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PSU Stocks Tumble
Tue, 23 Feb Closing

The Indian equity markets snapped their four-day winning streak today The BSE Sensex closed the day with losses of over 379 points while the NSE-Nifty lost 125 points. S&P BSE Mid Cap and S&P BSE Small Cap indices also underperformed the market with mid cap stocks falling about 1.5% while smallcap stocks fell about 1.3%. All the sectoral indices finished below the dotted line. PSU and realty stocks snapped over 2%.

Majority of the Asian stocks lost momentum today with stocks in China leading the losses. The Shanghai Composite is down 0.81% while Japan's Nikkei 225 is off 0.37%. Hong Kong's Hang Seng is lower by 0.25%. European markets also retreated in early trade with shares in Germany off the most. The DAX is down 0.86%, while London's FTSE 100 is off 0.59% and France's CAC 40 is lower by 0.09%. The rupee was trading weak at Rs 68.64 against the US$ in the afternoon session.

According to a leading financial daily, Thermax has received an order worth Rs 3.53 billion from Rashtriya Chemicals and Fertilizers (RCF) to execute an energy efficiency improvement project. The company will commission a 50 MW gas based co-generation plant at RCF's facility in Thal (Maharashtra) for captive power. It will also install waste heat recovery boilers downstream of the turbines to provide required steam for process.

The scope of supply includes two 25 MW each gas turbines and 2X100 TPH waste heat recovery boilers, besides civil works, balance of electrical, mechanical and instrumentation works. The project is to be completed in 22 months

Thermax, a leading energy and environment solutions provider, is one of the few companies in the world that offers integrated innovative solutions in the areas of heating, cooling, power, water and waste management, air pollution control and chemicals. Thermax recently announced its third quarter (3QFY16) results. During 3QFY16, both topline and bottom line fell by 11% YoY (Subscription Required).

In another development, Blue Star is in the process of setting up two major facilities to redesign and augment its manufacturing footprint. These will be located at Samba in Jammu and Sri City in Andhra Pradesh. Further, the company is planning to invest Rs 1.25 billion over the next three-four years towards this exercise, which will increase its overall production capacity to a million units towards the final phase. Blue Star finished the trading day down by 0.8% on the BSE.

The global economic crisis and the Chinese slowdown has dealt a heavy blow to demand for Indian engineering products. India's engineering exports to its neighboring countries, including China, have seen a massive fall in 2015. Over the last eight years, the engineering sector has seen numbers ranging from an output growth of 48% YoY in one year, to a contraction of 6% YoY in another. In our recent edition of The 5 Minute Wrap Up Premium, we have explained what factors should one take into consideration when picking an engineering company stock (Subscription Required).

Mining stocks languished in red today with Ashapura Minechem and Coal India bearing majority of the brunt. According to an article in The Economic Times, Coal India's supply of coal to the power sector increased by 6.7 to 336 million tonnes during the first 10 months of the ongoing fiscal. The company, which accounts for over 80% of the domestic coal production had dispatched 314.8 million tonnes (MT) of the dry fuel during April-January in the previous fiscal. This comes at a time when the government aims to provide round the clock electricity in the country.

Strong emphasis on increasing coal production has resulted in a record 9.8% growth in Coal India's coal production and highest ever output of coal. This has also led to reduced imports of coal.

The government is eyeing to achieve 1.5 billion tonnes of coal production by 2020. Of this, Coal India is looking at an output target of one billion tonnes. Reportedly, the government is also aiming to provide 24x7 power by 2019 by creating cost-effective infrastructure which will be sustainable and inclusive of clean energy solutions. Meanwhile, Coal India's net profit rose by 14% YoY (Subscription Required) during the December 2015 quarter.

After much deliberation and delay, the Mines and Minerals (Development and Regulation) Act, 1957 has been revised and the government has passed the Mines and Minerals Amendment Bill, 2015. In our recent edition of The 5 Minute Wrap Up Premium, we have looked at the impact of the Act on various mining and metal companies (Subscription Required).

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Nov 24, 2017 03:37 PM

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