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Power stocks fail to take cues from the (The Hindu Business Line 29th Feb 2008)Market on Thursday did not take a cue from the Economic Survey’s observation that the country’s electricity generation was less than the target of 710 billion KW hours during 2007-08. “In absolute terms, total energy deficit during the period was pegged at 45,601 million units,” it said. Is it a challenge or an opportunity for the listed power stocks in the months ahead? “Obviously, this is an opportunity for the power companies and not unknown to the market. But it did not react to the generalities and was waiting for specific cues from the Budget tomorrow,” said Mr Sudip Bandopadhyay, CEO of Reliance Money. “But the fact that the Survey has taken note of it is heartening. The PPP model has been working well for some time now. Reliance Power, which has obtained largest mandate even as a newcomer, is an example of things that may follow. The interesting trend is that the private players are seriously looking...

UP-based sugar stocks fall on court (The Hindu Business Line 27th Feb 2008)An interim order by the Supreme Court on Wednesday that sugar mills in Uttar Pradesh pay growers Rs 115-123 a quintal led to a fall in shares of companies based in the Northern State. Shares of companies took a beating due to this. “Bajaj Hindustan Ltd was the worst hit due to the order. The company will now have to go through a lot of financial restatements now, which will lead to major losses for the company,” said an analyst with a brokerage. The fall in stock prices came even as sugar prices touched a 15-month high in the global market. Indian sugar is seen as holding the key to global market prices since higher exports from the country could have a cooling effect. Bajaj Hindustan slipped sharply by 8.56 per cent, touching an intra-day high of Rs 232.75 before closing the day at Rs 234.95. Other stocks affected include Andhra Sugars down 1.30 per cent; Dhampur Sugar Kashipur fell 2.28 per cent; Dwarikesh Su...

Top IT counters make recovery (The Hindu Business Line 26th Feb 2008)IT stocks were up today on a relief rally. HCL Infosystems gained over 5 per cent. HCL Tech went up around 4 per cent. Wipro was up more than 4 per cent. Infosys moved up by 2.11 per cent. Satyam Computer gained 2.62 per cent. TCS and MphasiS finished marginally up. In the past one week, top IT counters made some recovery, but the strength still amiss. “The top companies are not under-owned and re-rating exercise yet not visible,” felt Mr Arun Kejriwal of KRIS. Mr Gul Teckchandani, an equity strategist, felt that with a relatively stable rupee against dollar now, and prospect of revenue growth of 30 per cent during the calendar year, the low debt IT blue chips are surely opportunities. Last year, the rupee had a sharp upward movement of 12.3 per cent against dollar. This year so far, it has been flattish. In the immediate term, a sudden and sharp appreciation in the rupee is also least apprehended in the currency mark...

Auto components industry reels under steel price (The Hindu Business Line 22th Feb 2008)Although all the industries that consume steel will be affected in varying degrees by the recent round of hikes in prices of steel, the auto components sector is likely to be among the worst hit. This is because the sector is being hit on multiple fronts at the same time. Its margins on exports are under pressure due to the rising rupee (though, the let up in the appreciation seen in the last few days might be of some help). Two major segments of the automotive industry are in a bear hug — commercial vehicles and two wheelers. There is a growing threat of competition from China. And now, the increase in cost of steel. The increase in costs will wipe out the auto components industry, fears Mr Vidyashankar Krishnan, President, Indian Forgings Association and Managing Director, M M Forgings Ltd. He disagrees that the hike in steel prices is necessitated by increase in input costs for the steel industry...

Public sector banks fare better on bourses (Live mint.com 20th Feb 2008)Public sector banks that account for close to 70% of the Indian banking industry seem to be insulated from the recent market turmoil. The 30-share Sensex of the Bombay Stock Exchange (BSE) lost 5.08% in the last one month, between 18 January and 18 February, but the public sector banks were relatively less affected, losing only 2.19% during the same period. In comparison, the stocks of Indian private sector banks lost more than 7%. In fact, public sector banks have consistently outperformed their private sector counterparts over the past year, gaining more than 75% between February 2007 up to now. During this time, private sector banks have gained 48.36%, while the Sensex rose 25.31% and the BSE Bankex, an index of 18 listed banks, rose more than 50% in this period. Among the public sector banks, State Bank of India (SBI) and Bank of India (BoI) have gained more than 100% in the past one year. Three other large ban...

Stay in Tata Steel, SAIL, JSW Steel (Source : CNBC-TV18, Moneycontrol.com 15th Feb 2008)One would be disappointed if one were a steel investor because there is enough turbulence going on in the world right now for these metal stocks. And now the modest price hike which they take after a longtime too that gets rolled back by half. I think one would sulk a bit if one were a steel stock investor because there is genuine pressure on raw materials, there is no denying that. If we just look across the world and what’s happened with steel raw materials, it’s just being going up and this is bad news - this rollback for steel company margins. I mean if we just look at their performance in the previous quarter there was nothing to write home about. The margins were under pressure, they expected to be under pressure and they could have only offset it by raising prices and now the half of that is being rolled back. So my sense is that the operating margins of many of these steel stocks will conti...

IT stocks lead 523-point fall (Business Standard 6th Feb 2008) A steep decline in the information technology (IT) stocks due to contraction in the US services sector yet again dragged Indian stock prices as investors judged recession in the world’s biggest economy will trigger big cuts in IT spend, affecting revenues of companies such as Infosys, TCS and Wipro. Top IT stocks, which had run-up by over 20 per cent during the past two weeks, shed 5 to 6 per cent on Wednesday thereby becoming top losers among the 30 Sensex shares. While the Bombay Stock Exchange (BSE) Sensex declined by 2.81 per cent (523 points) to close at 18,139, the broader S&P CNX Nifty of the National Stock Exchange (NSE) shed 2.94 per cent (161 points) to settle at 5,322. Satyam Computers was down 6.74 per cent at Rs 408.65, Wipro Ltd fell 6.45 per cent at Rs 425, Infosys Technologies declined 6.25 per cent at Rs 1,510.60 and TCS Ltd dipped 5.15 per cent at Rs 900.55. The IT index on BSE was down 5.59 per cent....

US slowdown: smaller IT firms more vulnerable than large peers (Live mint.com 28th Jan 2008) Even as India’s top 5 software service vendors such as Tata Consultancy Services Ltd (TCS) and Infosys Technologies Ltd say they don’t see a slowdown in demand for their services from buyers in the US, it is becoming clear that smaller vendors could see orders slipping if information technology (IT) spending by such clients is tightened in the event of a recession in the world’s biggest economy. TCS, Infosys and their peers Wipro Ltd, Satyam Computer Services Ltd and HCL Technologies Ltd have said the credit crisis in the financial sector in the US, the segment from where the bulk of revenues come for Indian software vendors, had not impacted their revenues in the latest quarter. The October-December earnings for the top 5 firms have been in line with analyst estimates and vendors maintained their operating margins through improved billing rates, higher offshore leverage, a shift towards fixed...

Textile, apparel export declining: RBI study (Live mint.com 21th Jan 2008)The country’s total exports may be rising at around 20% but overseas sales of textile, apparel and handicrafts have declined during the first five months of this financial year, according to Reserve Bank data. “Exports of textile and textile products and handicrafts continued to register a declining trend,” RBI said in a study on India’s foreign trade 2007-08. There was a 3% decline in apparel and 16% fall in silk textile export in dollar terms, it said. Export of textile and products declined due to reduced off-take by major markets such as US, UK and Italy. The country’s exports to the US in April-October declined to 3.25 in value terms as compared to 6.8% in the corresponding period last year, while in quantity terms exports recorded a 1.9% growth, according to the US Department of Commerce, Office of Textiles and Apparel. The Prime Minister’s Economic Advisory has also pointed out that “absolute declines in ...

Mid- and small-cap banks gaining market interest (The Hindu Business Line 18th Jan 2008) Banking stocks in the mid- and small-cap space have outperformed the Bombay Stock Exchange’s Sensex in the last one month. However, in the last few days, select mid- and small-cap banking stocks have been witnessing selling pressure. Market men attribute this to weak international cues and FIIs selling. However, they said these stocks have tremendous growth potential from the long-term perspective. Some of the stocks that were in the red on Thursday include: Centurion Bank of Punjab (1.75 per cent), Federal Bank (1.55 per cent) and Andhra Bank (0.44 per cent). Axis Bank, Bank of Baroda and Canara Bank also saw a dip in their share values. More

Why Power IPOs are exciting investors? (The Economic Times 18th Jan 2008) Investor response has been at lightning speed to the initial public offering (IPO) of Reliance Power Ltd—the Rs 11,700 crore issue, the largest thus far in the annals of the Indian capital market, was oversubscribed in a matter of seconds. Several other corporates with a presence in power, including Vedanta, Ispat and Essar, have reportedly lined up IPOs too. In fact, the monies to be raised via power IPOs in the offing, add up to more than the entire amount tapped in the primary market last year. Does the seeming investor frenzy point at welcome changes on the ground in the vexed, state-dominated power sector which remains mired in runaway losses and routine revenue leakage? More

Big balloon for small-cap stocks (The Hindu Business Line 11th Jan 2008)Bubble in the small-cap stocks have been deflated somewhat this week, but analysts feel froths are still dominating the space. The BSE Small Cap index corrected by around 7.5 per cent in the last one week, but there are hundreds of stocks beyond the index, which are yet to correct.Gloomy picture According to Thursday’s circuit summary on the BSE, 947 stocks hit the lower circuit filter against the 129 stocks that hit the upper ceiling. Advance/decline ratio also painted a gloomy picture as 87.3 per cent of the total traded stocks on the BSE (2,912 stocks traded), ended in red against just 12 per cent (or 351 stocks) which closed the day in the green. More

Sugar stocks gain on low production estimates (The Hindu Business Line 10th Jan 2008)Sugar stocks are moving up in full steam due to low production estimates for the year. According to a recent report by Kotak Commodities Services Ltd, delay in crushing activity in Maharashtra and Uttar Pradesh has also forced a revision in overall sugar production numbers. “This delay seems to have taken away almost half million tonne of production of sugar as of now. There were estimates of our country producing close to 30 million tonnes (MT) but now due to the delay we could see a much lesser amount of sugar being produced,” said an analyst. More

Small & mid-cap stocks lose steam (The Hindu Business Line 9th Jan 2008)Small- and mid-cap stocks, till now the darlings of market men, have lost steam at the bourses since the dawn of New Year. The BSE Sensex, which climbed the 21-K mark for the first time in its history today, has posted a return of 2.6 per cent since January 1, while the NSE’s S&P CNX Nifty and the BSE-500 indices have generated a return of 2.4 per cent. In comparison, the BSE Small-Cap index gave out a return of 0.48 per cent and the BSE Mid-cap is marginally in the negative.Circuit summary Tuesday’s circuit summary clearly captured the change in the mood of investors. About 800 stocks, 797 stocks to be precise, have hit lower circuit filter on the BSE, against 255 stocks that hit the upper circuit on Tuesday. Total traded stocks on the BSE on Tuesday were 2,928. The data is a contrast when compared to the statistics a few days ago, when the number of stocks hitting the upper circuit has been consistently i...

Price-cut talk weakens cement cos (The Hindu Business Line 9th Jan 2008)Cement stocks have been witnessing steep fall in the last few days. According to market participants, following the Tamil Nadu Government’s warning last week that if the private cement factories did not bring down the prices, it would have no option but to take over their management, cement stocks, not only of Tamil Nadu companies but also from other regions, have been under selling pressure. Cement manufacturers in Tamil Nadu also met the Chief Minister and informed him that they would take a positive decision on reducing cement prices by January 10. According to analysts, this will have repercussion in other States too forcing the manufacturers to cut the price. Market participants say that this also revived the memory of the period following last Union Budget, when the Finance Minister threatened to take tough measures to arrest soaring prices. Analysts tracking the sector said that the forthcoming Union Budget...

Infrastructure industries see sharp drop in growth in Nov (The Hindu Busienss Line 8th Jan 2008)Growth in core infrastructure industries declined sharply to 5.3 per cent in November 2007-08 from 9.6 per cent in the year-ago period. For the April-November period of the current fiscal, the growth for the key sectors, including steel, cement, power, crude petroleum and refinery products, dropped to six per cent from 8.9 per cent, according to the official data released today.

FMCG stocks shine (The Hindu Business Line 8th Jan 2008)There seems to be a reversal of fortune happening in the fast moving consumer goods sector with the BSE-FMCG index hitting its 52-week high on Monday. While the benchmark index went up by 0.61 per cent on Monday, BSE-FMCG index surged by 3.30 per cent, ending up being the highest gainer for the day. This sector, which was in disfavour with investors for more than a year now, seems headed for better days. Among indices, the BSE-FMCG gained the maximum over the week reporting a rise of 7.95 per cent. The Sensex itself went up by 2.59 per cent during this period. More

Sugar makes a smart comeback (Moneycontrol.com 7th Jan 2008) The entire sugar space has been buzzing with several stocks hitting new 52-week highs. There is definately good news in the pipeline, if one looks at the price movements for stocks like Bajaj Hindusthan which had gone down to Rs 120 on 23rd August but since then rallied to Rs 341 as on today maybe slightly higher or lower which is a 52-week high for itself.Similar case for Balrampur Chini which was at a low of Rs 51 to Rs 123 today while Shree Renuka Sugars had gone down to Rs 462. So all of these majors actually trading at high prices - 52 week high or even 18 months high if so to say. More

IT counters suffer most (The Hindu Business Line 7th Jan 2008)Amid fears of recession following weak economic data – increase in unemployment to a two-year high and decline in manufacturing, the US stocks slumped to five month low. The first week of the New Year started on disastrous note, as the S&P 500 retreated 4.5 per cent to 1,411.63 last week – the steepest fall in five months. The Dow Jones Industrial Average slumped 4.2 per cent to 12,800.18. That brought its loss since December 31 to 3.5 per cent, the worst first three days of any year since 1904, according to Bloomberg data. The Nasdaq Composite Index declined 6.4 per cent to 2,504.65, the lowest since April. More

Realty shares score highest PE ratio (The Economic Times 7th Jan 2008)Companies engaged in realty sector are commanding highest Price Earning (PE) ratio on stock exchanges at present followed by firms from the capital goods and power sectors. According to the Bombay Stock Exchange which computes PE for its dozen odd sectoral indices, the average PE of BSE Realty Index was as high as 71.55 as on January 4, while the average PE ratio for BSE Capital Goods was second highest at 51.20. The BSE Power Index PE ratio was at 42.94. Price earning ratio indicates market's fancy for any particular share or sector. The companies that are growing fast generally command high PE ratios. The PE ratio is arrived at by dividing the share price by the earning per share. More