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The majority of Asian markets are closed. Stock markets in the US ended their previous session on a firm note. Meanwhile, share markets in India have opened the trading day on a flattish note. The BSE Sensex is trading up by 4 points while the NSE Nifty is trading lower by 13 points. The BSE Mid Cap index and BSE Small Cap index both have opened the day up by 0.2%.
The rupee is trading at 68.20 to the US$. Sectoral indices have opened the day on a mixed note with IT and metal stocks witnessing maximum selling pressure. While FMCG and healthcare stocks are among the top gainers on the BSE.
FMCG stocks have opened the day on a mixed note. Huhtamaki PPL Ltd and Archies Ltd are the most active stocks in this space. According to an article in The Economic Times, ITC Ltd is planning to enter healthcare business in India and has sought shareholder approval for the same.
Reportedly, the board of directors of the company at its meeting recommended an alteration of the objects of the clause of its Memorandum of Association to include Healthcare. The move comes on the back of company's ambition to position itself as one of India's most valuable corporations.
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One must note that, Healthcare is a lucrative business in India and is likely to witness a significant growth in the coming years. Going forward, whether the decision to change the clause will prove to be a game changer and further reduce ITC's dependence on tobacco business will be the key thing to watch out for.
Meanwhile, ITC reported quarterly results for the December quarter. ITC's standalone net profit grew 5.71% year-on-year to Rs 26.4 billion for the third quarter of FY16 as its revenue from operations rose by 4.52% y-o-y amid lower consumer offtake and reduction in trade pipelines due to cash crunch post the government's demonetisation move. Total income from operations was up 4.7% at Rs 135.7 billion.
Cigarette sales accounted for more than half of ITC's total income, which rose to Rs 82.9 billion from Rs 81.1 billion in the year-ago period. The performance of the cigarette business during the quarter was subdued on account of tight liquidity conditions prevailing in the market and continued regulatory and taxation pressures on the legal cigarette industry in India (Subscription required), the reports noted.
Moving on to the news from stocks in energy sector, Oil and Natural Gas Corporation (ONGC) has signed a memorandum of understanding (MoU) with the Andhra Pradesh government for investing US$5.1 billion in developing oil and gas finds off the state's coast by 2019-20.
Reportedly, the project envisages bringing to production 10 oil and gas discoveries in the Bay of Bengal block KG-DWN-98/2 (KG-D5). First gas production will take off by June 2019 and oil would start flowing from March 2020. Gas from the offshore field will be brought via sub-sea pipeline to the State before being transported to end users. Further, gas output is slated to peak to 16.7 million standard cubic meters per day by the end of 2021.
In the meanwhile, ONGC is investing Rs 780 billion in the Krishna Godavari basin for producing hydrocarbons and has signed an agreement with the Andhra Pradesh government for smooth execution of the projects.
ONGC is very aggressively pursuing to put the huge gas reserves it has discovered in KG basin, to production. It plans to invest about Rs 100 billion for exploration and production activities in onland blocks and about Rs 680 billion in offshore assets in the KG Basin.
As per the deal, the state government will assist ONGC in taking over land and in obtaining other statutory clearances. The agreement with Andhra Pradesh to take forward all critical exploration and production activities in the state was signed on the sidelines of the Partnership Summit, 2017 jointly organized by the state government and industry chamber Confederation of Indian Industry (CII) in Visakhapatnam, the reports noted.
ONGC share price opened the day up by 0.3%.
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