The Indian stock market lost its gains during the previous two hours of trade due to selling pressure in heavyweights and is now trading in the red. Stocks from the healthcare, metal, oil & gas and PSU space are leading the pack of losers, while those from the capital goods and software sectors are trading firm.
The BSE-Sensex is trading down by 68 points, while NSE-Nifty is trading 23 points below the dotted line. BSE Midcap index is down 0.1%, while BSE Small cap index is trading up by 0.1%. The rupee is trading at 44.95 to the US dollar.
Power stocks are trading mixed with Reliance Infrastructure, Reliance Power, and Power Grid Corporation leading the pack of gainers. However, Coal India, CESC Ltd and Neyveli Lignite are trading weak. As per a leading financial daily, Reliance Infrastructure has decided not to bid for small road projects even at the cost of losing market share. The reason is that company expects high competition may dent profitability in such projects. The company aims to bag 8-10% of highway projects of up to Rs 800 bn that are likely to be awarded every year. In line with the new decision, it will bid only for projects worth Rs 15 bn - 20 bn and above as these are expected to be less impacted by high competition and lower-than-expected traffic unlike the low cost projects. The company's strategy is to focus on financials and it will not bid for projects that offer less than 20% return on equity. However, it is open to acquisitions of road projects of all sizes if valuations look attractive.
As per a leading news website, NTPC aims to double growth in power generation capacity in FY12. The management is confident of achieving an additional capacity of 5 gigawatt (GW) this year. The company has already applied for additional gas supplies which will boost up its plant load factors (PLF). The PLFs for FY12 are expected to be around more than 90. The company had indicated backing down of 13 bn units from State Electricity Boards to be a reason for weak PLFs last year. That still remains an area of concern. The management also said that it expects coal supplies to improve this fiscal as soon as logistics issues sort out. It expects to receive 140 m tonnes of coal from Coal India next year. This is against a requirement of 166 m tonnes. The rest has already been tied up for imports. The company does not expect coal prices to increase if Coal India supply remains as what they have committed. The stock of the company is trading weak.