A bout of initial volatility was witnessed as key benchmark indices trimmed losses after a weak opening. The S&P BSE Sensex was down 29.43 points or 0.15%, up about 55 points from the day's low and off close to 30 points from the day's high and. The market breadth, indicating the overall health of the market, was positive. Reliance Industries' (RIL) declined after Q1 results. Asian Paints and L&T gained ahead of their Q1 June 2013 results today, 22 July 2013.
Wockhardt dropped after the company said it has received a warning letter from the United States Food and Administration (USFDA), listing the observations made by it during its earlier inspection of Wockhardt's Waluj facility near Aurangabad. Federal Bank declined after weak Q1 results.
The market may remain volatile this week 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 on Thursday, 25 July 2013.
Foreign institutional investors (FIIs) bought shares worth a net Rs 252.26 crore on Friday, 19 July 2013, as per provisional data from the stock exchanges.
At 9:28 IST, the S&P BSE Sensex was down 29.43 points or 0.15% to 20,120.42. The index fell 86.01 points at the day's low of 20,065.69 in early trade. The index declined 0.95 points at the day's high of 20,152.65 in early trade.
The CNX Nifty was down 5.45 points or 0.09% to 6,023.75. The index hit a low of 6,004.25 in intraday trade. The index hit a high of 6,029.55 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 469 shares gained and 350 shares fell. A total of 27 shares were unchanged.
Among the 30-share Sensex pack, 20 stocks rose and rest of them fell. HDFC (up 1.46%), Bajaj Auto (up 1.43% and M&M (up 0.86%), edged higher.
Reliance Industries' (RIL) declined 1.97% after Q1 results. The company's net profit rose 18.9% to Rs 5352 crore on 4.6% decline in revenue to Rs 90589 crore in Q1 June 2013 over Q1 June 2012. The result was announced after market hours on Friday, 19 July 2013.
RIL's operating profit before other income and depreciation rose 3.9% to Rs 7075 crore in Q1 June 2013 over Q1 June 2012. Other income rose 33.14% to Rs 2535 crore in Q1 June 2013 over Q1 June 2012, mainly on account of profit on sale of investments in the fixed income instruments and higher average liquid investments. RIL's revenue from exports rose 3.2% to Rs 57026 crore in Q1 June 2013 over Q1 June 2012.
RIL's outstanding debt as on 30 June 2013 was Rs 80307 crore, as against Rs 72427 crore as on 31 March 2013. The company had cash and cash equivalents of Rs 93066 crore as on 30 June 2013. These were in bank deposits, mutual funds, CBLO, CDs and Government securities/bonds. RIL is debt free on a net basis as on 30 June 2013.
The net addition to fixed assets for Q1 June 2013 was Rs 10523 crore, including exchange rate difference capitalisation. Capital expenditure (capex) was principally on account of ongoing expansion projects in the petrochemicals and refining businesses at Jamnagar, Dahej, Silvassa and Hazira, RIL said.
RIL's gross refining margin (GRM) edged up to $8.4 per barrel in Q1 June 2013 from $7.6 a barrel in Q1 June 2012. It fell from $10.1 a barrel in Q4 March 2013.
Commenting on the company's Q1 results, Mukesh D. Ambani, CMD, RIL said: "Reliance achieved strong results during the first quarter of FY 2013-14, while investing in projects that will provide sustainable advantage for a longer period. Our performance this quarter reflects higher operating rates and embedded options in crude sourcing and product placement, given the size and scale of the refining business. Robust growth in petrochemical products demand augurs well for our biggest ever expansion programme. Retail business continues to make remarkable progress and registered a 53% growth in revenues during the first quarter".
Production from RIL's KG-D6 field was 0.5 million barrels of crude oil, 0.06 million barrels of condensate and 49.2 BCF of natural gas in Q1 June 2013, a reduction of 41%, 58% and 53% respectively on a year on year (YoY) basis. RIL attributed the fall in production to geological complexity, natural decline in the fields and higher than envisaged water ingress.
RIL's shale gas business in the United States comprises of three upstream joint ventures (JVs), each with Chevron, Pioneer Natural Resources and Carrizo Oil & Gas and a midstream JV with Pioneer. Aggregate investments since inception of these JVs stood at around $6 billion, as of 30 June 2013, RIL said.
RIL said its retail business continued to grow in Q1 June 2013 despite challenging macroeconomic environment. A mix of strong same store sales growth and new store openings helped increase the turnover by 53% to Rs 3474 crore in Q1 June 2013 over Q1 June 2012, RIL said. The business continued with store expansion across all format sectors and added 45 stores to its portfolio in Q1 June 2013. The business witnessed strong same store sales growth ranging from 10% to 22% across format sectors during the quarter over corresponding period last year, RIL said.
RIL's subsidiary, Reliance Jio Infocomm (RJIL), which is the only private player with broadband wireless access spectrum in all the 22 telecom circles of India, plans to provide reliable fast internet connectivity and rich digital services on a pan India basis, RIL said.
RIL said it has retained its domestic credit ratings of AAA from CRISIL and FITCH and an investment grade rating for its international debt from Moody's as Baa2. S&P has raised the long term corporate credit rating to BBB+ from BBB.
Bhel fell 3.34%, with the stock extending Friday's 8.02% losses.
Asian Paints gained 0.99% ahead of its Q1 June 2013 results today, 22 July 2013.
L&T rose 0.62% ahead of its Q1 June 2013 results today, 22 July 2013.
Shares of NTPC fell 0.1%. NTPC Vidyut Vyapar Nigam (NVVN), a wholly owned subsidiary of NTPC, has entered into a Power Purchase Agreement (PPA) with Kerala State Electricity Board (KSEB) for supply of 300 megawatts (MW) Round the Clock (RTC) power for a period of three years starting from 1 March 2014. The PPA envisages supply of over seven billion unit power sourced by NVVN from Chhattisgarh during this contract period. The contract has been bagged by NVVN, through a competitive bidding process conducted by KSEB.
Wockhardt declined 3.39% after the company on Saturday, 20 July 2013, said it has received a warning letter from the United States Food and Administration (USFDA), listing the observations made by it during its earlier inspection of Wockhardt's Waluj facility near Aurangabad. Wockhardt had on 24 May 2013 said that the company received an 'import alert' from USFDA on one of its manufacturing unit located at Waluj. The company at that time said that the impact of the import alert on the revenues is estimated to be in the range of $100 million on an annualised basis.
Wockhardt said that the company continues to cooperate with USFDA to resolve the issues at the earliest. If any additional measures are necessary, the company would take them to squarely address all concerns, Wockhardt said.
Federal Bank declined 3.03% on weak Q1 results. The bank's net profit declined 44.49% to Rs 105.66 crore on 12.52% growth in total income to Rs 1869.05 crore in Q1 June 2013 over Q1 June 2012. The result was announced after market hours on Friday, 19 July 2013.
Federal Bank's ratio of net non-performing assets (NPAs) to net advances stood at 0.91% as on 30 June 2013, as against 0.98% as on 31 March 2013 and 0.62% as on 30 June 2012. The ratio of gross NPAs to gross advances stood at 3.51% as on 30 June 2013, as against 3.44% as on 31 March 2013 and 3.6% as on 30 June 2012.
Federal Bank's provisions and contingencies jumped 290.41% to Rs 245.10 crore in Q1 June 2013 over Q1 June 2012.
The bank's capital adequacy ratio (CAR) as per Basel II norms stood at 15% as on 30 June 2013, as against 14.73% as on 31 March 2013 and 15.45% as on 30 June 2012. CAR as per Basel III norms stood at 14.27% as on 30 June 2013.
Asian stocks were mixed on Monday, 22 July 2013. Key benchmark indices in South Korea, Singapore, and Taiwan rose by 0.4% to 0.63%. Key benchmark indices in China, Indonesia, Japan and Hong Kong fell by 0.02% to 0.75%.
In Japan, the ruling Liberal Democratic Party's coalition easily won a majority of the 121 seats contested in the upper house elections over the weekend. The victory gave Prime Minister Shinzo Abe's LDP control over both houses, consolidating its political power.
Meanwhile, the People's Bank of China removed a floor on banks' lending rates, according to a July 19 statement. China currently caps the interest rates that banks pay on deposits, a factor that often pushes savers toward riskier investments in search of higher returns.
US stocks closed mixed on Friday, 19 July 2013. The S&P 500 index eked out gains to end at another all-time high on Friday, 19 July 2013 while losses for the technology sector weighed on the Dow Jones Industrial Average and the Nasdaq Composite after disappointing earnings from Advanced Micro Devices Inc. and Microsoft Corp.
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