Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.This is an entirely free service. No payments are to be made.
Indian share markets continued to trade near the dotted line with positive bias in the afternoon session and finished the week on a flat note amid mixed global cues. At the closing bell, the BSE Sensex stood higher by 26 points, while the NSE Nifty finished up by 23 points. Meanwhile, the S&P BSE Mid Cap & the S&P BSE Small Cap finished up by 1% each. Gains were largely seen in realty, auto and metal stocks.
Asian markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 0.63%, while the Hang Seng & the Shanghai Composite fell 0.77% and 0.26% respectively. European markets are trading mixed. The FTSE 100 is trading higher by 0.16%, while the DAX is leading the CAC 40 lower. They are down 0.85% and 0.21% respectively.
The rupee was trading at 66.86 against the US$ in the afternoon session. Oil prices were trading at US$ 49.57 at the time of writing.
According to an article in The Livemint, Hero MotoCorp will invest up to Rs 2.05 billion in one or more tranches to acquire up to 30% stake in Bengaluru-based Ather Energy Pvt. Ltd.
Ather is a Bengaluru-based technology start-up engaged in the business of designing and manufacturing smart electric vehicles (EVs) and associated charging infrastructure.
This is the company's second investment after it separated from Honda Motor Co. in 2010, ending a 26-year partnership. Its first was in US-based Erik Buell Racing, a move that backfired after the Erik Buell-led bike company filed for bankruptcy. Hero wrote off the investment.
Hero has now taken a conscious call to foster innovation and new technologies in-house and with the help of start-ups.
India wants to put as many as six million electric vehicles on the roads by 2020, with two out of every three being either a bus or a scooter/motorcycle.
Meanwhile, Hero MotoCorp Ltd. beat street estimates with a 28% profit growth, after the company recorded its best ever quarterly sales. Net profit for the July-September quarter rose to Rs 10.04 billion from Rs 7.86 billion in the corresponding quarter of the previous financial year.
Hero MotoCorp sold a record 1,823,498 motorcycles during the quarter, which was 15.8% higher than what they sold a year ago. Revenue increased 15% to Rs 84.49 billion from Rs 73.46 billion in the same quarter last year.
Share price of Hero MotoCorp finished the day up by 1% on the BSE.
Moving on to news from stocks in oil & gas sector. According to an article in The Economic Times, three state-run energy firms Indian Oil Corp, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd plan to spend US$20 billion on refinery expansions to add units by 2022. The companies would process fuel oil into gasoline and diesel, boosting their output to meet growing local demand for transport fuels.
India has traditionally been a net exporter of fuel oil, the residue oil left after initial crude refining that is typically used in shipping and power generation.
As per the reports, private refiners Reliance Industries and Essar Oil have already invested heavily to build advanced refineries which produce gasoline at the expense of fuel oil. With state refiners now doing the same, India will soon have to sharply raise imports of fuel oil.
India's net fuel oil exports averaged 109,000 tonnes from April to September and this could flip into a need to raise fuel oil imports as early as late 2017. As a result, the price difference between diesel and fuel oil could narrow further from its current US$17.61 a barrel, as Indian shipping fuel demand rises with the government's thrust on the coastal movement of cargoes.
IOC is the biggest expansion investor, planning to spend Rs 500 billion (US$7.48 billion) by 2022 to raise its refining capacity by about 30% to 2.08 million barrels per day. Meanwhile, HPCL and BPCL plan to spend US$11.25 billion to expand refineries and install fuel oil upgrading units, halting fuel oil output in almost all plants.
For information on how to pick stocks that have the potential to deliver big returns, download our special report now!