|Market Commentary||Monday, July 02, 2012 08:52 Hrs IST|
Auto and cement stocks in focus on June monthly sales data
Shares from auto and cement sectors will be closely watched as companies from these sectors unveil their June 2012 monthly sales data.
Mahindra & Mahindra (M&M's) sales rose 16% to 41,322 units, in June 2012 over June 2011. The Passenger Vehicles segment (which includes the UVs and Verito) has registered a growth of 23%, having sold 19,792 units in June 2012, as against 16,053 units during June 2011. The company announced a 24% rise in its auto sales numbers, which stood at 126,029 units during the first quarter of FY 2012-13 as against 101,997 during the first quarter of FY 2011-12.
Commenting on the numbers Pravin Shah, Chief Executive, Automotive Division, M&M. said, “We are happy to have achieved a growth of 24% in the first quarter of FY 13 given the pressures and various uncertainties which the auto industry is currently facing. We expect the demand for utility vehicles industry to continue during the current financial year. Our opinion in the current industry scenario is to not have any major changes in the policies, including fuel prices, in order to create an overall positive sentiment”
Tata Motors' total sales (including exports) of Tata commercial and passenger vehicles declined 3% to 64,341 vehicles in June 2012 over June 2011. The company's domestic sales of Tata commercial and passenger vehicles for June 2012 were 58,270 nos., lower by 5%, over 61,266 nos., sold in June last year. Cumulative sales (including exports) for the company for the fiscal are 188,774 nos., lower by 2%, over 193,039 nos., sold last year.
Reliance Industries (RIL) has reportedly reopened its retail petrol pumps in Gujarat and sell fuel at the same price as charged by PSU OMCs. Out of the 60 petrol pumps across Gujarat, 52 will offer petrol at same prices as compared to other PSUs from 1 July 2012. However, the company will be selling only petrol and auto LPG and won't sell diesel as its price is still controlled by the Union government.
HDFC Bank, India's second biggest private sector bank in terms of branch network, has reduced lending rates by 20 basis points with effect from Friday, 30 June 2012. The bank has cut base rate to 9.8% from 10% and the benchmark prime lending rate (PLR) to 18.3% from 18.5%.
State Bank of India, the country's biggest commercial bank in terms of branch network, has raised interest rate by 25 basis points to 9% on fixed deposits for the tenure of three years to less than five years with effect from Sunday, 1 July 2012. This is applicable for deposits below Rs 15 lakh.
Dabur India said its wholly owned subsidiary, Dabur International has sold its entire stake in its subsidiary Weikfield International (U.A.E.). Accordingly, Weikfield International (U.A.E.) has ceased to be company's step down subsidiary company with effect from 25 June 2012.
Cairn Energy sold 3.33 crore shares of Cairn India at an average price of Rs 308.74 per share on BSE on Friday, 29 June 2012. Cairn Energy also sold 3.33 shares of Cairn India at an average price of Rs 308.72 per share on NSE on the same day. Last year, Cairn Energy sold controlling stake in Cairn India to London-listed miner Vedanta Resources in an $8.7 billion deal, but still retained 21.79% shareholding in the Indian company, as of 31 March 2012.
IT stocks will be in focus as the rupee posted its biggest daily gain in three years on Friday after the government confirmed it will not impose retroactive taxes on foreign investors and as global risk asset rallied. The rupee settled at 55.6050/6150 on Friday rising 3.1% over its previous close. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.
Oil exploration firms, aviation stocks and PSU OMCs will also be in focus as crude oil prices surged on Friday. Oil surged on Friday in heavy trading to the fourth biggest daily gain on record, as a deal by European leaders to shore up euro zone banks triggered frantic short-covering by funds that had been riding crude's price collapse over the last quarter. U.S. crude jumped by more than $7 to settle just below $85 a barrel.
Aviation shares may be in demand after PSU OMCs reduced jet fuel prices by 2% on Saturday. The reduction comes on back of a massive 5% cut in rates effected from June 16.
Higher crude oil prices will result in higher realizations from crude sales for oil exploration firms. While, higher crude oil prices will increase under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol. For airlines, aviation turbine fuel, or jet fuel constitutes more than 50% of operating cost for airliners. Prices of jet fuel are directly linked to crude oil prices. State-run oil marketing companies--Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation revise jet fuel prices on the 1st and 16th of every month based on the average international crude price in the preceding fortnight.
Tyre manufacturers will be in spotlight on reports that the slowing automotive sales is taking a toll on the tyre industry and they are planning to rationalise production in tandem with the weakening domestic market and channelise excess stocks to exports.
Sail reportedly plans to invest around Rs 3000 crore to quadruple capacity of its iron ore mine in Jharkhand to 10 million tonnes per annum (mtpa) and put up a four mtpa pelletisation plant.
NMDC will reportedly invest Rs 30071 crore during the 12th Five Year Plan period, which started on April 1 this year, to achieve a production capacity of 50 million tonnes by 2016-17 and establishing steel and other value added plants.