Key benchmark indices snapped four day losing streak today, 24 May 2013. The barometer index, the S&P BSE Sensex, was provisionally up 56.94 points or 0.29%, off close to 100 points from the day's high and up about 160 points from the day's low. Index heavyweight and cigarette major ITC edged lower. Another index heavyweight Reliance Industries (RIL) edged higher. The market breadth, indicating the overall health of the market, was positive. Auto stocks were mostly higher. Two wheeler markers dropped.
India's largest steel maker by sales, Tata Steel jumped after the company's consolidated earnings before interest, taxation, depreciation and amortization (EBITDA) rose 27.75% to Rs 4368 crore in Q4 March 2013 over Q4 March 2012. State Bank of India (SBI) extended Thursday's slump triggered by weak Q4 results. Shares of private banks edged higher.
In a bout of initial volatility, key benchmark indices pared entire gains after opening higher tracking mostly firm Asian stocks. The CNX Nifty slipped below the psychological 6,000 mark after regaining that mark at the onset of the trading session. It weakened to hit fresh intraday low in morning trade. The barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their lowest level in 2-1/2 weeks. It regained positive terrain in mid-morning trade. It regained strength in early afternoon trade. Key benchmark indices pared gains amid volatility in afternoon trade. It was slightly higher in mid-afternoon trade. It hovered in positive terrain in late trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 316.23 crore on Thursday, 23 May 2013, as per provisional data from the stock exchanges.
As per provisional figures, the S&P BSE Sensex was up 56.94 points or 0.29% to 19,731.27. The index declined 105.84 points at the day's low of 19,568.49 in morning trade, its lowest level since 6 May 2013. The index jumped 158.81 points at the day's high of 19,833.14 in early trade.
The CNX Nifty was up 27.65 points or 0.46% to 5,994.70, as per provisional figures. The index hit a high of 6,015.30 in intraday trade. The index hit a low of 5,936.80 in intraday trade, its lowest level since 6 May 2013.
The total turnover on BSE amounted to Rs 1971 crore, lower than Rs 3910.33 crore on Thursday, 23 May 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,189 shares rose and 1098 shares fell. A total of 147 shares were unchanged.
Among the 30-share Sensex pack, 15 stocks fell and the rest of them rose. Sun Pharmaceutical Industries, Cipla and TCS shed by 1.49% to 3.17%. Tata Power Company, Sterlite Industries and L&T rose by 1.85% to 3.92%.
Index heavyweight Reliance Industries (RIL) rose 0.31% to Rs 787.60. The stock hit high of Rs 795 and low of Rs 780.
Index heavyweight and cigarette major ITC fell 0.59% to Rs 330.35. The stock hit high of Rs 335.70 and low of Rs 328.90. The stock had hit record high of Rs 355 in intraday trade on 11 May 2013. The company's net profit rose 19.43% to Rs 1927.98 crore on 19.12% growth in total income to Rs 8511.38 crore in Q4 March 2013 over Q4 March 2012. The result was announced on 17 May 2013. ITC's net profit rose 20.38% to Rs 7418.39 crore on 18.74% growth in total income to Rs 30839.97 crore in the year ended March 2013 over the year ended March 2012.
On a consolidated basis, ITC's net profit rose 21.57% to Rs 7608.07 crore on 19.02% growth in total income to Rs 32505.14 crore in the year ended March 2013 over the year ended March 2012.
ITC's board of directors at its meeting held on Friday, 17 May 2013, recommended a dividend of Rs 5.25 per share for the financial year ended 31 March 2013.
India's largest steel maker by sales, Tata Steel jumped 4.67% after the company's consolidated earnings before interest, taxation, depreciation and amortization (EBITDA) rose 27.75% to Rs 4368 crore in Q4 March 2013 over Q4 March 2012. EBITDA margin improved to 12.6% in Q4 March 2013, from 10.1% in Q4 March 2012 and 7% in Q3 December 2012. The stock was the top gainer from the Sensex pack.
The company reported consolidated net loss of Rs 6529 crore in Q4 March 2013, as against net profit of Rs 433 crore in Q4 March 2012. Turnover rose 1.91% to Rs 34650 crore in Q4 March 2013 over Q4 March 2012. The result was announced after market hours on Thursday, 23 May 2013.
Tata Steel reported consolidated net loss of Rs 7058 crore in the year ended 31 March 2013 (FY 2013), as against net profit of Rs 5390 crore in the year ended 31 March 2012 (FY 2012). Turnover rose 1.36% to Rs 1.34 lakh crore in FY 2013 over FY 2012. EBITDA declined 6.49% to Rs 12654 crore in FY 2013 over FY 2012. EBITDA margin declined to 9.4% in FY 2013, from 10.2% in FY 2012.
Tata Steel monetised its portfolio by selling part of its stake in Titan Industries to realise profits of Rs 962 crore in FY 2013.
The primary reason behind Tata Steel reporting net loss in Q4 March 2013 and FY 2013 was due to the non-cash impairment charge of Rs 8356 crore in Q4 March 2013. Tata Steel said that the Eurozone crisis has pushed regional economies in Europe and UK into a recession and the current steel demand is almost 30% lower than the pre-2008 financial crisis level. These severely depressed conditions are expected to continue over the short-to-medium term and have led to a downward revision of cashflow expectations and the valuation of the Groups' European operations. Reflecting these conditions, the Group took an impairment charge of Rs 8356 crore in Q4 March 2013. This is a non-cash charge and does not affect any of its financial covenants and its funding position, the company said. A significant portion of this impairment charge relates partly to the goodwill created on the acquisition of Corus Group plc in 2007 and partly to the assets of the business units that have been adversely affected by the severe contraction in demand, especially in the construction sector, Tata Steel said. The balance impairment relates to the assets in Tata Steel KZN in South Africa, Tata Steel Thailand and Tata Metaliks for Redi Plant, the company added.
During FY 2013, Tata Steel Group raised Rs 31799 crore of debt from various banks and financial markets taking its gross debt to Rs 66074 crore. An amount of Rs 15472 crore was incurred on capital expenditure (capex) and Rs 27099 crore was utilised towards repayment of principal obligations, Tata Steel said in a statement. The closing cash and cash equivalents as of 31 March 2013 stood at Rs 10652 crore. The net debt as of 31 March 2013 stood at Rs 55421 crore, as against net debt of Rs 47657 crore as of 31 March 2012.
Tata Steel Group has also secured above Rs 24000 crore through significant financing deals in April and May 2013, the company said in a statement.
The Group was able to successfully negotiate financial closure for its 6 mtpa Kalinga Project. It has tied up Rs 22800 crore of project financing with a consortium of 21 banks and financial institutions. This will meet the funding requirement of both the phases of the project, Tata Steel said in a statement.
Tata Steel Managing Director Mr. HM Nerurkar said, "Despite the weakening market conditions in the last year, the Indian operations posted a strong growth in production and deliveries. Our investment over the years in customer relationship building, developing distribution chain, undertaking market research and retail focus paid dividend through the significant sequential increase in deliveries in the last quarter. I convey my heartiest congratulations to all the employees for achieving this commendable performance. The brownfield expansion is now fully ramped up and we are committed to commissioning the greenfield plant in Odisha on schedule. The South East Asian operations have performed well with improving demand, product differentiation, efficiency improvement and restructuring measures."
Tata Steel Europe MD & CEO Dr Karl-Ulrich Kler said, "Europe's economic deterioration last year reversed the modest recovery in European steel demand that had been going on since 2009 and our deliveries fell as a consequence. We acted decisively in response to the renewed downturn by focusing intensely on costs and cash flow management. We took $250 million of cost out of the business and reduced our steel stocks to record lows by year-end. We also acted to restructure our support functions and asset base. But we did not allow the downturn to divert us from our longerterm objective of building an all-weather business. We invested significantly in improvements to our operational base and we made substantial progress in strengthening our long-term relationships with end customers in our chosen sectors. And we increased the proportion of high-value, differentiated products and services in our sales, which have risen by almost 20% in the last two years. These improvements have given us a firmer foundation as we enter another tough year of subdued steel demand in Europe."
Tata Steel's board of directors at a meeting held on Thursday, 23 May 2013, recommended dividend of Rs 8 per share for FY 2013.
Auto stocks were mostly higher. M&M rose 0.7%. Ssangyong Motor part of Mahindra Group, announced on Thursday, 23 May 2013 that the full payment of 80 billion won for the new shares has been received from its majority shareholder Mahindra & Mahindra Group and that the paid-in capital increase was successfully completed. Ssangyong Motors decided to make a third party allotment (Preferential Offer) to Mahindra on 14 February 2013 to Secure investment funds for new products. The most recent increase in the paid-in capital results from the issuance of some 14.545 million new shares (capital increase ratio of 11.9%). All of the new shares will be locked up for one year and the expected listing date is scheduled on 7 June 2013. After this, Mahindra's shareholding ratio in Ssangyong Motor will increase from 69.63% to 72.85%.
As the paid-in capital increase got completed smoothly, Ssangyong Motor's new product development such as the small CUV which will be launched in 2015, will gain further momentum, Furthermore, the company's debt ratio will decline and cash liquidity will improve, which will further strengthen the company's financial soundness.
Also this paid-in capital increase serves as a message to show the strong commitment of the majority shareholder Mahindra and its confidence in the turnaround of Ssangyong Motor. This will greatly boost Ssangyong Motor's external credit Worthiness. Apart from the 80 billion won paid-in capital Mahindra agreed to roll over the Corporate bond worth 95.4 billion won that was scheduled to mature in 2014, by another year: This is an additional source of funds for Ssangyong Motor. With this, the company expects more tangible results from synergy in various areas of sales sourcing etc.
Mahindra invested 522.5 billion won in 2011 to acquire 70% of Ssangyong Motor Company, and since the acquisition, Ssangyong Motor's board of directors has approved a total investment of approx. 500 billion won till now, which includes 295.8 billion won investment for small size new engine development and CUV development projects
India's largest car maker by sales, Maruti Suzuki India rose 1.23%.
Tata Motors declined 0.93%. The company said on 18 May 2013 that TML Holdings, a wholly owned subsidiary of the company, issued and allotted S$350 million in principal amount of 4.25% senior notes due 2018. The net proceeds from the issue will be used for the redemption of preference shares issued to Tata Motors and for general corporate purposes. Australia and New Zealand Banking Group, Citigroup Global Markets Singapore, Deutsche Bank AG, Singapore Branch and Standard Chartered Bank acted as joint lead managers and joint bookrunners for the issue.
This announcement does not constitute nor form a part of any offer or solicitation to purchase or subscribe for securities in Singapore, the United States, India or elsewhere, company said.
Two wheeler markers dropped. Bajaj Auto fell 0.53%. The company's net profit fell 1% to Rs 766 crore on 4% rise in turnover to Rs 4990 crore in Q4 March 2013 over Q4 March 2012. Net profit rose 1% to Rs 3044 crore on 3% growth in turnover to Rs 20793 crore in the year ended 31 March 2013 (FY 2013) over the year ended 31 March 2012 (FY 2012). The result was announced on 16 May 2013.
Bajaj Auto said that the company's performance in FY 2013 was good in a very difficult year for the automobile industry. The company's strategy to build strong brands and offer differentiated products in the front-end, and focus on cost and productivity improvements in the back-end, has yielded desired results, Bajaj Auto said.
India's largest motorcycle maker by sales, Hero MotoCorp declined 0.88%. The company after market hours on Thursday, 23 May 2013 said that it has fixed 30 May 2013 as record date for ascertaining the names of the equity shareholders of Hero Investments (HIPL) in proportion of their holdings in HIPL for considering their entitlement for the purpose of issuance and allotment of equity shares in HMCL in the ratio of 1:1 i.e. one equity share for every one existing equity share held in HMCL by HIPL.
State Bank of India (SBI) fell 1.15%, with the stock extending Thursday's 7.96% slump triggered by weak Q4 results. The bank reported 18.54% fall in net profit to Rs 3299.22 crore on 6.98% rise in total income to Rs 36330.87 crore in Q4 March 2013 over Q4 March 2012. The result was announced during market hours on Thursday, 23 May 2013.
SBI's ratio of net non-performing assets to net advances stood at 2.10% as on 31 March 2013, compared with 2.59% as on 31 December 2012 and 1.82% as on 31 March 2012.
The bank's ratio of gross non-performing assets (NPA) to gross advances stood at 4.75% as on 31 March 2013, compared with 5.30% as on 31 December 2012 and 4.44% as on 31 March 2012.
Provisions and contingencies rose 33.14% to Rs 4180.99 crore in Q4 March 2013 over Q4 March 2012. The provisioning coverage ratio as on 31 March 2013 stood at 66.58% compared with 68.10% as on 31 March 2012.
The bank's Capital Adequacy Ratio (CAR) as per Basel II norms stood at 12.92% as on 31 March 2013, compared with 12.21% as on 31 December 2012 and 13.86% as on 31 March 2012.
The board of SBI has declared a dividend of Rs 41.50 per share for the accounting year ended 31 March 2013.
Shares of private banks edged higher. HDFC Bank gained 0.42% to Rs 701.60. The stock had hit a record high of Rs 724 hit in intraday trade on 20 May 2013.
ICICI Bank rose 2.6% to Rs 1,204. The stock had hit 52-week high of Rs 1,234 in intraday trade on 21 May 2013. The bank after trading hours on 16 May 2013, said it has received an aggregate equity capital repatriation of Canadian dollar 75 million from ICICI Bank Canada, its wholly owned banking subsidiary in Canada. Post the repatriation, the share capital of ICICI Bank Canada is Canadian dollar 857 million and its capital adequacy ratio continues to be strong, ICICI Bank said in a statement.
ICICI Bank said it already has a strong capital adequacy ratio, and the return of capital by the subsidiary will enhance the bank's ability to optimise capital deployment and return on equity.
As per the Q4 results calendar, Coal India unveils consolidated FY 2013 results on Monday, 27 May 2013. Sun Pharma, Power Grid Corporation of India, GAIL (India) and Hindalco Industries unveil Q4 results on 28 May 2013. Tata Motors, ONGC, Cipla, NMDC and BPCL unveil Q4 results on 29 May 2013. DLF, M&M and Tata Power unveil Q4 results on 30 May 2013.
Global credit rating agency Standard & Poor's (S&P) on 17 May 2013, affirmed India's sovereign rating at BBB-minus with a negative outlook, reiterating there was a one-in-three chances of a ratings downgrade over the next 12 months. S&P said the government's ability to prop up investment growth remains uncertain. The ratings agency, however, said there was scope to upgrade the sovereign ratings if the government unleashes public and private investments to spur economic growth.
The monsoon rains may arrive on the southern coast around 3 June 2013, the weather office forecast on 15 May 2013. The rains, which run from June to September, are vital for the 55% of farmland without irrigation in India, one of the world's largest producers and consumers of food. The India Meteorological Department (IMD) has predicted normal rains this year.
The Reserve Bank of India (RBI) undertakes mid-quarter review of the monetary policy on 17 June 2013. RBI Governor D Subbarao on 14 May 2013 said that the central bank will take note of falling inflation when discussing potential interest rate cuts. The RBI on 3 May 2013 cut its key policy rate viz. the repo rate by 25 basis points (bps) to 7.25% and kept the cash reserve ratio (CRR) for banks unchanged at 4% after a monetary policy review. RBI said at that time that the balance of risks stemming from its assessment of the growth-inflation dynamic provides little space for further monetary easing. The RBI said it will endeavour to condition the evolution of inflation to a level of 5% by March 2014, using all instruments at its command.
The finance ministry in October 2012 announced a five-year plan to cut fiscal deficit. The government hopes to reduce the fiscal deficit to 3% by March 2017.
European stock markets edged lower on Friday as investors awaited data that may show U.S. durable-goods orders increased in April. Key benchmark indices in UK and Germany fell by 0.61% to 0.7%. France's CAC 40 rose 0.02%.
German business confidence increased in May for the first time in three months, adding to signs that growth in Europe's largest economy is gathering pace. The Ifo institute's business climate index, based on a survey of 7,000 executives, climbed to 105.7 from 104.4 in April.
Most Asian stocks rose on Friday. Key benchmark indices in China, Japan, South Korea and Indonesia rose by 0.22% to 0.89%. Key benchmark indices in Hong Kong and Taiwan shed by 0.23% to 0.34%. Markets in Singapore, Thailand, Malaysia and Sri Lanka are closed today for holidays.
Trading in US index futures indicated that the Dow could fall 34 points at the opening bell on Friday, 24 May 2013. U.S. stocks fell modestly on Thursday, substantially paring intraday losses after upbeat U.S. economic reports and gains for Hewlett-Packard Co. countered worries about the Federal Reserve potentially tapering its bond-buying program.
Economic data on Thursday showed the number of Americans filing new claims for unemployment benefits fell last week, while new single family home sales rose.
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