|Market Commentary||Monday, July 23, 2012 09:00 Hrs IST|
RIL in focus after Q1 results
Net profit Reliance Industries (RIL) fell 21% to Rs 4473 crore on 13.4% increase in turnover to Rs 94926 crore in Q1 June 2012 over Q1 June 2011. Gross refining margin (GRM) was reported at $7.60 per billion barrels (bbl) in the quarter ended 30 June 2012, compared with $7.60 in the quarter ended March 2012 and $10.30 in the quarter ended 30 June 2011. The result was announced after market hours on Friday, 20 July 2012.
Outstanding debt as on 30 June 2012 was Rs 73,213 crore compared to Rs 68259 crore as on 31 March 2012. The increase in debt in rupee terms is mainly on account of change in exchange rates. Net gearing as on 30 June 2012 was 1.3% as compared to nil as on 31 March 2012.
RIL had cash and cash equivalents of Rs 70732 crore. These are primarily invested in fixed deposits, certificate of deposits with banks, mutual funds and Government securities / bonds.
Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries said, "RIL has improved its earnings profile as profits from operations were higher on a sequential basis on the back of volume growth in the refining business. We have commenced our next phase of capital investments in the refining and petrochemical segments to enhance earnings and value of our core energy businesses."
On a consolidated basis, net profit of Crompton Greaves rose 8.1% to Rs 85.90 crore on 15.3% increase in net sales to Rs 2811.14 crore in Q1 June 2012 over Q1 June 2011.
Hindustan Unilever, L&T and Cairn India unveil Q1 results today, 23 July 2012. Idea Cellular, Colgate-Palmolive (India), Coromandel International, Dabur India, Jubilant Life Sciences, Merck, Torrent Pharmaceuticals and Tata Global Beverages, among others, will also declare their April-June 2012 quarter results today, 23 July 2012.
Maruti Suzuki on 21 July 2012 declared an indefinite lockout at its Manesar plant in Haryana. The company's Manesar facility was rocked by labour violence on 18 July 2012. A General Manager, Awanish Kumar Dev, was burnt to death by the mob of workers inside the plant facilities. Nearly a hundred managers and supervisors sustained serious and critical injuries and had to be hospitalised. The mobs also set fire to the office wing and the main gate.
The company said that its most important concern at this time is the safety and security of its supervisory and management personnel. The management firmly believes that unless the causes are identified and appropriate corrective action is in place it would be unsafe for supervisors and managers to resume work. Following the incidents of violence and arson at the Manesar facility, the Management believes that if employees are asked to report for work at the facility, their lives will be endangered.
The company said it wants to ensure that the injured continue to receive quality medical care and recover from the mental trauma caused by the violence. About 30 managers and executives are currently admitted in hospitals in Gurgaon. Even among those discharged from hospital, many are going through trauma owing to the terror and abuse accompanying the attacks. The families of these victims remain disturbed. The company said its other facilities, including the operations in Gurgaon, will continue to function normally, Maruti said in a statement.
Tata Power, India's largest integrated power utility, after market hours on Friday, 20 July 2012, announced that it has signed a long term coal supply agreement with PT Antang Gunung Meratus (AGM), a 100% subsidiary of the Indonesian company PT Baramulti Sukses Sarana (BSSR). Further, in order to secure the coal supplies, the company, through its 100% subsidiary Khopoli Investments (Khopoli), has also entered into an agreement which gives Khopoli an option, subject to necessary approvals, to take up to a 26% stake in BSSR. AGM and BSSR own approximately 1 billion tonnes of coal resources in South and East Kalimantan in Indonesia.
Speaking on the development, Anil Sardana, Managing Director, Tata Power said, "As a strategy to support our growth agenda, we are happy to have signed this coal supply agreement. It would support our upcoming power projects based on imported coal to be developed over the next 5 years."
Tata Power's existing Indonesia presence includes 30% equity stakes (the Purchase) in two major Indonesian thermal coal producers, PT Kaltim Prima Coal and PT Arutmin Indonesia, and a related trading company owned by PT Bumi Resources Tbk (Bumi). As part of the Purchase, Tata Power has signed an Offtake Agreement which entitles it to purchase about 10 million tonnes of coal per annum.
Additionally, a consortium comprising of Tata Power, Origin Energy and PT Supraco is developing a geothermal project in Indonesia with approximately 240 megawatts of generation capacity.
Telecom stocks will be watched on reports the Empowered Group of Ministers (EGoM) on telecom headed by Home Minister P Chidambaram on Friday, 20 July 2012, decided to recommend a reduction in the reserve price for the 2G spectrum auction suggested by sector regulator Telecom Regulatory Authority of India (Trai). It reportedly recommended a price of Rs 14000-16000 crore for five megahertz (MHz) of pan-India spectrum. That amounts to a reduction of more than 20% from the base price of Rs 18110 crore suggested by the Trai. It means the base price for one MHz will be Rs 2800-3200 crore, instead of the Trai-recommended Rs 3622 crore. A final decision on the price will be taken by the Cabinet, expected to meet later this week.
Reliance Communications (RCom) pulled the initial public offering (IPO) of a unit that holds its undersea-cable assets. RCom had filed a preliminary prospectus with the Monetary Authority of Singapore of its arm Global Telecommunications Infrastructure Trust for a public listing in Singapore on 5 July 2012. The company is awaiting supportive market conditions and easing of prevailing global uncertainties to proceed with the offering/listing at an appropriate time in the future, in order to unlock the full value of the Flag Telecom assets, the company said in a statement on Friday, 20 July 2012.
TCS turns ex-dividend today, 23 July 2012, for interim dividend of Rs 3 per share for the year ending 31 March 2013 (FY 2013).