Todays Market from Equitymaster http://www.equitymaster.com/tm.asp The happenings in the stock markets, including a pre-open and closing commentary. Todays Market from Equitymaster http://www.equitymaster.com/icons/eqtm_small1.gif http://www.equitymaster.com/tm.asp http://blogs.law.harvard.edu/tech/rss Metal & realty in limelight http://www.equitymaster.com/tm/tm.asp?date=7/24/2014&title=Metal--realty-in-limelight
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Indian share markets continued to trade below the dotted line in the post-noon trading session. Sectoral indices are trading mixed with metal and realty stocks being the biggest gainers whereas consumer durables and oil and gas stocks are the major losers.

BSE-Sensex is down 16 points and NSE-Nifty is trading 9 points down. BSE Mid Cap is trading marginally up and BSE Small Cap index is trading up by 0.3%. The rupee is trading at 60.05 to the US dollar.

Power stocks are trading mixed with Torrent Power and Nevyeli Lignite being the major gainers whereas GVK power and Jaiprakash Power are trading in the red. As per a leading financial daily, Tata Power generated 24% higher power output in FY14 at 45,210 million units. The company's total power generation capacity from different fuel sources such as thermal, hydroelectric power, renewable energy and waste heat recovery add up to 8,613 MW. Thermal capacity accounts for a lion's share of more than 80% of overall capacity. Among renewable energy sources, Tata Power's operational capacity stands at 461 MW in wind farms, 54 MW in solar, 447 MW in hydro and 240 MW in waste gas-based generation. By 2022, the company wants to generate 18,000 MW of electricity as well as an additional 4,000 MW of management of distribution networks. Tata Power's stock is presently trading up by 0.4%.

Most of the energy stocks are trading in the red. Losers are being led by Cairn India and Gas Authority of India (GAIL), whereas few stocks like Petronet LNG and BPCL are trading higher. As per a leading business daily, Cairn India plans to step up its exploration programme in a bid to augment its reserves from oil and oil equivalent gas to 7 billion barrels from the earlier estimate of 4.6 bn barrels. As per the company, gas will play an important role in the company's growth going forward as it plans to double its gas output. Also in order to augment and optimize the output the company is planning to deploy innovative technologies. The company is planning to invest USD 200 m over the next three years for developing one of its gas fields and associated infrastructure including gas pipeline. Cairn is trading lower by 6% today.

This article (Metal & realty in limelight) is authored by Equitymaster.

Equitymaster is a leading 'independent' equity research initiative focused on providing well-researched and unbiased opinions on stocks listed on the Bombay Stock Exchange.]]>
Thu, 24 Jul 2014 08:00:00 GMT http://www.equitymaster.com/tm/tm.asp?date=7/24/2014&title=Metal--realty-in-limelight
Energy stocks weigh down markets http://www.equitymaster.com/tm/tm.asp?date=7/24/2014&title=Energy-stocks-weigh-down-markets
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After opening weak, the Indian stock markets have remained below the dotted line in morning session. Among the sectoral indices, maximum buying activity is witnessed in Metal and Banking stocks, while Energy and Pharma stocks are at the receiving end.

The BSE-Sensex is trading down 16 points. The NSE-Nifty is trading down 5 points. The BSE Mid Cap index is trading up 0.2% and the BSE Small Cap index is trading up 0.4%. The rupee is trading at 60.02 to the US dollar.

Software stocks are trading mixed today. While HCL technologies is leading the gainers; Tata Consultancy Services (TCS) is leading the losers. India's fifth largest software firm Tech Mahindra, has announced a big expansion plan in Korea. Tech Mahindra had entered the Korean market in May 2002 and has already acquired significant experience across services lines and industries in the country. The company plans to establish partnerships with local universities, business schools and trade bodies over the next three years while creating local employment opportunities. The company aims to grow in various verticals like Manufacturing, Automobile, Aerospace, Defense, Telecom, Oil & Gas, BFSI and Healthcare. It will operate as a local Korean company in partnership with a Korean conglomerate. The Mahindra Group is already among the largest foreign investors in Korea after the purchase of Ssangyong motors by Mahindra & Mahindra. Tech Mahindra is trading up 1.5% today.

Indian pharma stocks are trading mixed today. Panacea Biotech and Dishman Pharma are among the stock leading the gainers while Ipca labs and Natco Pharma are among the stocks leading the losers. As per a financial daily, Ipca has received six 483s from United State Food and Drug Agency (USFDA) on its Ratlam API facility. As of now the company has voluntarily discontinued the shipments of the APIs in the US markets and looking forward to resolve the issue in next 4-6 months. The company's sales and profit might get impacted. USFDA issued the 483s to the firm's management at the conclusion of an inspection when an investigator had observed conditions that in their judgment might constitute violations of the Food Drug and Cosmetic (FD&C) Act and related Acts in the US. Ipca Labs is trading down by 5.8% today.

This article (Energy stocks weigh down markets) is authored by Equitymaster.

Equitymaster is a leading 'independent' equity research initiative focused on providing well-researched and unbiased opinions on stocks listed on the Bombay Stock Exchange.]]>
Thu, 24 Jul 2014 06:00:00 GMT http://www.equitymaster.com/tm/tm.asp?date=7/24/2014&title=Energy-stocks-weigh-down-markets
Indian share markets open weak http://www.equitymaster.com/tm/tm.asp?date=7/24/2014&title=Indian-share-markets-open-weak
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Barring South Korea (down 0.2%) and Japan (down 0.1%), most major Asian stock markets have opened the day on a firm note with stock markets in China (up 0.8%) and Hong Kong (up 0.4%) leading the gains. The Indian share markets have opened the day on a negative note. Barring FMCG and metal indices, most sectoral indices have opened in the red with stocks in the consumer durables and capital goods space leading the losses.

The Sensex today is down by around 40 points (0.2%), while the NSE-Nifty is down by about 16 points (0.2%). Mid and small cap stocks have also opened in the red with the BSE Mid Cap and BSE Small Cap indices down by around 0.1% each. The rupee is currently trading at Rs 60.18 to the US dollar.

Oil and gas stocks have opened the day on a mixed note with Cairn India and GAIL India Ltd leading the losses. However, Bharat Petroleum Corporation Ltd (BPCL) and Indian Oil Corporation (IOC) are trading firm. Cairn India has announced its financial results for the first quarter of financial year 2014-15 (1QFY15). During the quarter, the company's consolidated net sales increased by 10.3% YoY to Rs 44,828.5 m. Operating profit increased by 4.9% YoY to Rs 30,524.1 m. While depreciation costs increased by 38.6% YoY to Rs 7197.9 m, interest expenses declined sharply from Rs 104.5 m in 1QFY14 to 16.5 m in 1QFY15. Net profit before exceptional items stood at Rs 27202.9 m, lower by 13% YoY. There was an exceptional loss of Rs 16,273.9 m during the quarter arising due to additional depreciation charges on account of change in method of depreciation on of its oil and gas assets from 'straight line method' to 'unit of production'.

Paint stocks have opened the day on a weak note with Asahi Songwon, Berger Paints and Kansai Nerolac leading the losses. Paint manufacturer Kansai Nerolac has announced its financial results for the first quarter of financial year 2014-15 (1QFY15). During the quarter, the company's net sales increased by 16.6% YoY to Rs 9,210.7 m. Operating profit increased by 15.4% YoY to Rs 1,169.9 m. Other income shot up from Rs 36.9 m in 1QFY14 to 78.1 m in 1QFY15. At the bottomline level, net profit increased by 19.8% YoY to Rs 729.8 m. Net profit margin expanded marginally from 7.7% in 1QFY14 to 7.9% in 1QFY15.

This article (Indian share markets open weak) is authored by Equitymaster.

Equitymaster is a leading 'independent' equity research initiative focused on providing well-researched and unbiased opinions on stocks listed on the Bombay Stock Exchange.]]>
Thu, 24 Jul 2014 04:00:00 GMT http://www.equitymaster.com/tm/tm.asp?date=7/24/2014&title=Indian-share-markets-open-weak
Can new airlines save Indian aviation? http://www.equitymaster.com/tm/tm.asp?date=7/24/2014&title=Can-new-airlines-save-Indian-aviation
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India's aviation sector is financially in the doldrums. A myriad of issues plague the sector. Intense competition, bureaucratic hurdles and high cost of fuel are just some of the main problems. On top of this, there exists a complex regulatory and taxation structure in India. The Centre for Asia Pacific Aviation (CAPA) has pegged the combined losses for the industry at US$ 1.77 bn in FY14. The accumulated losses for the eight Indian carriers over the last seven years stand at an enormous US$ 10.6 bn. It's no wonder that .

Has the government obliged? In its first big policy move, the civil aviation ministry has given the go ahead to six new airlines. What's more, the ministry has identified 50 locations around the country to set up low cost (no-frills) airports. Many of these airports are planned in tier 3 and tier 4 towns. These moves are expected to give a boost to air connectivity and improve the prospects of the tourism sector. However, a closer look tells us that a lot more needs to be done.

For one thing, no major reforms have been proposed. Currently, no blueprint exists to set up a no-frills airport. Yet the government has estimated the cost of setting up one will be Rs 700-800 m. We wonder how the government arrived at these figures. Important issues relating to land, security and road connectivity have also not been addressed. While the announcements must be taken in the right spirit, we would like the government to be more proactive.

For example, India has a regional airline policy. However, most regional airlines have either failed or are struggling financially. The policy is not conducive to small low cost airlines. It is not possible to profitably operate a regional airline while facing the same issues as a national carrier. Also, would regional airlines like to fly to far flung areas where the demand may not exist? The government should move decisively with reforms to encourage investments.

The sector is also affected by overcapacity. This has led to huge discounts being offered to fill up empty seats. Air Asia and Tata-SIA have also entered India. In such a situation, six new airlines will only add to the competition. If the new six airlines start another price war, it will increase to the financial woes of the sector. Considering the huge debt burden that the sector is under, we believe that India cannot afford another Kingfisher like disaster. Hopefully the government is listening.

Do you think that the new proposals will benefit the aviation sector? Do share your views on the Equitymaster club.

This article (Can new airlines save Indian aviation?) is authored by Equitymaster.

Equitymaster is a leading 'independent' equity research initiative focused on providing well-researched and unbiased opinions on stocks listed on the Bombay Stock Exchange.]]>
Thu, 24 Jul 2014 03:00:00 GMT http://www.equitymaster.com/tm/tm.asp?date=7/24/2014&title=Can-new-airlines-save-Indian-aviation