|Market Commentary||Monday, July 30, 2012 08:59 Hrs IST|
Maruti Suzuki India may decelerate on reporting fall in Q1 net profit
Maruti Suzuki India on Saturday, 28 July 2012, said its net profit declined 22.8% to Rs 423.80 crore on 27.5% growth in net sales to Rs 10529.20 crore in Q1 June 2012 over Q1 June 2011. The car major said adverse yen-rupee exchange rate movement impacted profits adversely in Q1 June 2012. The company attributed strong sales growth to higher volumes, favourable product mix and higher export realization. Maruti said demand continued to be skewed in favour of diesel cars while petrol cars suffered a sharp de-growth in Q1 June 2012.
Reliance Industries (RIL) is reportedly likely to invest close to $1 billion over the next few years and hire around 1,500 people in its new aerospace division. Early this month, the Mukesh Ambani-led company applied for an industrial licence with the department of industrial policy and promotion to design, develop, manufacture, equipment and components, including airframe, engine, radars, avionics and accessories for military and civilian aircraft, helicopters, unmanned airborne vehicles and aerostats.
Housing finance major HDFC's consolidated net profit jumped 25.07% to Rs 1275.86 crore on 21.61% growth in total income to Rs 7268.79 crore in Q1 June 2012 over Q1 June 2011. The result was announced on Saturday, 28 July 2012.
Tata Steel in a clarification on 28 July 2012 said it has no current and active plans to merge Tata Sponge Iron and The Tinplate Company of India with itself.
Grasim Industries' consolidated net profit declined 4.52% to Rs 718 crore on 16% growth in revenue to Rs 5907 crore in Q1 June 2012 over Q1 June 2011. Grasim said the profit before interest, depreciation and taxation (PBIDT) rose 1% to Rs 1767 crore in Q1 June 2012 over Q1 June 2011 on the back of enhanced performance of the cement business. The net profit declined due to higher taxes and increase in minority interest on higher cement profits, Grasim said.
Grasim said expansion in capacity of viscose staple fibre (VSF) and chemicals businesses is on track. As regards the cement business, Grasim's Chhattisgarh and Karnataka brownfield expansions are on track and are expected to be operational by Q1 June 2013, Grasim said. Consequently, UltraTech Cements' cement capacity will be enhanced by 10.2 million tonnes per annum (mtpa) to 62 million mtpa, Grasim said.
With regard to future business outlook, Grasim said stability in euro zone and macro-economic policies will influence demand for VSF. The cotton crop in the ensuing season will influence VSF realisations in the short term, it said. In cement, despite the 8% projected growth in demand, the surplus scenario is likely to continue for three years, Grasim said. Capacity expansions under implementation in both VSF and cement will provide additional volumes, driving growth and will further consolidate the company's leadership, Grasim said.
Dr. Reddy's Laboratories on Friday announced that the import alert at Quimicas Falcon de Mexico SA de C.V. (Dr. Reddy's chemical manufacturing facility at Cuernavaca, Mexico), a wholly owned subsidiary of Dr. Reddy's Laboratories has been lifted. Dr. Reddy's received a clearance from the United States Food and Drug Administration (USFDA) on 26 July 2012.
Dr. Reddy's Mexico facility was inspected by USFDA in November 2010. Based on observations by the USFDA, a Warning Letter was shared on 14 June 2011 with the company. Dr. Reddy's worked with USFDA to resolve the observations in the Warning Letter. An inspection report after the last inspection from 26 – 30 March 2012 indicated that they are satisfied with all the outstanding action points that Dr. Reddy's has submitted. With the satisfactory closure of observations in the warning Letter and the lifting of the import alert, Dr. Reddy's can now start importing products to the US from this facility. The Mexico facility produces Intermediates and Active Pharmaceutical Ingredients.
Infrastructure stocks may be in focus after the Prime Minster's Office (PMO) on Friday, 27 July 2012, said the flagship infrastructure projects in key sectors viz. ports, airports and railways are moving ahead smoothly and detailed timelines have been drawn up for intermediate stages. Mechanisms have also been put in place for regular monitoring and problem solving, the PMO said in a statement. Prime Minister Dr. Manmohan Singh has identified boosting infrastructure as one of his focus areas in the short term.
Due to surveillance concerns, BSE and NSE in consultation with stock market regulator Securities & Exchange Board of India (Sebi) have decided to reduce the price band on 6 stocks viz. Glodyne Technoserve, Radico Khaitan, Pipavav Defence and Offshore Engineering Company, Parsvnath Developers, Tulip Telecom and Era Infra Engineering to 5% with effect from today, 30 July 2012.
Rural Electrification Corporation (REC) announced after market hours on Friday, 27 July 2012, said its net profit jumped 32.44% to Rs 876.73 crore on 30.33% growth in total income to Rs 3092.68 crore in Q1 June 2012 over Q1 June 2011
Net profit of state-run Neyveli Lignite Corporation (NLC) declined 15.9% to Rs 288.47 crore on 9.9% growth in net sales to Rs 1331.81 crore in Q1 June 2012 over Q1 June 2011. The result hit the market after trading hours on Friday, 27 July 2012.
Nestle India's net profit rose 15.03% to Rs 245.97 crore on 12.8% growth in total income to Rs 1997.87 crore in Q2 June 2012 over Q2 June 2011. The result was announced after trading hours on Friday, 27 July 2012. The company's board declared interim dividend of Rs 18 per share for the year ending 31 December 2012.
Crude oil refiner Mangalore Refinery and Petrochemicals (MRPL) reported a massive net loss of Rs 1520.55 crore in Q1 June 2012, compared with net profit of Rs 172.71 crore in Q1 June 2011. The company said the net loss in Q1 June 2012 was mainly due to sharp reduction in crude and product prices in April and May 2012, a steep rupee deprecation and lower throughput due to force majeure arising out of stoppage of water supply for about 10 days by the distraction administration. MRPL's net sales declined 4.1% to Rs 12809.86 crore in Q1 June 2012 over Q1 June 2011.
Crompton Greaves has acquired 100% of ZIV, a global leader in the high value Smart Grid and automation Solutions segments for industrial and utilities companies, for an enterprise value equivalent to Euro 150 million.
Suzlon Energy said it has redeemed, in cash, FCCB liability of US$ 360 million due 27 July 2012 through a combination of instruments – including the proceeds from the sale of non-critical assets, internal accruals and the new facilities from senior secured lenders.
Mahindra Satyam has entered into an Agreement of Settlement (the "Settlement") with Aberdeen Claims Administration, Inc., ("Aberdeen") the trustee for two trusts who are the purported assignees of legal claims against the company belonging to twenty investors who allegedly purchased the company's common stock and American Depositary Shares prior to 7 January 2009, and who sold such securities shortly thereafter. Aberdeen had alleged that that the losses suffered by the twenty investors is over $68 million.
The obligations incurred pursuant to the settlement are in full and final disposition of the action initiated by Aberdeen in the United States District Court for the Eastern District of Pennsylvania, subsequently transferred and currently pending in the United States District Court for the Southern District of New York (the "Court").
Under the Settlement, Mahindra Satyam is required to inter alia deposit in an Escrow, an amount of $12 million (equivalent to Rs 66.7 crore). The settlement itself is subject to the entry of an appropriate Consent Order by the Court that has not been delivered till date.
Bank of Baroda and GAIL (India) unveil Q1 results today, 30 July 2012.