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April 1, 2009
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 BSE-30! 9,902  (+193)
Top Gainers Apr 1, 2009 (Close)
RANBAXY 178.40 7.73%
HDFC 1,505.80 6.70%
REL. INFRA 549.55 6.64%
DLF LIMITED 176.70 5.68%
ICICI BANK 349.45 5.07%
 NSE-50! 3,060  (+39)
Top Gainers Apr 1, 2009 (Close)
SUZLON 46.55 9.92%
RANBAXY 178.50 7.72%
UNITECH 37.35 7.02%
REL. INFRA 550.00 6.68%

Top Losers
SUN PHARMA 1,065.30 -4.23%
BHEL 1,472.05 -2.15%
GRASIM 1,547.90 -1.83%
BHARTI AIRTEL 615.05 -1.72%
STERLITE IND. 351.35 -1.21%
Top Losers
SUN PHARMA 1,065.45 -4.14%
SIEMENS 257.75 -3.86%
POWER GRID CORP. 91.95 -3.82%
BPCL 364.80 -2.99%
HERO HONDA 1,039.75 -2.93%

Top Gainers and Losers in other Indices | Result Scoreboard | Results of the Equitymaster Investor Survey

Best Performing
Stocks & Funds
Wednesday 1st April, 2009
Fiscal starts on a positive note

The markets continued their upwards surge as buying activity intensified during the final hour of trade. The BSE-Sensex closed with gains of around 190 points, while the NSE-Nifty closed higher by about 40 points. Stocks from the mid-cap and small-cap space ended the day in the green as well. Buying activity was witnessed in stocks across sectors led by realty, IT and energy. However, stocks from the healthcare and FMCG bore the brunt of profit booking.

Most other Asian markets ended on a firm note. The European indices are currently trading weak. Rupee was trading at 50.68 against the US dollar at the time of writing.

Software stocks ended the day on a firm note led by NIIT, Infosys, Satyam and Wipro. As per a leading business daily, top Indian software companies are competing for BSNL’s Rs 60 bn (US$ 1.2 bn) outsourcing contract. It is believed that TCS, Infosys, Wipro, Tech Mahindra, Spanco Telesystems, HCL Infosystems and Satyam are in the race for the contract. The contract has an estimated budget of Rs 15 bn for each zone (north, south, east and west). While a few have bid for all four regions, the others have bid for selected regions. It may be noted that Indian IT firms have increased their focus on Indian market significantly since the global markets have been hit by the economic slowdown. Despite the global slump, Gartner believes that Indian companies’ IT budgets are still expected to grow. It further believes that the revenues from the government projects in India are expected to go up dramatically over the next two years as the government’s IT spends are estimated to touch levels US$ 4 bn.

NTPC has signed a Memorandum of Understanding (MOU) with Ministry of Power for generating 217 bn units of electricity during FY10. In addition, the MOU also includes targets of important milestones relating to project completion schedule of ongoing power projects, coal mining activities, total quality management, human resources development and business development activities. Also the company had successfully synchronized the second 250 MW unit of Bhilai expansion power project of NTPC SAIL Power Company Ltd, a 50: 50 joint venture of NTPC and SAIL. With the commissioning of this unit, NTPC now has 30,000 MW of capacity. It may be noted, that the company has outlined an aggressive capacity addition plan for the eleventh five-year plan (2007-12), wherein it plans to add around 22,400 MW of new generation capacity.

As per the provisional information issued by the Ministry of Commerce, the exports during the month of February declined by 22% on a year on year basis. The imports were also lower by 23% YoY for the same period. The lower imports have narrowed the trade deficit by as much as 27%. It may be noted that major component of import bill is related to the requirement of the hydrocarbon energy. With RIL’s KG basin gas expected to flow during the month and production of oil from Cairn’s Rajasthan field in a month, India’s import bill is expected to be significantly lower during the current fiscal.

Markets in Motion

2:30 pm
New launches aid auto stocks

The markets continued to witness volatility during the previous two hours of trade. Stocks from the FMCG sector are leading the pack of losers, while select stocks from the realty and energy sectors are trading firm. The overall decline to advance ratio is poised at 2.7 to 1 on the BSE currently.

The BSE Sensex and NSE Nifty are trading higher, up by almost 136 points and 15 points respectively. However, the BSE Midcap and Smallcap indices are trading higher by 1.5% and 2.5% respectively. The rupee is trading at 50.67 to the dollar.

Hero Honda and TVS Motors announced their motorcycle and scooter sales for the month of March. Aided by the introduction of new models & variants and expansion into new regions, both the companies have been able to achieve higher sales. Hero Honda’s sales were higher by 10% YoY with 353,342 units in March, up from 320,594 in March last year. It sold 3.7 m vehicles in FY09, up 12% from about 3.3 m units in FY08. TVS’s two wheeler sales for the month of March grew 4.2% YoY to 121,988 vehicles, up from 117,045 in the same period last year. While Hero Honda is trading lower, TVS is currently trading higher on the bourses.

As per a leading business daily, BHEL and Bharat Electronics (BEL) have signed a memorandum of understanding (MoU) to form a JV for solar photo voltaic business with a capacity of 250 MW. The JV will look at setting up a manufacturing facility for silicon wafers, solar cells and modules. It will also seek to identify suitable vendors and partners for the supply of raw materials for the business. The JV plans to cater to both the export and the domestic markets. The companies seek to leverage government incentives for solar energy to make it economically viable and address the high capital costs. The JV will also scout for a suitable technology partner. This venture will help BHEL strengthen its presence in the solar power equipment segment in which it currently has minimal presence. The stock of BHEL is currently trading lower.

12:30 pm
Realty and metals lead the foray

The indices surged into the positive territory as buying activity was witnessed at lower levels during the previous two hours of trade. The stocks from the realty, banking and metals sectors are trading higher, while select FMCG and telecom stocks are trading weak. The overall advance to decline ratio is poised at 2.9 to 1 on the BSE.

The BSE-Sensex and NSE-Nifty indices are trading higher, up by 100 points and 20 points respectively. The BSE-Midcap and BSE-Smallcap indices are also trading higher, up by 2% and 2.5% respectively. The rupee is trading at 50.74 to the dollar.

Textiles stocks are trading firm led by Raymond and Arvind Ltd. As per a leading business daily, Raymond plans to open 50 stores in the accessory segment in the next six months. It currently has 10 stores in India. It may be noted that the company’s export business is not doing well and is incurring losses. The company has also decided to shut down its denim operations in the US and Belgium. On the other hand the domestic businesses have been profitable and hence the company plans to focus more on the domestic front. Due to low investment in the accessories segment, the company is looking at increasing its presence. Raymond’s accessories segment currently contributes to around 10% of the total revenues, which is expected to grow at 30% during FY10.

Packaging stocks are also trading firm led by Essel Propack and Paper Products. Essel Propack announced its CY08 results late evening yesterday. It reported a standalone topline growth of 8% YoY during CY08. On a consolidated basis, the topline grew by 8% YoY. The company’s input costs were impacted on account of sharp rise in polymer prices with crude touching record highs in the first half of the fiscal. Further, with the company not having the bargaining power, there was a lag effect in passing the price hike. The company, however, reported better margins for the full year as compared to 9mCY08 (11.3%) performance on account of decline in crude prices in the last quarter. Lower operating margins, higher interest costs and forex losses on account of devaluation of the rupee against other currencies led to the overall bad performance. On the consolidated basis, the company reported losses to the extent of Rs 895 m (excluding the extraordinary item).

10:30 am
Wockhardt's debt woes, stock down

The Indian markets started the day’s proceedings on a subdued note. While stocks from the consumer durable, realty and metal sectors are garnering investors’ interest, select stocks from the pharma and FMCG sectors are at the receiving end. The overall advance to decline ratio is poised at 2.2 to 1 on the BSE. As regards the global markets, the US market and European markets ended in positive territory yesterday. The Asian markets are currently trading mixed.

The BSE Sensex and the NSE Nifty are trading lower, down by around 156 points and 35 points respectively. However, the BSE Midcap and Smallcap indices are trading higher, up by 1% each. The rupee is trading at 50.72 to the dollar.

Steel stocks are trading firm led by JSW Steel and Tata Steel. As per a leading business daily, despite the current economic slowdown SAIL is expected to produce 12 m tonne of saleable steel during FY10. The production plans for the company were formalised through a memorandum of understanding (MoU) for FY10 with the Ministry of Steel. The company is also likely to produce over 3 m tonnes of value-added steel products during the year to meet the growing requirements of high-end user segments. It aims to achieve a sales turnover of over Rs 400 bn during FY10. The company has plans to double its capacity to meet the growing demand.

Pharma stocks are trading weak led by Wockhardt, Sun Pharma and Dr.Reddy’s. As per a leading business daily, Wockhardt has decided to approach the corporate debt restructuring (CDR) cell through its lead banker mainly on account of adverse market conditions, liquidity constraints and debt burden. Wockhardt has taken a large amount of debt on its books to fund its acquisitions particularly Pinewood and Negma. This includes FCCB worth US$ 110 m and ECB worth US$ 250 m. The debt equity ratio jumped to 2.3 in CY07, higher in comparison than most of its peers. While the ratio is expected to come down by CY10, on an overall basis the debt-equity ratio for Wockhardt would continue to remain on the higher side. It may be noted that the company’s debt burden stood at Rs 38 bn at the end of CY08. This clearly indicates that company is reeling under debt burden which needs to be resolved soon by debt restructuring.

Worst showing since 1990

India battling twin deficits
The RBI has released a report on India’s balance of payments developments during the last quarter of 2008. With December being one of the worst quarters in recent memory, needless to say that the report does not make for a good reading. The country’s current account deficit, a measure of how much more it imports than it exports, has climbed to US$ 14.7 bn. Never since 1990 has India raked up such a huge number. Furthermore, this time around, even the capital inflows have not been able to offset the same. Infact, even they have witnessed a net outflow of US$ 3.2 bn, meaning that the twin deficits put together have depleted our forex reserves by US$ 17.8 bn. While the development is indeed sad, we are in a lot better position as compared to the balance of payments crisis of 1990 because unlike then, we are sitting on huge forex reserves of more than US$ 200 bn and could easily fund many more months of such deficits. Furthermore, the deficits were caused by sharp fall in exports and drying up of capital inflows, both of which are likely to improve in the coming months. Hence, no reason to press the panic button yet. However, if the scenario does persist, it may cause further downward pressure on the rupee.

At what rate will India grow?
There is more bad news for India. Just as India’s current account deficit has ballooned to its highest level since 1990, the country’s GDP growth is also likely to slow to an 18-year low of 4.3% in the calendar year 2009. This prediction was put forward by the Organisation for Economic Co-operation and Development (OECD). However, the institution has added that it has more to do with the global slowdown than India’s own economy. Incidentally, another economic body, the Asian Development Bank (ADB) has also come out with a report on India’s GDP growth, predicting the economy to grow by 5% in the same year. Important to add that these numbers are sharply lower than the one being spoken of by the country’s planning commission of 6.5%. As per ADB, while India will grow at 6.5%, it will happen only in 2010 while OECD is of the opinion that even in 2010, India’s GDP growth will remain at 5.8%.

GM, Chrysler bankruptcy to affect few Indian companies
Just as odds of bankruptcy at GM and Chrysler continue to rise by the day, there are a few Indian companies who are feeling jittery as well. Because at stake are deals worth nearly US$ 1 bn annually, ranging from outsourcing of IT services to supply of some critical auto components. As per a leading daily, in IT services the worst hit could be TCS, which counts GM amongst its top 10 clients and had also signed US$ 150 m contract with Chrysler last year. As far as auto components are concerned, few of them are already feeling the heat as orders from the two US companies have dried up. Furthermore, payments are also getting delayed on account of the two companies facing severe liquidity problems. While the situation is indeed dire, some are expressing hope that just as American banks were deemed to be too big to fail and were eventually rescued by the US government, even GM and Chrysler are too big to be allowed to go bankrupt and hence, not all is lost yet.

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