Key benchmark indices provisionally settled with small gains. The barometer index, the S&P BSE Sensex, was provisionally up 26.41 points or 0.13%, off close to 80 points from the day's high and up close to 10 points from the day's low. The market breadth, indicating the overall health of the market, was negative.
Tata Motors rose after strong Q3 results. Dr. Reddy's Laboratories fell on profit booking after reporting strong Q3 results. NMDC rose on good Q3 results. Hindalco Industries fell after its US subsidiary Novelis reported its Q3 results. Reliance Industries declined after Delhi Chief Minister Arvind Kejriwal called for an investigation into what he alleged was collusion between government policymakers and Reliance in a plan to raise natural gas prices this year. Jaiprakash Associates reversed intraday losses triggered by the company reporting a reverse turnaround in Q3 December 2013.
The market trimmed gains after a firm start. The Sensex hovered in green in mid-morning trade. Key benchmark indices traded off the day's high in early afternoon trade. Key benchmark indices further pared gains in a range bound market in afternoon trade. The Sensex retained positive zone in mid-afternoon trade. The Sensex pared intraday gains and hit fresh intraday low in late trade.
As per provisional figures, the S&P BSE Sensex was up 26.41 points or 0.13% to 20,360.68. The index jumped 109 points at the day's high of 20,443.35 in early trade, its highest level since 7 February 2014. The index rose 15.24 points at the day's low of 20,349.51 in late trade.
The CNX Nifty was up 9.45 points or 0.16% to 6,062.90, as per provisional figures. The index hit a high of 6,081.85 in intraday trade. The index hit a low of 6,053.25 in intraday trade.
The BSE Mid-Cap index garnered 18.55 points or 0.29% at 6,358.49 and outperformed the Sensex. The BSE Small-Cap garnered 7.55 points or 0.12% at 6,347.43 and underperformed the Sensex.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,366 shares dropped and 1,274 shares rose. A total of 135 shares were unchanged.
Among the 30-share Sensex pack, 15 stocks rose and rest fell. ONGC (up 1.36%), HDFC (up 1.4%), and Tata Steel (up 2.71%), edged higher from the Sensex pack.
Index heavyweight Reliance Industries declined after Delhi Chief Minister Arvind Kejriwal said he has asked for legal cases to be filed against Reliance Industries Chairman Mukesh Ambani and government policymakers over pricing of gas produced from the D6 block in the east coast. The stock was off 2.14%. "Today we have instructed the anti-corruption branch to file a criminal case against Murli Deora, FIRs against Veerappa Moily, V.K. Sibal, the (then) director general of hydrocarbons, Reliance Industries Chairman Mukesh Ambani and others," Kejriwal told a press conference. RIL had initially agreed to supply gas to utility NTPC at about $2.3 per million British thermal units (mBtu) for about 17 years, Kejriwal said. But price of gas from the D6 block was fixed at $4.2 per mBtu when Deora was oil minister. Last year, after Moily took over as oil minister, the central government agreed to link prices with global indexes, which could double the local gas prices from 1 April 2014. Kejriwal said he would ask the central government to suspend the latest order on gas pricing pending an inquiry.
The Delhi chief minister said state anti-corruption officials would look into whether Reliance Industries had violated contractual obligations and hurt industries that rely on gas.
"If gas prices are hiked to $8 this April, there will be chaos among the people of this country. It will become impossible for the common people to live", he said.
But the oil minister, Mr. Moily, dismissed the accusations. "We should sympathize with his ignorance. He does not know how government runs. There is a system in fixing prices" he told a news channel.
Dr. Reddy's Laboratories fell 0.66% to Rs 2,659 on profit booking after strong Q3 results. The stock hit high Rs 2,700 so far during the day, which is a record high for the counter. The stock hit a low of Rs 2,626.20 so far during the day. The company's consolidated net profit surged 70.21% to Rs 618.42 crore on 22.95% growth in total income to Rs 3551.49 crore in Q3 December 2013 over Q3 December 2012. The result was announced during market hours.
Tata Motors rose 2.82% on strong Q3 results. The company's consolidated net profit surged 195.23% to Rs 4804.80 crore on 38.37% increase in total income to Rs 64,034.30 crore in Q3 December 2013 over Q3 December 2012. The result was announced after trading hours on Monday, 10 February 2014.
The result was strong on the back of strong demand, growth in volumes and favourable product mix and geographic mix at Jaguar Land Rover (JLR).
Jaguar Land Rover wholesale and retail volumes for the quarter ended 31 December 2013 grew by 22.7% and 26.5%, respectively, over the corresponding period last year and stood at 116,357 units and 112,172 units, respectively. Growth in volumes is driven by launch of new Range Rover Sport, new Range Rover and Jaguar F-TYPE, alongside higher volumes of the newer XF and XJ derivatives.
As per International Financial Reporting Standards Foundation (IFRS) JLR's revenues for the quarter ended 31 December 2013 of GBP 5,328 million represented a growth of 40.1% over GBP 3,804 million during the corresponding quarter last year. Operating profit (EBITDA) stood at GBP 955 million in the quarter, up 79.2% as compared to GBP 533 million during the corresponding quarter last year. Operating margin for the quarter ended 31 December 2013, stood at 17.9%, up 390 bps as compared to corresponding quarter last year reflecting richer product mix, supported by launch of new Range Rover Sport, new Range Rover and Jaguar F-TYPE, and richer geographic mix, with increased volumes in various geographies. The profit before tax for the quarter ended 31 December 2013 grew to GBP 842 million (GBP 404 million in the corresponding quarter last year) reflecting higher operating profit (EBITDA), more favourable exchange revaluation, partially offset by higher depreciation and amortisation as well as lower finance income. Profit after tax for the quarter grew to GBP 619 million (GBP 296 million in the corresponding quarter last year).
Jaiprakash Associates rose 1.4%, with the stock reversing intraday losses triggered by the company reporting a reverse turnaround in Q3 December 2013. The company reported a net loss of Rs 88.71 crore in Q3 December 2013 as compared to a net profit of Rs 110.93 crore in Q3 December 2012. Total income fell 9.5% to Rs 3181.81 crore in Q3 December 2013 over Q3 December 2012. The result was announced after market hours on Monday, 10 February 2014.
NMDC rose 0.14% on good Q3 results. The company's net profit rose 21% to Rs 1567 crore on 38% rise in turnover to Rs 2823 crore in Q3 December 2013 over Q3 December 2012. The result was announced after market hours on Monday, 10 February 2014. The NMDC board at its meeting on Monday has recommended 2nd interim dividend of 550% in addition to the 1st interim dividend of 300% for the year ending 31 March 2014. The total interim dividend so far is 850% for the year 2013-14.
The company's production of iron ore during the 3rd quarter is 7.30 million tonnes (MT) registering a growth of more than 36% over Q3 December 2012, while sales of iron ore was 7.34 MT which is about 38% more than that of the corresponding quarter of previous year. The company's production of iron ore during the 3rd quarter is 7.30 million tonnes (MT) registering a growth of more than 36% over Q3 December 2012 while sales of iron ore was 7.34 MT which is about 38% more than that of the corresponding quarter of previous year.
For the year 2013-14, capital expenditure of Rs 2720 crore is planned to be incurred including Rs 100 crore for overseas acquisitions. So far, from April-December 2013, the capital expenditure of Rs 1679 crore has been incurred, which is 65% more than corresponding period last year. The installation of 3 MTPA steel plant at Nagarnar in Chhattisgarh, as part of NMDC's forward integration programme and value addition, is being pursued vigorously. Orders for major technological packages have already been placed, other auxiliary packages are in advanced stages of finalization and construction works of the major packages are being undertaken on war footing.
As part of its expansion programme, NMDC is developing two new mines, one in Bailadila Sector in Chhattisgarh i.e. Deposit-11B Iron Ore Project and the other in Bellary-Hospet region in Karnataka i.e. Kumaraswamy Iron Ore Mine. Besides, orders have already been placed for setting up of 1.2 MTPA capacity Pelletisation plant in Karnataka.
Speaking on the company's performance, Shri C.S. Verma, CMD said "NMDC is in its stride to reach production of iron ore of 30 MT for the year 2013-14 which would be a record in itself for NMDC in spite of evacuation hurdles. It is evident from these results that NMDC would definitely be in the forefront in the years ahead and move towards ensuring sustainable growth."
Hindalco Industries fell 1.78% after its US subsidiary Novelis reported its Q3 results. Novelis, US subsidiary of Hindalco Industries reported net income attributable to its common shareholder of $13 million for the third quarter of fiscal 2014. Excluding certain tax-effected items, net income was $23 million for the quarter, up $14 million compared to $9 million reported in the same period a year ago. The result was announced after market hours on Monday, 10 February 2014.
Adjusted EBITDA for the third quarter of fiscal 2014 was $203 million, up 10% compared to $185 million reported for the same period in the prior year. The increase was driven primarily by higher global shipments partially offset by continued pricing pressures in North America and Asia and reduced scrap benefits from lower aluminum prices.
Commenting on the company's performance, Phil Martens, President and Chief Executive Officer for Novelis said, "Our execution in the third quarter was excellent, with year-over-year shipment growth in every operating region. We have made great progress in the commissioning of our major expansions and we are now seeing the benefits of some of these projects in our results. While external market pressures partially offset the bottom line impact of this volume growth, we are confident about the realizable potential for this business as the new projects come on-line."
Shipments of aluminum rolled products totaled 721 kilotonnes for the third quarter of fiscal 2014, an increase of 11% compared to 647 kilotonnes for the same period last year. Despite being a seasonally low production quarter, shipments were up one percent sequentially compared to the second quarter. Net sales for the third quarter of fiscal 2014 were $2.4 billion, up four percent compared to the prior year resulting from higher shipments partially offset by a 12 percent decrease in average aluminum prices and lower conversion premiums.
The company continues to see strong demand for aluminum flat rolled products globally, particularly in the automotive segment. In December, the company announced a $205 million investment to further expand its global automotive aluminum capacity to 900,000 tons annually.
"We are the world's leading supplier of aluminum automotive sheet, pioneering advancements in cutting edge technologies and facilities to meet our customers' needs," said Martens. "Ford's introduction last month of the aluminum intensive F-150 pickup truck will truly be a game changer for both the automotive and aluminum industries and Novelis is in an excellent position to capture the significant growth ahead."
For the third quarter of fiscal 2014, Novelis reported liquidity of $806 million. Free cash flow was negative $61 million for the third quarter of fiscal 2014, in part due to $107 million in semi-annual bond interest payments and $157 million in capital expenditures. "We have successfully implemented several strategic actions to improve cash flow particularly around working capital activities, resulting in significantly higher free cash flow results than last year," said Steve Fisher, Chief Financial Officer for Novelis.
Aditya Birla Nuvo rose 0.36%, with the stock reversing intraday fall after the company declared good Q3 results during market hours today, 11 February 2014.
On a consolidated basis, Aditya Birla Nuvo's net profit rose 11.65% to Rs 345 crore on 2.85% fall in revenue to Rs 6545 crore in Q3 December 2013 over Q3 December 2012. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 14.27% to Rs 1297 crore in Q3 December 2013 over Q3 December 2012. The company said that financial results are not strictly comparable with the previous year on account of slump sale of the Carbon Black business with effect from 1 April 2013 and consolidation of Pantaloons business with effect from 1 July 2012.
Business-wise, Aditya Birla Financial Services (ABFS) posted a revenue of Rs 1475 crore and earnings before tax of Rs 184 crore during Q3 December 2013. It generated Return on average capital employed (ROACE) of 27% per annum. Birla Sun Life Asset Management is the fourth largest asset management company in India, with a market share of 9.7%. Its average AUM is up by 12% to Rs 92611 crore. The lending book of Aditya Birla Finance expanded by 56% to about Rs 10100 crore as on 31 December 2013. To support its growth, a share capital of Rs 250 crore was infused during nine months, taking its net worth to Rs 1448 crore. ABFS is a large player in the non banking financial services space with funds under management of Rs 117278 crore. ABFS ranks among the top 5 fund managers in India, excluding LIC.
Revenue of fashion & lifestyle business rose by 12% to Rs 1558 crore and EBITDA by 41% to Rs 192 crore in Q3 December 2013. It expanded its retail presence to 1,670 exclusive brand outlets / stores, spanning nationwide across 4.11 million square feet. It is generating an operating ROACE of 31% per annum.
Madura posted all round growth in top-line, margins and free cash flows. Revenue rose by 23% to Rs 855 crore and EBITDA doubled to Rs 116 crore in Q3 December 2013, led by growth in wholesale channel, retail stores expansion and 4% like-to-like retail stores sales growth.
Madura added 276 stores and generated free cash flows of about Rs 250 crore during nine months.
Pantaloons is in the investment phase and is strengthening its retail presence, brand positioning and merchandise to enhance sell through. It has launched 9 new Pantaloons stores and 1 factory outlet during nine months. To strengthen its market leadership, Jaya Shree has expanded Linen Yarn capacity from 2,300 to 3,400 tons per annum and Linen Fabric capacity from 7.3 to 10.1 million metres per annum, Aditya Birla Nuvo said in a statement.
Idea Cellular is consistently outperforming the industry. Its revenue market share surged from 14.3% to 15.8%. It posted a strong growth in earnings led by robust voice and data usage, improved voice realisation, scale benefit and cost efficiency. ROACE improved from 9% per annum to 13% per annum. Its revenue soared by 19% to Rs 6,608 crore and EBITDA rose by 42% to Rs 2,130 crore in Q3 December 2013. Idea is generating healthy cash profits and is strengthening its balance sheet quarter after quarter, Aditya Birla Nuvo said.
In IT-ITeS segment, revenue of Aditya Birla Minacs increased by 19% to Rs 742 crore and EBITDA grew by 5% to Rs 73 crore in Q3 December 2013. The business is posting steady cash profits.
Aditya Birla Nuvo said that ABNL IT & ITeS, a wholly owned subsidiary of ABNL, has entered into an agreement to divest Minacs at an Enterprise Value of $260 million subject to working capital and other adjustments. The transaction is expected to be completed in the next 2 to 3 months, subject to the requisite customary and regulatory approvals. The divestment proceeds will support growth plans of ABNL and ensure its greater focus in the other businesses.
In manufacturing (agri, rayon and insulators) segment, revenue from the manufacturing businesses at Rs 1,109 crore and EBITDA at Rs 118 crore in Q3 December 2013 are lower by 19% mainly on account of the discontinuance of trading in imported P&K fertilisers which has also led to rationalisation of capital employed through reduction in the outstanding subsidy. The Rayon business recorded its highest ever quarterly earnings. The new superfine yarn unit, currently operating at full capacity, will help in enhancing product quality and range.
Aditya Birla Nuvo said that standalone net debt to annualised EBITDA improved to 2.1 and Net Debt to Equity improved to 0.33 compared to 3.3 and 0.53 respectively in March 2013. In November 2013, the promoters infused Rs 671 crore on conversion of remaining warrants.
The strengthening of the company's balance sheet will support its growth plans, going forward, Aditya Birla Nuvo added.
In the foreign exchange market, the rupee edged higher against the dollar on global risk-on sentiment. The partially convertible rupee was hovering at 62.28, compared with its close of 62.43/44 on Monday, 10 February 2014.
India's trade deficit narrowed to $9.92 billion in January 2014, from $10.14 billion in December 2013, data released by the government today, 11 February 2014, showed. On year-on-year basis, merchandise exports rose 3.79% to $26.75 billion in January 2014. Imports fell 18.07% year-on-year to $36.67 billion led by a 77% drop in gold and silver imports on the year.
Finance Minister P Chidambaram will present the Vote-on-Account or interim budget on 17 February 2014. The objective of a Vote-on-Account is to get Parliament's nod for expenditure to be incurred in the months prior to elections. The next full-fledged budget will be presented by the new government which comes to power after the Lok Sabha polls in April-May 2014.
Consumer price inflation is seen easing a bit in January 2014. Inflation based on the combined consumer price index (CPI) for urban and rural India is seen easing to 9.4% in January 2014 from 9.87% in December 2013, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil data on inflation based on the combined consumer price index (CPI) for urban and rural India for January 2014 at 17:30 IST tomorrow, 12 February 2014.
Inflation based on the wholesale price index (WPI) is also expected to ease in January 2014. WPI inflation is seen easing to 5.9% in January 2014 from 6.16% in December 2013, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil data on inflation based on the wholesale price index (WPI) for January 2014 at 12 noon on Friday, 14 February 2014.
Industrial production is expected to remain in contraction mode in December 2013. Industrial output is expected to decline 1% in December 2013, as per the median estimate of a poll of economists carried out by Capital Market. India's industrial production declined 2.1% in November 2013, recording decline for second consecutive month after 1.6% dip in October 2013.
The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Sighting elevated consumer price inflation, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
European stocks rose on Tuesday, 11 February 2014, as investors awaited for US Federal Reserve Chairman Janet Yellen to deliver her first report on monetary policy. Key benchmark indices in France, Germany and UK rose 0.67% to 1%.
Asian stocks rose on Tuesday, 11 February 2014, before Federal Reserve Chairman Janet Yellen delivers her first testimony on monetary policy later in the global day. Key benchmark indices in China, South Korea, Singapore, Indonesia, Hong Kong and Taiwan rose 0.44% to 1.78%. Japanese stock markets were closed for a holiday today.
Trading in US index futures indicated that the Dow could advance 69 points at the opening bell on Tuesday, 11 February 2014. US stocks rose on Monday amid optimism that economic growth is robust enough to weather central bank stimulus cuts.
Federal Reserve Chairman Janet Yellen delivers her first testimony on monetary policy later in the global day today, 11 February 2014. Yellen will speak on monetary policy and the outlook for the US economy for the first time since being sworn in as the central bank's head.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion. The Fed also signaled that it is likely to keep reducing bond purchases in the coming months, citing a pickup in US economic activity and improvement in the US labor market.
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