Thursday, 23 November 2017

Security and Intelligence Services soars 15% post Q2 Results

Security and Intelligence Services (India) soared 15% to Rs 1,029 on the BSE after the company reported more than four-fold jump in net profit at Rs 58.9 crore in September quarter (Q2FY18), on the back of higher other income. It had logged profit of Rs 2.13 crore in the same quarter a year ago.

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The company’s revenue from operations grew 35.7% at Rs 1,460 crore against Rs 1,076 crore in the corresponding quarter of previous fiscal. Other income increased by 12 times to Rs 24.5 crore from Rs 2.1 crore in previous year quarter.

EBITDA (earnings before interest, taxes, depreciation and amortization) margin improved to 5.07% in Q2FY18 from 4.5% in Q2FY17.


Neuland Laboratories Dips 8% on Disappointing Q2 Earning

Neuland Laboratories has dipped 8% to Rs 1,175 on the BSE in intra-day trade after the company reported 75% decline in its standalone net profit at Rs 2.59 crore in September quarter (Q2FY18), due to lower sales. The pharmaceutical company had profit of Rs 10.23 crore in the same quarter year ago.

Total operating income decreased by 17% to Rs 126 crore in Q2FY18, as compared to Rs 152 crore in the corresponding period of the previous year. EBITDA (earnings before interest, taxes, depreciation and amortization) margin fallen to 11.6% in Q2FY18 as against 16.6% in Q2FY17.

“The performance of this quarter was impacted due to lower than expected sales in Ciprofloxacin, Salmeterol and a product in the CMS segment. Also, the company continues to face capacity constraints in Unit- 1 that prevented it from delivering more orders this quarter,” said Sucheth Davuluri, Vice-Chairman and CEO, Neuland Laboratories.

The Board has given an in-principle approval to acquire a registered facility and we believe that this process when consummated will address capacity constraints as well as our growth aspirations, added Sucheth Davuluri.
At 10:23 AM; the stock was down 7% at Rs 1,188 on the BSE, against a marginal 0.02% rise in the S&P BSE Sensex. A combined 27,159 shares changed hands on the counter on the NSE and BSE.

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SAIL Raises its Game after Government Cracks Whip

State-run Steel Authority of India Ltd (SAIL) is heading for a turnaround this year as the government orders belt-tightening and asset disposals at the loss-making 63-year-old mill.

“This year we’re expecting some cash profit to come into SAIL,” Aruna Sharma, secretary at the steel ministry, said in an interview in New Delhi. The ministry has directed the company to better compete with private mills in the race to meet the nation’s growing demand, she said.

SAIL is forecast this fiscal year to report positive free cash flow for the first time since 2009, according to data compiled by Bloomberg. It’s not expected to see net income head back into the black until fiscal 2019. SAIL didn’t respond to phone calls seeking comments.

In addition to appointing Boston Consulting Group, the ministry has set up a panel to revive the fortunes of SAIL in line with steel minister Birender Singh’s directive for officials to play a more active role in turning around plants. These moves come as publicly traded JSW Steel Ltd reported seven straight quarters of profit and Tata Steel Ltd swung to second-quarter profit.

“We see an improvement but that improvement has to be accelerated,” Sharma said on Tuesday. “They have to go a long way.”

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Rising competition

External pressure is building on SAIL. State-run Indian Railways recently issued a global tender for purchasing rails outside its traditional supplier SAIL, opening the doors to private steel producers like Jindal Steel & Power Ltd to compete in the local market.

“Gone are the days when SAIL was a monopoly,” Sharma said. “They have to be capable of standing up to competition.”
SAIL has about $6 billion of debt and a workforce of about 82,964 people as of 31 March, more than the combined of 46,837 employees at Tata Steel and JSW Steel.

The company has identified employee costs as one of the key drags on profits and has been trying to trim numbers through voluntary retirement programs. It paid out about Rs220 crore ($33 million) as compensation under the program in the six months of this fiscal year started 1 April.

“Having more employees cannot be the excuse,” Sharma said, adding that the company wouldn’t seek to replace positions left empty by retiring employees.

SAIL, which traces its origins to Hindustan Steel Pvt. Ltd that was set up in 1954, has five integrated steel plants, three special steel plants, and one subsidiary in the country. The steel ministry will be calling for expression of interests before the end of December for disinvestment of the plants in Salem, Durgapur and Visveswaraya as part of the central government’s sale of state-run assets, Sharma said.

Analysts though remain wary about the company’s prospects, with 20 out of 24 of them having a Sell call on the stock. “Despite SAIL’s modernization plan and expected higher volumes, going forward, we believe that it needs to continue effective cost cutting measures to be able to be back in the black,” Kunal Motishaw, an analyst at Reliance Securities Ltd, said in a report last week. Bloomberg


Friday, 17 November 2017

Asian stocks open higher; GTL Infrastructure in News


Asia tracks US market gains

Asian markets gained in the morning trade, tracking the markets in the US. Overnight, stocks in the US closed higher on earnings. S&P 500 at 2,585 points is up 0.8%.

Cash holding by mutual funds in equity portfolio drops to lowest level since June.

Mutual funds’ cash holding as a percentage of their total equity portfolio fell to the lowest in four months in October, as fund managers pumped money into a spate of public offerings, reports Mint.

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Hong Kong’s SSG Cap buys 34% in Cox & Kings UK unit

SSG Capital bought a 34.4% stake in Cox & Kings’ overseas unit Holidaybreak at an enterprise value of $800 million (Rs5,225 crore), reports The Times of India.

Four companies bid for stake in GTL Infrastructure

Lenders to GTL Infrastructure have received bids from four companies for buying up to 58% stake in the telecom tower company, reports The Economic Times.

IRPs initiate fresh forensic audit of Essar Steel, Bhushan Steel accounts

Insolvency professionals of Essar Steel Ltd and Bhushan Steel Ltd have initiated fresh forensic audits of these companies’ accounts following the recent changes in rules introduced by the bankruptcy regulator, reports Mint.


Raymond focuses on Park Avenue, Premium to revive consumer goods business

Apparel and textile maker Raymond Ltd is focusing on its Park Avenue brand of male grooming products and home care brand Premium to revive its consumer packaged goods business, reports Mint.

Idea Cellular to take Rs300 crore hit due to reduction in IUC

The 57% cut in interconnect usage charges (IUC) can hit Idea Cellular’s operating income by around Rs300 crore over the next six months, reports The Economic Times.

CARE downgrades Aircel loans to ‘default’ grade

CARE Ratings downgraded Aircel’s long-term loans to “D”, default grade, from “BB+” on account of the delays in servicing debt obligations, reports Business Standard.

Ready-made garment exports drop 41% in October

After rising around 25% in September, exports of ready-made garments dropped nearly 41% in October, primarily due to ambiguities in the goods and services tax (GST), reports Business Standard.

Finance minister hints future fiscal deficit targets may be recalibrated

Finance minister Arun Jaitley has hinted that while there was no immediate threat of missing the fiscal deficit target for the fiscal year ending 31 March, future targets may be recalibrated, reports Mint.

Thursday, 16 November 2017

NCC Rises 4%, Macquarie Maintains outperform Rating with Target Rs 125

Shares of NCC rose nearly 4 percent intraday Thursday as global research firm Macquarie has maintained outperform rating with a target Rs 125 per share.

The house expect strong revenue growth in FY19, which will lead by strong execution.

In the quarter ended September 2017 the company’s net profit declined 60.8 percent at Rs 20 crore against Rs 51 crore in the same quarter last fiscal.


Revenue was down 33 percent at Rs 1,300 crore versus Rs 1,947.9 crore.

The operating profit (EBITDA) was down 27 percent at Rs 124 crore, while EBITDA margin was up 80 bps at 9.6 percent.

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Rupee opens Marginally lower Against US Dollar

The Indian rupee on Thursday weakened marginally against the US dollar in the opening trade.

The rupee opened at 65.26 a dollar. At 9.15am, the home currency was trading at 65.31 against the dollar, down 0.16% from its Wednesday’s close of 65.21.

The 10-year bond yield was at 7.010% compared to its previous close of 7.017%. Bond yields and prices move in opposite directions.

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The benchmark Sensex index rose 0.16%, or 54.02 points, to 32,814.46 points. So far this year, it has gained 24%.

So far this year, the rupee has gained 4.16%, while foreign institutional investors have bought $7.69 billion and $22.37 billion in equity and debt, respectively.

Asian currencies were trading mixed. China renminbi was down 0.18%, Malaysian ringgit 0.10%, Japanese yen and China offshore were down 0.08% each. However, South Korean won was up 0.63%, Taiwan dollar 0.11% and Philippines peso 0.05%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 93.872, up 0.06% from its previous close of 93.813.


Market Live: Sensex opens 150 points Higher, Nifty Trades above 10,150

The BSE Sensex opened over 150 points higher on Thursday against the previous session’s closing. The broader NSE’s Nifty, too, rose in the morning hours. The Indian rupee opened marginally lower against the US dollar. The shares of Reliance Industries Ltd, Tata Motors and Larsen & Toubro rose, whereas the shares of Coal India and Adani Ports fell.

■ 9.26am: BSE Sensex opened higher by 132.36 points, or 0.40%, to 32,892.80, while the Nifty 50 rose 36.20 points, or 0.36%, to 10,154.25.

■ 9.23am: Anil Dhirubhai Ambani group companies falls further after Reliance Communications said it is not making any payment to lenders for time being. Reliance Communications fell 4%, Reliance Naval and Engineering 4.2%, Reliance Capital fell 1%, Reliance Power 1%, Reliance Infrastructure fell 0.5%.

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■ 9.20am: Religare Enterprises Ltd hits 10% upper circuit for second sessions. The company on Tuesday said that its board has named S. Lakshminarayanan as its new executive chairman.

■ 9.17am: Videocon Industries Ltd hits 5% upper circuit for third sessions. The stock gained nearly 16% in the last three sessions and so far this year it fell 85%.

■ 9.15am: The rupee opened at 65.26 a dollar. At 9.15am, the home currency was trading at 65.31 against the dollar, down 0.16% from its Wednesday’s close of 65.21.

■ 9.13am: The 10-year bond yield was at 7.010% compared to its previous close of 7.017%. Bond yields and prices move in opposite directions.

■ 9.10am: Asian currencies were trading mixed. China renminbi was down 0.18%, Malaysian ringgit 0.10%, Japanese yen and China offshore were down 0.08% each. However, South Korean won was up 0.63%, Taiwan dollar 0.11% and Philippines peso 0.05%. The dollar index, which measures the US currency’s strength against major currencies, was trading at 93.872, up 0.06% from its previous close of 93.813.

Wednesday, 15 November 2017

Market Live: Sensex opens below 33K, Nifty Mildly lower

Equity benchmarks opened mildly lower on Wednesday, tracking subdued global cues following correction in metals and crude oil prices.

The 30-share BSE Sensex was down 41.86 points at 32,900.01 and the 50-share NSE Nifty fell 16.70 points to 10,169.90.

Sun Pharma, Lupin, Vedanta, Hindalco, NALCO, Bajaj Finance, Bharti Infratel and GAIL were early losers while HPCL, BPCL, TCS, Ambuja Cements and Dr Reddy's Labs were early gainers.

Rain Industries, HEG, Graphite India, Goa Carbon and Phillips Carbon plunged 5 percent.

After earnings, Waterbase, MOIL, Panacea Biotec and Cox & Kings gained 4-6 percent while Corporation Bank, Indiabulls Real, CEAT and JK Tyre lost 1-5 percent.
Fortis Healthcare and Religare Enterprises rallied 3-5 percent post deal.

Jet Airways was up 1 percent as stock is out of NSE F&O ban and ahead of analysts' meet.

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The cautious sentiment from the last session continued through Asia's today's trading day, with energy-related plays in the region falling on weakening oil prices.

China's Shanghai Composite, Hong Kong's Hang Seng, Japan's Nikkei, Australia's ASX 200 and South Korea's Kospi were down 0.3-0.8 percent.

The US markets also closed lower, with the Dow Jones, S&P 500 and Nasdaq Composite falling 0.1-0.3 percent. Concerns about a potential global economic slowdown and US tax reform dampened investor sentiment.

SBI Begins Process to sell Rs1,580 crore of Bad loans

State Bank of India (SBI) has initiated the process of selling Rs1,580 crore of bad loans to financial institutions, including asset reconstruction companies (ARCs).

The bank has put on block 11 non-performing assets (NPA) for sale through a bidding process, according to a tender on the bank’s website.

“Right now, interested parties are conducting due diligence. Once that is completed, the bidding process will take place later this month,” a person in the know said on condition of anonymity. Last month, the country’s largest lender put Rs3,554 crore of bad loans up for sale. In that auction, it received bids only for a portion of the total; SBI is awaiting final approvals to go ahead with the sale, said a second person, who also requested anonymity.

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In the first half of fiscal 2018, the bank managed to sell Rs763 crore of bad loans to ARCs.

“ARC sale has not been significant in these (first) two quarters. I think now, with the insolvency and bankruptcy code in the picture, the whole strategy, particularly around corporate cases, more and more probably get referred to the NCLT (National Company Law Tribunal),” SBI chairman Rajnish Kumar said in an earnings call on 10 November. “But any large or mid-sized corporate, we believe we will be able to handle it better than ARC.”

Kumar said SBI sells assets only when it is able to get an intended price.

According to experts, most banks are seeking all-cash deals or those with higher cash component in case of a sale to ARCs. This is because from the beginning of this fiscal, if a bank invests in more than 50% of security receipts created against the sale of its own stressed assets, it has to set aside more money as provision. From 2018-19, this threshold of 50% will be reduced to 10%.

Sun Pharma’s Q2 profit falls 59.7% on weak US sales

Sun Pharmaceutical Industries Ltd, India’s largest drug maker, reported a 59.7% decline in fiscal-second quarter profit because of weak US sales.

Net profit declined to Rs1,001.79 crore in the three months ended 30 September from Rs2,487.89 crore a year ago. Sales fell 15% to Rs6,590.06 crore.

Bloomberg poll of 22 analysts had estimated Sun Pharma’s September profit at Rs800.40 crore and sales at Rs6,803.90 crore.

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“A challenging US generic pricing environment coupled with continued investments in building our global specialty business has impacted our Q2 performance,” Dilip Shanghvi, managing director of the company, said in a statement.

Sun Pharma invested Rs511 crore, or 7.7% of its sales, in research and development (R&D) in the September quarter.
This includes investments on account of funding the clinical development of its global specialty pipeline, the company said.

In a conference call with analysts, Shanghvi said a delay in the approval of certain important products in the US due to regulatory issues at the company’s manufacturing unit in Halol, Gujarat, has also affected US business.

The US Food and Drug Administration (FDA) had issued a warning letter to the Halol unit in December 2015 for violation of good manufacturing practices. Since then, new product approvals have been held back by the regulator. “There are no new updates on Halol. We are awaiting re-inspection from the US FDA. Site transfers for some products from the facility ongoing,” Shanghvi said.

The company’s sales in the US, which contributed 30% to the total revenue, fell 44% to $309 million in the quarter due to pricing pressure in existing products and lower contribution from generic of cancer drug Gleevec.

In the same period last year, Sun Pharma had benefited from marketing exclusivity for Gleevec generic.