the company was 1.89%.

Food inflation eases, but RBI action seen

Food inflation eased for the second straight week in January, tracking lower fruit and vegetable prices, but accelerating headline inflation in December is likely to put pressure on the Reserve Bank to raise rates at policy review on January 25.

India's food inflation quickened to a one-year high late last month as unseasonal rains spoilt summer harvest of perishable vegetables like onions, potatoes and tomatoes in several key producing states.

ndia's food price index rose 15.52% and the fuel price index climbed 11.53% in the year to January 8, government data on Thursday showed.

In the prior week, annual food and fuel inflation stood at 16.91% and 11.53%. The primary articles price index was up 17.03% in the latest week, compared with an annual rise of 17.58% a week earlier.

Analysts expect food prices to moderate by February, but they would still remain high.

"The build-up of food inflation will take two months to dissipate. So, it will moderate in January and February and we expect food inflation at 10% to 12% by March," said Abheek Barua, chief economist at HDFC Bank.

"I expect the RBI (Reserve Bank of India) to continue to be hawkish and continue with its rate hikes as non-food primary product inflation is sticky and can have pass through effect into wages and general prices," Barua said.

The wholesale price index, the most widely watched gauge of prices in India, rose 8.43% in December from a year earlier, compared with 7.48% in November, reflecting that food inflation has fed into the broader economy.

While monetary measures are largely ineffective in tackling supply-led problems like food inflation, the RBI is widely expected to raise policy rates by 25 basis points in its January 25 policy review to rein in inflationary expectations and dampen overall demand.

India's 5-year swap rate was down 2 basis points to 8% on a knee-jerk reaction after weekly food inflation eased, but rose back to previous levels as rate hike concerns and a hawkish policy stance weighed.

This week, the RBI governor Duvvuri Subbarao said that the central bank is 'desperate' to control inflation, in a sign which is being widely read as indicative of further monetary tightening.

Finance Minister Pranab Mukherjee met state finance ministers on Wednesday and said local factors are widening the gap between wholesale and retail prices.

Mukherjee said the federal government has taken measures to facilitate imports and restrict exports where needed, but urged state governments to review local levies and state level marketing regulations which add to food prices.

Bharti Airtel foresees super success on MNP platform

Mobile number portability (MNP)—a move that is expected to further intensify competition in the already crowded mobile services market. With the implementation of MNP, subscribers would get a wider choice and would be able to switch between service providers easily, thus compelling service providers to offer competitive pricing plans and offer higher service quality to attract and retain subscribers.

Calling today a historic day for the industry, number one telecom company (by market cap) Bharti Airtel's CEO Sanjay Kapoor said that the data indicated that bigger operators would get bigger after number portability. "And, we are a product of competition; customers believe in our strategy."

Nifty ends with moderate gains; financials, IT rise

Equity benchmarks closed with moderate gains after showing a smart recovery in the last couple of hours of trade on Thursday. Technology, financial and select power companies' shares led the recovery and pulled the Nifty up above the 5700 mark as well as the Sensex above the 19000 level. Indices had slipped close to 1% in the first half of trade today due to weak global cues.

Cabinet reshuffle and mobile number portability rollout did not have much impact on markets. Overall, indices were extremely volatile in trade. Naresh Kothari president of Edelweiss Capital expects this trend to continue in the first half of this calendar year.

Deven Choksey of KR Choksey Securities feels that the Nifty is likely to be in a range between 5700-5900 as earnings are largely inline with estimates. "Traders need to be cautious," he said.

However, the sell-off in oil & gas and select metal companies' shares along with ITC, Bharti, Bajaj Auto, Maruti and BHEL capped gains in late trade.

The 30-share BSE Sensex closed at 19,046.54, up 68.22 points or 0.36% and the 50-share NSE Nifty rose 20.55 points or 0.36% to settle at 5,711.60. Broader indices were quiet in trade today.

Rangarajan sees inflation at 6-6.5% by March

There is room for monetary action on the inflation front according to Prime Minister's Economic Advisory Council Chairman C Rangarajan. He expects WPI inflation to be between 6-6.5% by the end of March. "Inflation above 4% is uncomfortable and if it remains sticky, RBI steps may be needed. We may see action from the Reserve Bank by mid-January if inflation is firm," he says adding that the quantum of any rate hike depends on inflation.

Further he states that the government should guard against food inflation spreading to other sectors. He also alarms the spill over of untamed primary article inflation as well. "Price stability has to become the dominant issue for monetary policy in India," Rangarajan adds.

Food inflation accelerated to above 14% in mid-December on the back of high onion and vegetable prices and annual headline inflation, currently at 7.48% in November, could accelerate further in December.

Talking about fiscal deficit, which has been a matter of grave concern, Rangarajan says he sees the government meeting its fiscal 2011 aim. "There is no need for extra borrowings this fiscal. We also expect the liquidity situation to improve this quarter," he points out.

Commenting on the talks about government deregulating diesel prices, he says it may do so when inflation eases.

Nifty ends below 6100; Bank, Realty, Auto indices dip 2%

Equity benchmarks saw a profit taking on Wednesday on the back of sell-off in financial, auto, metal, realty, telecom and capital goods companies' shares. The benchmark Nifty slipped below 6100-mark in second half of trade, especially after a fall in global markets.

Experts feel that markets are riding low and all eyes are on the third quarter earnings that will kick-start next week. Sandeep J Shah of Sampriti Capital said that the upside maybe 6,200-6,400 but it will not ride away at that level. He is also concerned on the foreign institutional investor (FII) inflows to India.

“Insurance companies inflows are very muted, domestic mutual funds redemptions continue, some of the HNI’s and retail, at least a part of them have perhaps left the market because of the corruption, the scams that have been unearthed,” he explained.

European markets - France's CAC and Germany's DAX were down 1% each; FTSE fell just 0.2%, at the time of closing Indian equities. Even US index futures like Dow Jones and Nasdaq declined 0.5% each. Shanghai fell 0.5% and Taiwan tanked 1.7%.

Jim Walker, MD of Asianomics said that Europe is a bigger problem than China and US. “Europe is going to see political turmoil,” he explained.

According to him, the US economy may see weakness in the next six months. Expressing concern, Walker stressed that there might be monetary tightening across Asia. He believes that the Reserve Bank of India (RBI) is likely to hike interest by 25 bps this month.

Rate sensitives and commodities dragged the markets lower today. The BSE Bank, Realty and Auto indices lost 2% each; Capital Goods Index fell 1.6%. However, TCS, ITC, HUL, HCL Tech, Sesa Goa, Tata Power, Hindalco, Dr Reddy's Labs and Wipro were the only gainers.

The 30-share BSE Sensex closed at 20,301.10, down 197.62 points or 0.96% and the 50-share NSE Nifty fell 66.55 points or 1.08% to settle at 6079.80. The broader indices too slipped one percent each.

In financial space, ICICI Bank, IDFC and HDFC fell 3% each; SBI, HDFC Bank, Axis Bank and Kotak Mahindra Bank were down 1.5-2.75%. PNB lost 1.25%. DLF from realty pack tumbled 3.36%.

Bajaj Auto from auto space plunged 3.87% as one international research firm downgraded the stock to underperform from outperform. Hero Honda tanked 3.8%; M&M, Maruti Suzuki and Tata Motors fell 1% each.

L&T and BHEL from capital goods segment went down 2.4% & 1.1%, respectively. Heavyweights Bharti Airtel and ONGC were down 2% & 1.6%. Even Reliance Industries was just in red.

Anil Dhirubhai Ambani Group companies' shares like Reliance Infrastructure, Reliance Capital and Reliance Communications cracked 2.6-3% while Reliance Power rose 0.57%. ITC and HUL from FMCG space were up 1.3-1.5%.

In metal space, SAIL, Sterlite Industries and Tata Steel were down 1.5-2% whereas Hindalco and Sesa Goa gained 1-1.9%. Infosys from technology pack lost 0.6% while TCS was up 1.24% and HCL Tech up 2.4%. Wipro gained just 0.2%.

In midcap space, Jindal Saw, KGN Industries, Jain Irrigation, Gujarat Flourochem and Shriram City gained 3-7% while Rashtriya Chemical, Sadbhav Engg, Anant Raj Industries, GSFC and Apollo Tyres lost 4.75-5.5%.

In smallcap space, Fame India shot up 19.69% as Reliance Mediaworks increased stake to 44% in company. Indo Tech Transformers jumped 17%. Transformers & Rectifiers, Camlin and INOX Leisure rose 6.8-11.7%.

However, Mandhana Industries, Splash Media, Sagar Cement, SE Investments and Hinduja Foundries declined 5.7-8%.

Breadth was in favour of declines; about 1028 shares advanced as against 1953 shares declined on Bombay Stock Exchange.

Total traded turnover on exchanges stood at Rs 1,13,705.1 crore. This included Rs 13,072.32 crore from NSE cash segment, Rs 96,562.35 crore from NSE F&O and the rest of Rs 4,070.43 crore from BSE cash segment.

Global cues drag Nifty below 6100; banks, cap goods dip

The benchmark Sensex shed around 200 points in afternoon trade while the Nifty was trading well below the 6100 level, led by further sell-off in financial, capital goods, realty, metal and auto companies' shares along with heavyweights ONGC (tanked 2%) and Infosys (down 0.8%). Reliance Industries too slipped into red.

Weak European cues weighed on markets; France's CAC, Germany's DAX and Britain's FTSE were down 0.5-1%. Even Dow Jones and Nasdaq futures declined 0.5% each.

Jim Walker, MD of  Asianomics said that Europe is a bigger problem than China and US. “Europe is going to see political turmoil,” he explained.

According to him, the US economy may see weakness in the next six months. Expressing concern, Walker stressed that there might be monetary tightening across Asia. He believes that the Reserve Bank of India (RBI) is likely to hike interest by 25 bps this month.

However, buying continued in ITC, TCS, Sun Pharma, Hindalco, HCL Tech, Tata Power, Wipro, GAIL, Reliance Power and Dr Reddy's Labs.

The 30-share BSE Sensex was trading at 20,253, with loss of 245 points and the 50-share NSE Nifty lost 80 points to 6,066. The broader indices too fell 1% each. However, the Nifty January futures were trading at 25 points premium.

In financial space, ICICI Bank and HDFC tanked 3.5% each. Axis Bank, HDFC Bank, SBI, PNB and Kotak Mahindra Bank were down 1.7-3%. DLF from realty pack fell 3%.

Bharti Airtel and Reliance Communications from telecom space slipped 2.2-2.7%. L&T and BHEL from capital goods segment were down 2.6% & 1.5%, respectively.

Bajaj Auto from auto pack lost 3%; Hero Honda, Tata Motors, M&M and Maruti Suzuki declined 0.7-2.7%. Sterlite Industries, Tata Steel and SAIL from metal space slipped 1.9% each.

In midcap space, Jindal Saw, KGN Industries, Shriram City, Eicher Motors and Bayer Cropscience were up 1.9-5.4% while Anant Raj Industries, GSFC, Syndicate Bank, Stride Arcolab and Amtek Auto fell 4-5.4%.

In smallcap space, Fame India shot up 18% as Reliance Mediaworks increased stake to 44% in company. Indo Tech Transformers rallied 17%. Transformers & Rectifiers, Navin Fluorine and DQ Entertain gained 6-9%.

However, Mandhana Industries, Sahara One, Splash Media, Shasun Chemical and SE Investments slipped 5-6%.

About 895 shares advanced as against 1993 shares declined on Bombay Stock Exchange.

Reliance MediaWorks hikes stake to 44% in Fame India

Anil Ambani-promoted Reliance MediaWorks has acquired 32% of Emerging Equity in Fame India via open offer, reports CNBC-TV18's Tanvi Shukla quoting sources. Earlier Reliance Media held 12% of Emerging Equity in Fame India.

It has been a tough fight between Inox and Reliance MediaWorks to acquire Fame India. Post, market regulator SEBI’s clearance to both the open offers i.e. Inox and Reliance MediaWorks for Fame India, the latter is learnt to have pocketed the stake.

It is learnt that Reliance made an open offer to acquire 53.8% stake in Fame India with an open offer price of Rs 83.40 per share.  Rival Inox holds 50.2% stake in the multiplex company.

The takeover battle for Fame began in February when Reliance MediaWorks launched a hostile bid. It accused Fame of rejecting its higher offer price in favour of Inox and petitioned SEBI that the deal was against the “protection of the interest of minority retail shareholders.”

Nifty volatile; ICICI Bk, Bajaj Auto, Axis Bk, HDFC down

The Nifty was hovering around 6100 mark with negative bias. It was a weak session for the markets on back of heavy selling in banks. Selling was also seen in capital goods, realty and auto stocks. Buying was seen in FMCG and IT stocks. The broader markets too were trading weak. BSE Midcap and Smallcap indices were down 0.5% each.

The Sensex was down 94.33 points or 0.46% at 20404.39, and the Nifty was down 36.75 points or 0.60% at 6109.60. About 1152 shares advanced, 1634 shares declined, and 392 shares remain unchanged.

In the largecap space, HCL Tech, Sun Pharma, Hindalco, TCS and Tata Power were up 1.4-2.7%. On the losing side, ICICI Bank, Bajaj Auto, Axis Bank, HDFC and Kotak Mahindra Bank were down 2-3%.

Index heavyweight Reliance was trading at Rs 1,083.05 up 0.6% from its previous close of Rs 1,076.55. Refinery major HPCL was trading at Rs 391.80 down 0.11% from its previous close of Rs 392.25.

Hindustan Lever was trading at Rs 321.90 up 0.26% from its previous close of Rs 321.05. Cigarette major ITC was trading at Rs 179.95 up 1.41% from its previous close of Rs 177.45.

Top gainers on the BSE Midcap: Jindal Saw, KGN Industries, EID Parry, Glodyne Techno and Hindustan Constructions were up 3-7%.

Top losers on the BSE Midcap: Anant Raj Industries, IBN18 Broadcast, Amtek Auto, Allahabad Bank and Syndicate Bank were down 3.5-5%.

Top gainers on the BSE Smallcap: Fame India, Transformers, Indo Tech Transformers, Jamna Auto and Welspun India were up 6-14%.

Top losers on the BSE Smallcap: Rollatainers, Spectacle Info, Sujana Towers, Urja Global and SVC Resources were down 4.8-5%.

Lokmat Media plans IPO to fund expansion

One of India's leading print media businesses Lokmat Media has proposed to tap the capital market for funding its expansion plan. It has filed draft red herring prospectus (DRHP) with the SEBI for public issue of 13,829,064 equity shares.

It publishes three newspapers: Lokmat in Marathi, Lokmat Samachar in Hindi and Lokmat Times in English which collectively have 17 editions and 58 sub-editions.


Lokmat Media's flagship newspaper Lokmat has been the leading Marathi newspaper in terms of average daily circulation and average daily readership in Maharashtra in 2008, 2009 and for the six month period ended June 30, 2010 (Source: ABC January-June and July-December, 2008 and 2009 and January-June, 2010 and IRS 2008 R2, IRS 2009 R2 and IRS 2010 Q3) and in terms of average daily circulation in Goa in 2009 and for the six month period ended June 30, 2010 (Source: ABC, July-December 2009 and January-June 2010).

It has also into broadcasting business, which is conducted through a 50-50 joint venture with ibn18 Broadcast Limited. The joint venture company, IBN-Lokmat News Private Limited (IBNL), operates IBN-Lokmat, a 24-hour Marathi news and current affairs television channel which went on air on April 6, 2008. It also recently entered the film production and distribution business and in August 2010, released debut film in Marathi, entitled Jetaa, in association with Ramesh Deo Production Private Limited.

Promoters Mr Vijay Darda and Mr Rajendra Darda hold 54.75% stake in company and other family members hold 45.25% stake, which will be reduced to 41.07% & 33.93% post issue.

Company intends to use net issue proceeds of Rs 368.6 crore for upgrading existing printing facilities (Rs 150.36); building capability for expansion to new markets (Rs 90 crore); brand building, promotion and marketing (Rs 30 crore); pre-payment and repayment of loans (Rs 48.23 crore; acquiring and co-producing Indian films, including primarily Marathi language films as well as certain Hindi language films (Rs 25 crore); and investment in IBNL (Rs 25 crore).

For the year ended May 31, 2010, Lokmat Media reported a net profit of Rs 49.5 crore on total income of Rs 391.21 crore.

Book running leading managers to the issue are Kotak Mahindra Capital Company Limited and Enam Securities Private Limited.

Nifty in narrow range; RIL, ITC, NTPC, HUL, Infy, Cairn up

Equity benchmarks were consolidating at around yesterday's closing values after seeing rally in previous four sessions. The Nifty was trading in a narrow range of 6125-6160, with a negative bias. Financial, telecom, capital goods, realty and auto companies' shares were on sellers' radar along with Hindalco, ONGC, TCS and Tata Steel.

The 30-share BSE Sensex was trading at 20,499, with loss of 61 points and the 50-share NSE Nifty declined 15 points to 6,142.

Experts are bullish on Indian markets, even though the year kick-started with tepid volumes and just about a modest price appreciation. Kalpana Morparia, CEO, JP Morgan is expecting the Sensex to be at 24,000 by the year-end.

She said, “We certainly believe that we are in for a 20% increase. If you then factor in a slight appreciation in the rupee, we would probably see returns for foreign investors in excess of 20%.”

Financial space was witnessing selling pressure today, especially after HDFC Bank raised its interest rates on retail term deposits by up to 1.25% depending on the maturities. The rate hike will be effective January 1. However, this will squeeze margins of banks. Even Bank of India also revised deposit rates in some maturities, effective from January 03, 2011.

HDFC Bank fell 1.5%; India's largest banks - SBI and ICICI Bank lost 2.5-3.2%. Axis Bank was down 1.2% and IDFC down 1.6%.

Telecom players like Bharti Airtel was down 1.3% and Reliance Communications down 1.9%. L&T and BHEL from capital good space declined 0.5-0.7%.

In auto space, Bajaj Auto tanked 3%. Tata Motors, Maruti, M&M and Hero Honda were down 0.25-1%. DLF from realty space fell 0.9%.

However, buying continued in power and FMCG companies' shares along with Reliance Industries, Infosys, JSPL, Wipro, Sterlite, Dr Reddy's Labs, Ranbaxy Labs and HDFC, which capped losses.

In midcap space, Kirloskar Brothers shot up 12.3%. Kwality Dairy, Peninsula Land, Zydus Wellness and Bombay Rayon gained 4.5-7.6% while Dewan Housing, KGN Industries, IndusInd Bank, Central Bank and Allahabad Bank fell 3-4%.

In smallcap space, Mandhana Industries and Varun Industries surged 17% each. Shasun Chemical, Infinite Comp and Advanta gained 8% each. However, Timken, Ganesh Housing, Midfield Industries, Sujana Towers and Spectacle Info slipped 5-5.7%.

About 1362 shares advanced as against 1374 shares declined on Bombay Stock Exchange.

Spain's Gamesa may buy majority stake in Suzlon: Sources

Spain's top wind turbine manufacturer Gamesa is likely to pick up majority stake in Suzlon, reports CNBC-TV18 quoting sources.

It is learnt that the deal is likely to value Suzlon at market cap of around USD 3 billion while its current market cap is at around USD 2 billion.

Sources add that the deal will involve payment of non-compete fee to promoters. However, Suzlon has refused to comment stating that it is a market speculation.

Following the report, Suzlon rose more than 5% on the bourses.

Conceived in 1995 with just 20 people, Suzlon is a leading wind power company with over 16,000 people in 25 countries across Americas, Asia, Australia and Europe.

Sensex likely to be at 24K by year-end: JP Morgan

Experts are bullish on Indian markets, even though the year kick-started with tepid volumes and just about a modest price appreciation. Kalpana Morparia, CEO, JP Morgan is expecting the Sensex to be at 24,000 by the year-end.

In an interview to CNBC-TV18, she said, “We certainly believe that we are in for a 20% increase. If you then factor in a slight appreciation in the rupee, we would probably see returns for foreign investors in excess of 20%.”