Key benchmark indices continued to hover in negative terrain in mid-morning trade as weakness in most Asian stocks dampened sentiment. The S&P BSE Sensex was down 45.92 points or 0.23%, off close to 65 points from the day's high and up about 135 points from the day's low. The market breadth, indicating the overall health of the market, was weak. Shares of power equipment major Bharat Heavy Electricals hit 52-week low.
Ambuja Cements tumbled after Swiss parent Holcim announced a major restructuring of its India operations on Wednesday, 24 July 2013. Weak Q2 results also weighed on the counter. Shares of ACC also extended intraday losses. Shares of other cement firms also declined after weak Q2 results from Ambuja Cements. Oil exploration firm Cairn India edged higher in volatile trade, with the stock shrugging off weak Q1 result. Car major Maruti Suzuki was volatile after the Central Board of Excise and Customs (CBEC) on Wednesday, 24 July 2013, clarified that Maruti SX4, Honda Civic and Toyota Corolla Altis will attract a lower excise duty of 27% as applicable to large segment cars.
Key benchmark indices hovered near the flat line in early trade after alternately moving between positive and negative zone. Key benchmark indices edged lower in morning trade. The market was range bound in mid-morning trade.
The market may remain volatile today, 25 July 2013, as traders roll over positions in the futures & options (F&) segment from the July 2013 series to August 2013 series. The near month July 2013 derivatives contracts expire today, 25 July 2013.
Foreign institutional investors (FIIs) sold shares worth a net Rs 404.50 crore on Wednesday, 24 July 2013, as per provisional data from the stock exchanges.
At 11:20 IST, the S&P BSE Sensex was down 45.92 points or 0.23% to 20,044.76. The index fell 180.60 points at the day's low of 19,910.08 in early trade, its lowest level since 17 July 2013. The index rose 20.13 points at the day's high of 20,110.81 in early trade.
The CNX Nifty was down 20.60 points or 0.34% to 5,969.90. The index hit a low of 5,958.30 in intraday trade, its lowest level since 17 July 2013. The index hit a high of 5,990.65 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,094 shares fell and 685 shares rose. A total of 127 shares were unchanged.
Among the 30-share Sensex pack, 19 stocks fell and rest of them rose. Tata Power Company (down 2.65%), Hindustan Unilever (down 2.61%), and Wipro (down 1.96%), edged lower.
Shares of power equipment major Bharat Heavy Electricals declined 2.12% to Rs 159.55. The stock hit a 52-week low of Rs 158.50 in intraday trade today, 25 July 2013.
Ambuja Cements tumbled after Swiss parent Holcim announced a major restructuring of its India operations on Wednesday, 24 July 2013. Weak Q2 results also weighed on the counter. Shares of ACC also edged lower. Currently, Holcim owns a little over 50% stake in both Ambuja and ACC.
Shares of Ambuja Cements were off 12.98%, with the stock extending intraday losses. ACC was off 4.29%, with the stock extending intraday losses.
The board of directors of Ambuja Cements on Wednesday, 24 July 2013, approved a proposal, wherein Ambuja will first acquire from Holderind Investments, Mauritius (Holcim), a 24% stake in Holcim India for a cash consideration of Rs 3500 crore, followed by a merger of Holcim India into Ambuja. The intra-group transaction will result in Ambuja holding 50.01% stake in ACC. The merger swap ratio proposed by two independent accounting firms and approved by Ambuja's board, is one Ambuja share for 7.4 Holcim India shares, translating into an implied swap ratio of 6.6 Ambuja shares for every ACC share, Ambuja said in a statement. Based on the approved merger ratio, Ambuja will issue 58.4 crore new equity shares of the company to Holcim, as consideration for the merger. Post the merger, the expanded capital base of Ambuja (post cancellation of the shares held by Holcim India in Ambuja and the issuance of new shares as aforesaid) will increase by 28%. Holcim will then own 61.39% of Ambuja and Ambuja in turn own 50.01% of ACC.
In addition, Ambuja's board also provided its approval for Ambuja to make commercially reasonable efforts to invest up to Rs 3000 crore to acquire an economic ownership in ACC of up to 10% without triggering a mandatory open offer.
Ambuja said that this restructuring exercise is expected to be EPS accretive from year one post completion of the transaction. There is synergy potential of about Rs 900 crore through supply chain and fixed cost optimization expected to be realised in a phased manner over two years post completion of the transaction.
Meanwhile, Ambuja Cements' net profit fell 30.9% to Rs 324 crore on 8.6% decline in net sales to Rs 2346 crore in Q2 June 2013 over Q2 June 2012. The company announced Q2 result after market hours on Wednesday, 24 July 2013.
The cement industry is going through subdued demand on account of overall economic slowdown, Ambuja Cements said. Early onset of monsoon has put further pressure on demand, the company said. With regard to future business outlook, Ambuja Cements said that despite difficult macroeconomic conditions, the company is committed to its thrust in improving operational efficiency and productivity. The company believes that these initiatives will go a long way in preserving and even growing operating margins, it said.
Ambuja Cements also said that the board of directors of the company at its meeting held on 24 July 2013 approved setting up of a 2.17 million tonnes per annum (MTPA) greenfield clinkerization project at Marwar Mundwa, District Nagaur, Rajasthan and three clinker grinding units of 1.5 MTPA capacity each at Marwar Mundwa, Rajasthan, Dadri (phase II), Uttar Pradesh and Osara, Madhya Pradesh at an approximate cost of Rs 3500 crore.
Shares of other cement firms also declined after weak Q2 results from Ambuja Cements. UltraTech Cement (down 3.11%) and India Cements (down 4.21%), edged lower.
Car major Maruti Suzuki was volatile after the Central Board of Excise and Customs (CBEC) on Wednesday, 24 July 2013, clarified that Maruti SX4, Honda Civic and Toyota Corolla Altis will attract a lower excise duty of 27% as applicable to large segment cars. The stock was up 0.1% at Rs 1,417.25. The stock rose as much as 1.42% at the day's high of Rs 1,436 so far during the day. The stock lost 0.67% at the day's low of Rs 1,406.30 so far during the day. CBEC issued the clarification after car makers sought clarification on whether the higher excise duty of 30% applicable to sports utility vehicles (SUVs) will also be applicable on sedan cars like Maruti SX4, Honda Civic and Toyota Corolla Altis. It may be recalled that the government had raised excise duty on SUVs to 30% from 27% on SUVs in Union Budget 2013-14.
Maruti Suzuki is set to unveil its Q1 June 2013 results today, 25 July 2013.
Oil exploration firm Cairn India rose 0.86%, with the stock reversing initial losses triggered by the company's weak Q1 result. The scrip was volatile. The stock rose as much as 1.49% at the day's high of Rs 312.45 so far. The scrip lost as much as 1.26% at the day's low of Rs 303.95 in intraday trade so far. The company's consolidated net profit fell 18% to Rs 3127 crore on 8% decline in revenue to Rs 4063 crore in Q1 June 2013 over Q1 June 2012. The company announced Q1 result after market hours on Wednesday, 24 July 2013.
Cairn India reports revenue net of profit-sharing with the government in all blocks and Rajasthan block royalty expense. During the quarter, the profit petroleum pay-out to the government rose from 20% to 30% in the DA1 in the Rajasthan block. The gross cumulative Rajasthan development capital expenditure as on 30 June 2013 was $3.9 billion, of which $107 million was spent in Q1 June 2013 including $19 million in DA 2.
Cairn India said it achieved highest ever gross operated production of 212,442 barrels of oil equivalent per day (boepd) in Q1 June 2013. The company achieved record average daily production of 173,517 boepd for Rajasthan block during the quarter.
Commenting on the first quarter results, Mr. Elango P, Whole time Director, Cairn India said: "I am very pleased to report that we are once again delivering robust operational and financial results with the company achieving its highest ever gross operated daily production. We continue to generate substantial cash flow from one of the lowest cost producing assets in the world and are well placed to deliver success from our $3 billion capital expenditure programme. We remain focussed on driving production growth from our core Rajasthan asset and delivering positive results from our extensive exploration and appraisal program. We remain particularly excited by the deep gas prospects and welcome the recent Government decision on gas pricing that will encourage higher investments in exploration and the development of gas discoveries. We expect the government to come out with a policy on Integrated Development Plan that will help in reducing the time from discovery to production".
Central Bank of India tumbled 7.82% to Rs 57.20 after net profit declined 93.5% to Rs 21.93 crore on 14.6% growth in total income to Rs 6443.45 crore in Q1 June 2013 over Q1 June 2012. The stock hit a 52-week low of Rs 55.50 in intraday trade today. The Q1 result was announced after market hours on Wednesday, 24 July 2013.
Central Bank of India's (CBI) ratio of net non-performing assets (NPAs) to net advances surged to 3.85% as on 30 June 2013, from 2.9% as on 31 March 2013 and 3.22% as on 30 June 2012. The ratio of gross NPAs to gross advances jumped to 6.03% as on 30 June 2013, from 4.8% as on 31 March 2013 and 4.87% as on 30 June 2012.
The bank's provisions and contingencies jumped 178.6% to Rs 983.26 crore in Q1 June 2013 over Q1 June 2012.
CBI's capital adequacy ratio (CAR) as per Basel II norms stood at 11.43% as on 30 June 2013, as against 11.49% as on 31 March 2013 and 11.58% as on 30 June 2012.
Novartis India lost 4.29% after net profit declined 48.6% to Rs 13.87 crore on 1.7% rise in net sales to Rs 219.03 crore in Q1 June 2013 over Q1 June 2012. Novartis India said financial results for Q1 June 2013 were adversely impacted by significant rupee depreciation and slowdown in sales due to reduction in trade stocks after notification of the new drug price control order in May 2013. The expanded scope of drug price control is likely to have a significant impact on both revenue and profitability of the company. Necessary steps are being taken to reduce the adverse impact, the company said.
Asian stocks fell on Thursday, 25 July 2013, as investors weighed US economic data to gauge the fate of Federal Reserve stimulus. Key benchmark indices in Indonesia, Hong Kong, Singapore, Japan, and Taiwan were down by 0.2% to 1.24%. China's Shanghai Composite rose 0.34%. South Korea's Kospi gained 0.03%.
China on Wednesday, 24 July 2013, announced some new, minor stimulus measures. China's cabinet on Wednesday, 24 July 2013, said it would cut taxes for small businesses and seek to aid some exporters, while also increasing state investment in railways.
Trading in US index futures indicated that the Dow could fall 12 points at the opening bell on Thursday, 25 July 2013. US stocks closed largely lower on Wednesday after improving home sales in the US renewed expectations that the Federal Reserve remains on course to winding down stimulus measures this year.
A report yesterday showed that new home sales rose more than forecast in June to a five-year high, and a manufacturing gauge rose. Fed Chairman Ben S. Bernanke has said asset purchases that have stoked bond and equity gains may be trimmed this year should economic risks subside. US new-home sales climbed 8.3% to an annualized pace of 497,000, the highest level since May 2008, according to Commerce Department data. The Markit Economics preliminary index of US manufacturing increased to 53.2 in July from a final reading of 51.9 a month earlier, the London-based group said.
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