Saturday, 29 September 2018

Falling rupee may impact chemical agrochem sector - Top 8 stocks that can fetch 10-40% return

The rupee depreciation year-to-date and in last one month was so sharp that net importers of commodities are likely to hit badly as they have to shell out more money to buy their products.

Rupee depreciation is likely to hit badly net importers of commodities as they have pay more to buy raw material or finished products. On the contrary, exporters will definitely be major beneficiaries.

More the exposure to imports, severe the impact of rupee fall. One of the sectors that may be impacted is chemicals and agrochemicals, but IIFL feels the impact will not be same for all. While exporters can pass on to customers the cost advantage of rupee fall, in case of importers which can't pass on import cost, the pressure can likely go beyond FY19.
The research house said FY19 earnings are likely to be clouded by hedging losses and debt revaluation, so it focuses on earnings for FY20, by when the recurring impact on earnings should become more visible.
According to the brokerage, Deepak Nitrite (DNL), UPL and Atul are likely to be among the leading beneficiaries. It expects Aarti, SRF, Navin Fluorine, Rallis and Tata Chemicals to record more modest benefits while Bayer, Coromandel and GSFC – all net importers – may face some near-term challenges.
It feels INR depreciation will impact not only: 1) ‘core’ trade earnings (i.e., those arising from exports and imports), but also lead to 2) hedging gains/losses, 3) revaluation of foreign currency borrowings, and 4) revaluation of monetary items on the balance sheet.
However, the last three items (Bayer, Coromandel and GSFC) will have a one-time impact on reported financials (in FY19), whereas only the core earnings impact will sustain through FY20 and beyond, IIFL said.

According to the research firm, the biggest beneficiary could be Deepak Nitrite, mainly owing to its new phenol project, which will have USD-linked spreads.
UPL will likely derive more than 85 percent of its revenues from outside India by FY20, post the Arysta acquisition, and hence could also see substantial benefit, it said, adding Atul has demonstrated significant leverage to the INR in the past.
It believes Navin Fluorine and SRF should also benefit more modestly. Tata Chemicals' overseas soda ash business gives it some advantage, while Rallis is a marginal net exporter while PI Industries’ custom synthesis typically passes on INR movements to customers, and so should remain relatively unaffected, it said.
For net importers, price hikes may be challenging near-term due to strained farmer finances, IIFL feels.

But IIFL is not negative on all three stocks though these companies are net importer and the rupee will have major impact on their earnings.
Among three, it has Reduce rating on Bayer Cropscience only (which fell 2 percent YTD) and expects stock to give negative return over a period of one year but in case of Coromandel Interational (which fell 31 percent YTD) and GSFC (down 40 percent YTD) it has Add and Buy rating with expectations of 35 percent and 44 percent return, respectively.

Bayer CropScience
Bayer is a net importer, but typically passes on input cost increases to farmers. Therefore, under normal conditions, INR depreciation should not impact the company’s margins. However, agrochemical prices have already risen sharply in 2018, and farmers may balk at further price increases. This is a key challenge for Bayer.
Coromandel International
Like most Indian fertiliser companies, Coromandel is a net importer: it imports most of its key raw materials – ammonia, phosphoric acid, and potash – that are used for making fertilizers. Besides, in its crop protection business too, it imports certain chemical intermediates from China.
A weaker INR has made these inputs more expensive for Coromandel. While the company typically passes on these input cost increases to farmers, it has already taken (along with the rest of the fertiliser industry) substantial price hikes in 2018. DAP prices are up around 30 percent at the industry level so far this year, due to both INR depreciation and increases in prices of all inputs.
In such an environment, it remains to be seen whether farmers will be ready to accept further price increases or fertilizer demand will witness any pressure.
Like Coromandel, GSFC too is a net importer, mainly due its imports of fertilizer inputs. It therefore faces similar pressures: of raising prices of its fertilizer products in an environment where farmer demand may already be under pressure.
In its chemical business, GSFC sells primarily in India, but its product prices are pegged to international prices. Consequently, the company may benefit from INR weakness, in that its spreads in INR terms could widen.
However, this benefit could be offset by any softness in fertilizer-segment margins for aforementioned reasons and, in addition, chemical-segment margins are highly volatile. Hence, quantifying the currency impact would add little value.
In case of other stocks, IIFL expects Aarti Industries, Navin Fluorine, Tata Chemicals, UPL, Rallis India and SRF to give 12-30 percent return.

Friday, 28 September 2018

Citi advises investors to stay with defensives, removes Yes Bank from model portfolio

Citigroup highlights top 10 stock ideas which could give decent risk-to-reward to investors

Looking at the recent correction seen in India markets, analysts at Citigroup advise investors to stay with defensive names and with stocks which have earnings visibility for some more time.
The global investment bank, which maintains its Sensex target of 37,300 for March 2019, has removed Yes Bank from its model portfolio post the recent downgrade and added Coal India.
Citigroup feels that volatility could remain a concern in the near term, given high valuations and risks of some moderation in growth in certain segments. Domestic flows have been a big support, but it will be interesting to see if the trend continues.
Citigroup highlights top 10 stock ideas which could give decent risk-to-reward to investors:
Ambuja Cements:
Citigroup expects cement prices to rise over the medium term as M&A activity slows. Additionally, there is a shift in Ambuja’s strategy to focus on profitable growth even though the merger with ACC has been delayed, added the report.
The view is based on 1) strong volume growth since 2017, 2) limestone mines acquisition, 3) plans to commission new clinker capacity and 4) cost focus.
Lafarge’s global strategy includes utilising the best asset base to grow faster than the market, and more investments in growth plus markets (India could benefit). Current valuations provide an attractive entry point.
Coal India (CIL):
CIL’s current valuation are 1-SD below mean and offers a 7 percent dividend yield. Citigroup is constructive on 1) e-auction price support, 2) realization upside from linkage auctions, 3) strong volume growth and 4) limited cost pressures (wage negotiations concluded in FY18).
Citigroup believes that HDFC Ltd will maintain its strong earnings momentum with healthy AuM growth and relatively stable spreads backed by a strong funding franchise.
The company has maintained its spreads in the narrow range of 2.20-2.35 percent over a long period of time irrespective of the interest rate environment. It has a well-balanced ALM profile and is adequately capitalized.
ICICI Bank has been focusing on addressing their corporate asset quality issues which have led to higher slippages/NPA in the past.
The bank is well positioned to leverage its strong liability and retail lending franchise with retail now constituting 58 percent of the total loan book and CASA ratio at 51 percent.
The share of the overseas business, which is lower yielding, continues to decline. With NPA recognition in the last leg, the focus will shift to recoveries and core growth/profitability.
ITC is a key holding in the consumer space in our view - positive trends in the key cigarette business, i.e. continued positive volumes are a near-term catalyst, coupled with a stable mix.
This should drive 11% EPS CAGR and 17 percent FCF CAGR respectively over FY18-20E. Valuation discount is compelling vs. peer group. ITC is perhaps the only major consumer stock trading in-line with its last 5 year historical average of 28x 1-year forward P/E.
Maruti Suzuki India:
For the overall Indian PV industry, we expect 10/11% YoY growth in FY19/20 respectively. Maruti should continue to gain market share, given a strong product portfolio. Citigroup expects domestic volume growth rates of 13/12% YoY over FY19/20 respectively.
Currently, the stock is trading at ~12.4x 1-year forward EV/EBITDA, which is close +1 SD above mean but a significant pullback from recent highs of 18x.
While there could be near-term risks to earnings given the way currencies have moved, it does seem adequately priced into the recent stock price moves.
NTPC trades at 10.9x P/E and 1.2x P/BV FY20E. The stock trades 1 standard deviation below historical (since January 2005) mean on both parameters.
Commenting on the business outlook, Citigroup said that Coal related under-recoveries have been more or less resolved from July 2018. Logistical issues faced by NTPC for domestic coal transportation have eased after it signed a MoU with the Indian Railways in Apr18 and paid ~Rs50bn advance towards haulage charges.
NTPC is targeting capacity addition and commercialization of ~4.8GW in FY19E and 4-5GW addition in FY20E. Over the next 3-4 years, capitalization should exceed capex implying RoE expansion as equity invested in under-construction projects starts earning returns.
Petronet LNG:
Petronet LNG is a key beneficiary of India’s rising LNG imports, and its capacity expansion is well timed against this backdrop.
With 90 percent of the post-expansion Dahej capacity already tied up under long-term take-or-pay / use-or-pay contracts and given the significant capital efficiency & scale benefits associated with successive brownfield expansions at the facility, the company offers strong volume and earnings visibility notwithstanding the start-up of new terminals.
Sun TV:
Citigroup thinks that the stock price correction on a YTD basis is overdone and the current valuations at 15x FY20E EPS are attractive, pricing in most concerns. Earnings delivery is expected to be healthy as ad momentum sustains.
Tamil Nadu digitalization boosts domestic subscription revenues (~Rs3.8bn additional revenues by FY20E). The global investment bank estimates 13%/19% consolidated revenue / EPS CAGR over FY18-20E.
Citigroup expects 13 percent revenue CAGR with 140bps of improvement in margin over FY18-20E (without incorporating the recent Arysta acquisition), largely driven by higher volumes and market share, the introduction of more proprietary products and better cost efficiencies.
The India season was good and early signs from Latin America (largest market) are encouraging as well, pointing to good earnings momentum over the rest of FY19.
The global investment bank believes UPL’s well-diversified business model is resilient to transient market disruptions and would allow it to consistently grow ahead of the market.

Thursday, 27 September 2018

Tyre sector, OMCs among 16 stocks that are getting impacted the most by import duty hike

The government raised basic customs duties across air conditioners, refrigerators, washing machines (<10kgs) and compressors for aircon and refrigerators.

The Indian government on Wednesday hiked import duty on high-end consumer items including washing machines, air conditioner, footwear, diamonds, jet fuel as a part stabalise currency and to reduce current account deficit (CAD).

“The government has chosen consumer goods over capital ones, banking on the robust and resilient consumption growth over the past year. Given these are a small share of overall imports, the measures would help reduce imports by only USD 500 million (0.1% of total imports), which is quite small,” Nomura said in a report.
“In our view, the currency depreciation thus far is likely to play a bigger role in reducing the imports as compared to the import duty hikes. Nevertheless, it adds to the incremental steps that the government has been taking to trim the current account deficit and improve the scope of its funding,” it said.
The total value of imports of these 19 items in the year 2017-18 was about Rs 86,000 crore, as per the finance ministry release.
The increase in basic customs duty from 10% to 20% is applicable for air conditioners, refrigerators and Washing Machines (<10kgs) while duties on compressors have been raised from 7.5% to 10%.

Here is a list of 16 stocks which are getting impacted by import duty hike:
Blue Star, Voltas:
The increase in customs duty of 10 percent includes the outdoor, indoor and completely built units which would see an increase along with an increase in duties for compressors by 2.5 percent. In case of compressors, 70-75 percent of the requirement is met by imports from China where price hikes would be needed by manufacturers to pass on the increase.
“In the case of indoor units, Indian manufacturers like Voltas, Blue Star, Lloyd depend primarily on imports while MNC players like Daikin, Hitachi make/source it in India; higher duties will give an advantage to the MNC players till the time the Indian players too start sourcing the same domestically,” Motilal Oswal said in a note.
Goldman Sachs in a note said that hike in customs duty is negative for Voltas. Morgan Stanley suggests that a hike in customs duty is likely to hurt earnings in H2FY19.
Whirpool, Havells India:
Within refrigerators, Whirlpool has manufacturing facilities in India and only imports the 400litre range which would be the only range to be impacted from the duty hikes.
“VoltBek Appliances (JV of Voltas and Arcelik) is importing its entire range of refrigerators (direct cool and frost-free) till its plant starts in mid CY19 at Gujarat – our channel checks suggest that most of the sourcing would be done from Thailand which has a free trade agreement with India and would remain unaffected by the increase in duties on refrigerators,” said a Motilal Oswal note.
CLSA in a note said that Voltas’s JV with Arcelik would be hurt as appliances are 100% imported. Voltas Beko’s domestic factory will likely take a year to start. Commenting on Havells India, it said that the company currently imports 70 percent of Lloyds requirement but has the option to shift to domestic manufacturing.
Morgan Stanley maintains an equal-weight rating on Havells India with a target price of Rs 712. The global investment bank said that commissioning of AC plant is likely by Mar-19 which will moderate the impact in FY20.
MRF, Apollo Tyres, CEAT, JK Tyres:
The government has hiked the import duty on car radial tyres from 10-15 percent. The imports account for 13 percent of the domestic FY18 sales volumes. “This is sentimentally positive for tyre companies like MRF, Apollo Tyres, CEAT, JK Tyres,” said a Sharekhan report.
IOC, BPCL, HPCL, Jet Airways & SpiceJet:
OMC stocks like IOCL, BPCL, and HPCL are in focus after the Indian government imposed 5 percent import duty on ATF from nil currently. It will be positive for OMCs as it could help them increase marketing margins on ATF but could weigh on aviation stocks like Jet Airways and SpiceJet.
Bata India; Relaxo Footwear:
The custom duty on footwears increased to 25 percent from 20 percent earlier. “It is positive for Footwear companies such as Bata India and Relaxo Footwear,” said the Sharekhan report.
Titan Company:
There is no change in import duty on gold which is positive as this would lift the overhang on the stock in the near term. Morgan Stanley maintains an overweight rating on Titan Company with a target price of Rs 1250. Hike in rate or jewellery pieces is marginally positive as it reduces competitiveness.

Wednesday, 26 September 2018

Yes Bank | Glenmark | Adani Green | Bank of Baroda | Ulfex | Avenue Supermarts

Yes Bank | Glenmark Pharma | Adani Green | Bank of Baroda | Ulfex and Avenue Supermarts are stocks, which are in news today.

Bank of Baroda: Moody's affirms bank's ratings, outlook stable.
DLF reappoints KP Singh as chairman for 5 years w.e.f. october 1, 2018
Yes Bank
Bank forms search & selection committee to identify new MD & CEO
Search & selection comprises of 3 existing board members and 2 external experts
To ask RBI to give Rana Kapoor time beyond Jan 31, 2019, as MD & CEO
IL&FS Transportation - Brickworks revised rating on NCD worth Rs 3,550 cr to BWR C(SO) from BWR BB-(SO)
Godrej Properties adds new residential project in Ghodbunder Road, Thane
RITES: Company has a joint venture company i.e. BNV Gujarat Rail Private Limited. Company has remitted second tranche of investment for an amount of Rs 24,70,000 to subscribe joint venture company's right issue.
NHPC: Unit 2 of Parbati-II HE Project (4 x 200 MW) in Himachal Pradesh has been successfully synchronised with the grid at 10-11 MW load. Further, the Load throw off test on Unit 2 has been carried out successfully at 25 percent load (50MW) and at 100MW (50 percent load).
Piramal Enterprises approved issue of compulsorily convertible debentures worth Rs 81 crore
Adani Green Energy has won tender for setting up 300 MW Wind generation project
Glenmark Pharma: Board meeting will be held on September 28 to consider opportunistic tenders or buybacks of any part of its Singapore listed foreign currency convertible bonds, being, its $200 million 2 percent resettable onward starting equity linked securities due June 28, 2022 issued in 2016 (FCC Bonds) and / or, its $200 million 4.5 percent senior notes due 2021 issued in 2016 (FCY Bonds).
Blue Dart Express: Company expands reach in order to deliver to every Indian Home by December 2018.
Central Bank of India's board meeting on September 28 to consider additional equity capital upto Rs 2,354 crore via pref equity issue to GoI
Minda Industries: Uno Minda appointed Sunil Bohra as Group Chief Financial Officer on retirement of Sudhir Jain.
Mahindra CIE approved scheme of merger between Bill Forge (Subsidiary) and Mahindra CIE
Cosmo Films: Company announced installation of a new solvent less lamination machine at its Karjan plant, Vadodara.
Sumeet Industries: Brickwork Rating India has revised rating of bank loan facilities of the company.
Uflex: FlexFilms forays into online space with the launch of its E-Commerce website FLEX-BuzzR to market its entire range of films in European region.
Majesco: Company appointed Adam Elster as Chief Executive Officer, effective October 1, 2018. Ketan Mehta, Majesco Co-Founder and current CEO, has decided to retire from the operational role after 36 years of service and will continue to serve Majesco as the Chairman of the company’s board of directors.
Avenue Supermarts: Company has issued Commercial Paper of Rs 65 crore; CRISIL has upgraded its rating on the long term bank facilities and non-convertible debentures of the company from AA/Positive to AA+/Stable.
Kallam Textiles: Board to consider Right Issue on September 29.
VXL Instruments: MV Nagaraj has resigned as Chairman and Managing Director of the company.
Greenply Industries sets up Euro 11-mn facility in Gabon
PSP Projects - CARE upgarded credit rating for bank facilities from CARE A positive to CARE A+ stable

Tuesday, 25 September 2018

ICICI Bank | Infosys | Dena Bank | Moser Baer | HFCL | Dilip Buildcon | DHFL

ICICI Bank | Infosys | Dena Bank | Moser Baer | HFCL | Dilip Buildcon and DHFL are stocks, which are in news today.

Kajaria Ceramics: Board approved acquisition of 30 lakh equity shares of Kajaria Floera Ceramics Private Limited (Fleora), a subsidiary company and approved incorporation of a wholly-owned subsidiary company in USA by making investment/loan not exceeding $1 million.
Unichem Laboratories: ICRA assigned a long-term rating of A+ with a stable outlook for Rs 30 crore Line of Credit (LOC) of the company.
Vakrangee: Company entered into distribution agreement with Aditya Birla Housing Finance, which shall offer distribution of home loan and other related products through Nextgen Vakrangee Kendras.
Vakrangee clarified that company has not received any communication with respect to inspection of Books from Ministry of Corporate Affairs
Adlabs Entertainment: Company to develop and operate a new entertainment park in Amaravathi, Andhra Pradesh.
Mangalam Drugs & Organics: Company received the final approval from WHO for the drug Efavirenz.
ABB: Company launched its most economical charging solution for electric vehicles.
Zensar Technologies: Company launched 3 in 1 Insurance Module, which provides insurance companies a centralised data environment across consumer, agent and employee data. Company selected as IT transformation partner by Ruffer LLP - To help enhance its 'client first' approach.
Oriental Bank of Commerce: CARE revised ratings of several bonds.
Jubilant Life Sciences: Company's material wholly-owned subsidiary, Jubilant Pharma (JPL) proposes to organise exploratory meetings with one or more international institutional investors between September 25 and November 30 in connection with JPL's proposed plan of fund raising.
ICICI Bank: Committee of Executive Directors of the bank approved the proposed offshore borrowings by way of issuances of debt instruments and certificate of deposits by the Bank subject to business requirements/ market conditions.
Yes Bank clarifies on news report "RBI slaps Yes Bank with Rs 38 crore over GST Violations': Heading used by news agency is inappropriate and RBI has not imposed any fines/ penalties over GST violations on the bank. In addition, there has been no written communication in the form of a show-cause notice, or otherwise, provided to bank on the matter by the authorities.
Avenue Supermarts: CRISIL reaffirmed its rating of A1+ on commercial paper of Rs 200 crore (limit enhanced from Rs 70 crore).
Dilip Buildcon: Company declared as L-1 bidder for a new EPC project 'Navnera Barrage (Dam) under Phase 1/A', valued at Rs 601.02 crore by the Water Resource Department, Kota, Rajasthan.
Infosys: Public Services and Procurement Canada selects Infosys public services to deliver its electronic procurement solution.
Dena Bank: Board approved proposed amalgamation of bank with Bank of Baroda & Vijaya Bank.
Moser Baer India: National Company Law Tribunal has allowed liquidation of company.
ENIL commenced broadcast from its radio station at Hubli-Dharwad (98.3 FM) - acquired under Phase 3 auctions
Himachal Futuristic Communications: Company received purchase orders for Rs 558.36 crore from Bharat Sanchar Nigam (BSNL) for PAN Indian Defence Communication Network.
SBI Life - BNP PARIBAS Cardif may consider reducing its shareholding in the company
Monsanto India appoints Cherukuri Ravishankar as MD
DHFL: Brickwork Ratings India has validated its credit ratings for secured NCD worth Rs 29,000 crore, secured NCD worth Rs 12,000 crore and fixed deposit Rs 12,000 crore at AAA/Stable, AAA/Stable and FAAA/Stable respectively.
IL&FS Investment - clarified on IL&FS Financial Services MD & CEO Ramesh Bawa, independent directors quit - this news does not relate to our company
Shalby: ICRA upgraded the long-term ratings to A from A- on the term loans and fund based facilities aggregating to Rs 103.02 crore and revised outlook on the long-term rating to Positive from Stable.
Noida Toll bridge - IL&FS, promoter of IL&FS Transportation (ITNL) & ITNL, promoter of Noida toll bridge has filed an application with NCLT seeking certain reliefs in connection with filing of a scheme of arrangement in respect of IL&FS, ITNL & company
IL&FS Engineering - Promoter IL&FS has filed an application with NCLT seeking certain reliefs in connection with filing of a scheme of arrangement in respect of IL&FS & company
Majesco: CCMSI selects Majesco Policy and Billing for P&C on Majesco Cloudlnsurer and Majesco Insurance Data & Analytics Platform.
Poddar Housing and Development, and Autoline Industries: Subsidiary Poddar Habitat Private Limited executed agreement to acquire a land admeasuring 102.50 acers in Chakan, Pune along with trunk infrastructure facilities, on a deferred payment terms from Autoline Industrial Parks Limited (subsidiary of Autoline Industries Limited).
Jost's Engineering: Company has paid Rs 40 lakh towards part payment of share application money for purchase of equity shares in the proposed right issue of MHE Rentals India Private Limited (company's subsidiary).
Sadhana Nitrochem: Board approved sub-division of a share of Rs 10 into two equity shares of Rs 5 each.
Garware Technical - ICRA revised long term rating as ICRA AA from ICRA AA-
Induslnd Bank - clarified as ILFS Securities & services transaction is progressing apace

Monday, 24 September 2018

Tata Steel | Cipla | DHFL | Biocon | TD Power | Cochin Shipyard | ITD Cementation

Stocks in the news: Tata Steel | Cipla | DHFL | Biocon | TD Power | Cochin Shipyard and ITD Cementation are the stocks that are in news today.

Tata Steel and Usha Martin: Usha Martin sold steel business to Tata Steel through a slump sale for Rs 4,300-4,700 crore.
Cipla: Company receives final approval for generic version of Impax Laboratories' Albenza (Albendazole tablets 200mg). It is an anthelmintic drug indicated for use in Treatment of parenchymal neurocysticercosis.
Infosys: Company partners with Google Cloud to develop data native intelligent enterprise.
DHFL: ICRA re-affirmed its credit ratings on company's commercial paper programme of Rs 15,000 crore as A1+; non-convertible debentures of Rs 17,655.12 crore as AAA/Stable; non-convertible debentures (public issue) of Rs 29,000 crore as AAA/Stable; Fixed Deposit Programme of Rs 20,000 crore as AAA/Stable and long term bank facilities of Rs 42,713.80 crore as AAA/Stable.
ICICI Bank: The bank proposed to acquire 8.85 percent stake in Avenues Payment India.
Biocon: Company's drug substance facility in Bangalore completed US FDA inspection with no observations.
Biocon: Company and Mylan said European Medicines Agency's Committee for medicinal products for Human Use (CHMP) has issued a positive opinion recommending approval of Fulphila, a biosimilar to Amgen's Neulasta (pegfilgrastim).
TD Power Systems: Board meeting of the company will be held on September 26 to consider a proposal for buy back of equity shares.
Pioneer Embroideries: Company's Chief Financial Officer (CFO) resigns.
ABB India: Company to enhance power quality for India's longest freight train network.
Nahar Spinning Mills: Meeting of the board of directors of the company is scheduled on September 28 to consider terms and conditions of term loan of Rs 113.00 crore and working capital limit of Rs 25 crore sanctioned by the ICICI Bank.
Dhampur Sugar Mills: CARE Ratings has reaffirmed the credit rating of the company for long term credit facilities from banks and fixed deposits as CARE A-; Negative.
Wipro: Company partners with King's College London and Sheffield Hallam University to strengthen STEM education in the UK.
Indiabulls Housing Finance: ICRA confirmed A1+ rating for company's Rs 25,000 crore commercial paper, and AAA rating for Rs 45,200 crore non-convertible debenture, Rs 15,000 crore retail bonds programme, Rs 5,000 crore subordinated debt programme and Rs 47,000 crore Line of Credit (LoC).
Banks and NBFCs: RBI allowed banks & NBFCs to co-originate loans for creation of priority sector assets.
Kwality: Company has withdrawn its QIP with immediate effect.
Welspun India (WIL): With a view to streamline the promoter holding in WIL and to eliminate layer of promoter shareholder company, the scheme provides for merger of Prasert Multiventure, a promoter company and a shareholder of WIL, into WIL.
Cox & Kings: Company has fixed the record date as October 5 for determining the list of shareholders who are entitled to receive the shares in Cox & Kings Financial Service Limited, (CKFSL/the resulting company) pursuant the demerger scheme.
Orchid Pharma: NCLT approved resolution plan by Ingen Capital Group for company.
ITD Cementation: Company won order worth Rs 845 crore.
Zuari Global: Company entered into a facility agreement with Axis Finance to avail loan facility and an overdraft facility not exceeding Rs 85 crore and an overdraft facility up to an amount not exceeding Rs 5 crore. This facility will be utilised for distillery project of 'Gobind Sugar Mills Limited', through Zuari Investments Limited, wholly owned subsidiary of the company.
IL&FS: Company said it is unable to service obligation of LC payment to IDBI Bank due on September 21. Ramesh Bawa resigned as MD & CEO of IL&FS Financial Services.
IL&FS Transportation Networks: Considering the strategic priority of monetisation of the company's project assets and generating liquidity, the board re-designated Dilip Bhatia, as Chief Strategy Officer responsible for divestment of assets and other strategic initiatives. Company in due course will look for a suitable candidate for appointment as a Chief Financial Officer of the company.
IL&FS Investment Managers: Ramesh Bawa, Managing Director has tendered his resignation to the company.
Andhra Bank: Government appointed J Packirisamy as MD & CEO of the bank.
Central Bank of India: Government appointed Pallav Mohapatra (Deputy MD, SBI), as MD and CEO of the bank.
Dena Bank: Government appointed Karnam Sekar (Deputy MD, SBI) as MD and CEO of the bank.
Sequent Scientific: Company has entered into a business transfer agreement with Solara Active Pharma Sciences to acquire the EU-GMP API facility at Mahad, Maharashtra at total consideration of Rs 46.4 crore on an Enterprise Valuation basis.
Cochin Shipyard: Meeting of board of directors of the company will be held on October 8 to consider the proposal for buy back of the fully paid-up equity shares of the company.
Adani Enterprises: Company has incorporated a wholly owned subsidiary - Bailadila Iron Ore Mining Private Limited.
SAIL: Anil Kurnar Chaudhary, Director (Finance) has joined as Chairman of the company.
Jindal Worldwide: Company has acquired 30 lakh shares at Rs 3 crore of Planet Spinning Mills Private Limited.
McLeod Russel: Company has decided to dispose of the Estates & Bearer Plants and Other Assets of Chuapara Tea Estate and Jainti Tea Estate
including Chuniajhora Tea Estate in West Bengal and entered into a Memorandum of Understanding with Civil Engineers Enterprises.
Inox Leisure: Company has commenced the commercial operations of a multiplex cinema theatre taken on leave and license basis, located at INOX Leisure, Reliance Mega Mall, Surat. Company is now present in 65 cities with 129 multiplexes, 523 screens and a total seating capacity of 1,27,275 seats across India.
Filtra Consultants and Engineers: Board approved incorporation of subsidiary company in India which will import components related to water purification (which will be of majorly of industrial use) and sell as component/assembled & sell on B2B/B2C basis; also approved incorporation of subsidiary company in India which will buy components related to water purification (which will be of majorly of domestic use) and sell as component/assembled & sell on B2B/B2C basis.
South India Projects: Company fixed the record date as October 10 to determine the number of shareholders entitled for Bonus Equity shares.
Ravileela Granites: Company has been granted a term loan of Rs 17.2 crore from State Bank of India towards expansion of their granite business to commission a factory in Ongole—BPSEZ.
Garden Silk Mills: One of the financial creditor, Corporation Bank, a member of consortium of banks, has filed an application with National Company Law Tribunal for initiation of Corporate Insolvency Resolution Process (CIRP) against company.
Welspun Enterprises: Board approved the draft scheme of amalgamation of Anjar Road Private Limited, a promoter company and a shareholder of Welspun Enterprises Limited with Welspun Enterprises.
Softsol India: Meeting of the board of directors of the company is scheduled on September 29 to consider investment proposal in the capital of Monet Networks Inc, USA and other similar activity entities.

Saturday, 22 September 2018

Top lessons from Friday’s market crash and the swift recovery

Indian economy has been on a path of recovery over the last four quarters. There has been a broad-based improvement in growth suggesting tapering of GST and demonetisation disruptions.

The current market volatility isn’t accompanied by a live event so all sorts of conjecture on the state of the market are possible. It’s very hard to ignore a high decibel noise and focus on long-term. But here is how I see it:
a. Fake news is real. Do not alter investment or trading decision without fact-based analysis. Cheap doesn’t necessarily mean quality.
b. Avoid bottom fishing or selling based on forwards and rumors. Focus on business which can deliver earnings growth with strong balance sheets.
c. Leverage positions in F&O have to be sized correctly. Smaller positions for bigger moves is ideal when volatility rises. First time traders and investors should not be exposed to the volatility of derivatives.
d. Bear and Bull markets do cause prices to over and undershoot. Remember patience is a great virtue in markets and as numbers improve markets will come back.
What’s concerning?
A) Short term triggers – There were few short Term Triggers which caused Today’s rout.
RBI’s instructions to Yes Bank to replace Rana Kapoor as CMD put a lot of stress on the bank as well as weaker peer set across banks and NBFCs. While the change in leadership could be challenging for Yes bank to maintain its growth momentum and manage the balance sheet quality, generally tight liquidity conditions indicated by tightening yield put pressure across the sector. DHFL and Indiabulls Housing Finance were the other prominent sufferers.
The uncertainty surrounding the future of IL&FS and therefore liquidity conditions are souring sentiment. Though these issues appear to be transient they can be a source of significant volatility in the short term.
B) The macroeconomic landscape remains challenging. India’s external positions remain a key source of trouble for the rupee and interest rates. Pressure on India’s CAD due to stubborn exports and exuberant imports coupled with a lull in FDI/FII flows, a stressful dollar liquidity scenario is emerging. At 8.2% 10-year yield RBI may be constrained to raise rates to fend the rupee as well as contain the rising inflationary tide.
C) An intensifying dollar liquidity vortex is squeezing emerging markets one after the other. US FED, US Treasury and Corporate action combined together is likely to remove nearly $1.12 trillion in Dollar liquidity in 2018. This would keep weaker EMs on the edge.
D) Trade wars which have been pure political rhetoric till now but with $200 billion worth of imports duty on China lurking it may become a stress point.
The silver lining 
A) India’s economic growth is reverting to normalcy although many challenges remain. The current weakness in rupee is a way of markets to self-correct. Once this round of weakness is over and stock valuations become attractive and another round of opportunities will emerge.
B) The reflation of the Indian economy, which is underway, will lead to another secular trend in India’s consumption story. Indian economy has been on a path of recovery over the last four quarters. There has been a broad-based improvement in growth suggesting tapering of GST and ‘demonetisation’ disruptions.
C) Government expenditure has been a source of support for the economy and is likely to be so in a pre-election year.
D) The best news is perhaps on the earnings front where profit growth in Q1FY19 (ex PSU banks) has been close to 20 percent and maybe a harbinger to better tidings as the IIP and core sector data indicates.

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