The Indian benchmark indices rose to higher levels on the back of buying activity during the previous two hours of trade. While the consumer durables, power and capital goods sectors are seeing buying interest, select stocks from telecom, healthcare and IT sectors are seeing selling pressure.
BSE Sensex and NSE Nifty are trading in the green, up by 90 points and 25 points respectively. The BSE-Midcap and BSE-Smallcap are trading up by 0.8% and 1.4% respectively. The rupee is trading at 46.66 to the dollar.
As per reports in a leading business daily, engineering behemoth BHEL is set to miss its capacity addition target yet again. This may have a cascading effect on power generation companies as well. Power projects of companies such as NTPC and other state-run utilities may get delayed by at least three months due to BHEL's tardiness in readying its new capacity. BHEL had earlier set a goal of increasing its manufacturing capacity to 15,000 MW by December 2009 from its current capacity of 10,000 MW. But reports state that the management of the company has expressed that they are facing some financial problem due to which delivery of some critical machinery has not been made by the foreign firms. And thus, they would need another 3 months to get their increased capacity in place.
India's Planning Commission is also unhappy with BHEL's performance as many Indian power utilities have in the past complained of delayed delivery of power equipment. Infact, the Planning Commission has gone as far as to say that BHEL's project management skills are poor. This lack of promptness on the part of the company on such an important issue is not only bad news for the country's power addition targets, but is also affecting the company's own revenues and reputation adversely. Many of the private power firms have already shifted their preference away from BHEL by placing a large quantity of their orders with Chinese firms because of their ability to deliver orders in a shorter duration as compared with BHEL. Indeed, a sad state of affairs in a country plagued by power shortages. BHEL is trading flat on the bourses currently
As per a leading business daily, cement major Madras Cements has decided to cancel its plans to enter the sugar business. The company recently concluded that cane development would be a big task for it in light of the declining area under sugar cultivation and competition from other sugar mills. Moreover, it now plans to focus its resources in strengthening its core business of cement. It may be noted that the company had earlier planned to diversify into the sugar sector by setting up a greenfield plant in Thirukovilur, along with cogeneration of power and an alcohol plant. This was with a total investment of Rs 4.5 bn. We believe that the company's move to focus on its core area of strength is a positive move for shareholders. The stock of Madras Cements is trading flat currently.