New Delhi, Aug 31 : Global financial services major Citigroup has projected that investment trends in India may weaken as the impact of monetary tightening sets in, with the entire year clocking a slower growth rate of 7.5 per cent.
The investment banking giant Goldman Sachs has, however, projected that the economy would register a growth rate of 7.8 per cent in the current fiscal year, a shade lower than GDP rate posted in the first quarter.
Rising interest rates pulled the economic growth rate down to 7.9 per cent in the first quarter of this fiscal, lowest in any quarter in three-and-a-half years.
Citigroup in its latest report Indian Eco Flash stated that it has revised FY09 estimates from 7.7 per cent to 7.5 per cent.
"Investments have faced a double whammy with rising input costs on the one hand and more stringent borrowing constraints on the other," Citigroup analyst Rohini Malkani said in the report.
Besides, Goldman Sachs in its latest report stated that, "in FY'09, slowing investment demand will likely be offset by a large fiscal stimulus through greater spending on a rural employment scheme, a debt waiver to farmers and wage hikes to civil servants."
Further, a near-normal monsoon is expected to support the food grain production this fiscal, it added. The Indian economy expanded by a slower 7.9 per cent in the first quarter of current fiscal as rising interest rates hit manufacturing and other key growth engines of the economy.
Interestingly, Goldman Sachs expects growth to slow further to 7.2 per cent in FY 2010, due to a weaker investment outlook caused by much higher interest rates, continued moderation in consumer demand and a partial reduction in fiscal stimulus post-election.
"We think that activity will trough in first half of FY10 before picking up gradually as interest rates start easing", it added.
Further, with RBI expressing concern on the continued rising prices of the essential commodities Goldman Sachs expects inflation to remain in double digits through 2008, before declining to 9 per cent by March 2009 and even slowing to 5.3 per cent in FY 2010.
The report expects that the central bank would raise rates one more time (0.25 per cent each in repo rate and the cash reserve ratio) at its monetary policy review in October.
Sunday, August 31, 2008
Friday, August 29, 2008
L&T okays bonus issue, declares dividend
Mumbai, Aug 29 : Engineering and construction major Larsen & Toubro on Friday said it would issue one bonus share for every one equity share held by the existing shareholders.
The shareholders took a decision to this effect at the 63rd annual general meeting, L&T said in a regulatory filing to the Bombay Stock Exchange.
The stakeholders gave their final permission for bonus issue in the proportion of one equity share for every one equity share held by the existing shareholders, it said.
The company has also declared the dividend at Rs 15 per share, having a face value Rs 2 each, L&T added.
The company has fixed October 3 as record date for issuing of bonus shares, it said.
Shares of the company closed at Rs 2589.85, up 3.53 per cent from the previous close on the BSE.
The shareholders took a decision to this effect at the 63rd annual general meeting, L&T said in a regulatory filing to the Bombay Stock Exchange.
The stakeholders gave their final permission for bonus issue in the proportion of one equity share for every one equity share held by the existing shareholders, it said.
The company has also declared the dividend at Rs 15 per share, having a face value Rs 2 each, L&T added.
The company has fixed October 3 as record date for issuing of bonus shares, it said.
Shares of the company closed at Rs 2589.85, up 3.53 per cent from the previous close on the BSE.
Gammon to construct Rs800 cr Godavari bridge project
Mumbai, Aug 29 : Gammon Infrastructure has bagged a Rs800 crore project from the Andhra Pradesh government for constructing a bridge across river Godavari.
Gammon has received the letter of allotment for constructing, financing and maintaining, on build, operate and transfer (BOT) basis, a major bridge across the river Godavari connecting Rajahmundry and Kovvur.
“The total cost to complete the project has been estimated by the company at Rs800 crore. Gammon would receive a total grant of Rs207.55 crore from the Central and State governments during the construction and operation period of the project,” the company said in a filing to the BSE.
The concession period of the project is 25 years, including a construction period of three years.
Shares of the company reacted positively on the report and surged 17.47% over its previous close.
It witnessed an intra-day high of Rs110.25. The scrip was later trading at Rs105.40, up 12.31 on the BSE in morning trade.
Gammon has received the letter of allotment for constructing, financing and maintaining, on build, operate and transfer (BOT) basis, a major bridge across the river Godavari connecting Rajahmundry and Kovvur.
“The total cost to complete the project has been estimated by the company at Rs800 crore. Gammon would receive a total grant of Rs207.55 crore from the Central and State governments during the construction and operation period of the project,” the company said in a filing to the BSE.
The concession period of the project is 25 years, including a construction period of three years.
Shares of the company reacted positively on the report and surged 17.47% over its previous close.
It witnessed an intra-day high of Rs110.25. The scrip was later trading at Rs105.40, up 12.31 on the BSE in morning trade.
Punjab Chem to acquire 70% in Parul Chemicals
Mumbai, Aug 29 : Punjab Chemicals and Crop Protection Ltd (PCCPL) on Friday said it will acquire a 70 per cent stake in Parul Chemicals, having an enterprise value of Rs 9 crore.
The agro-chemical firm in a filing to the BSE said it would acquire a majority stak e in the Vadodara-based Parul Chemicals.
However, the company did not give any financial details of the deal.
Shares of the company closed at Rs 284.15, up 1.68 per cent on the BSE.
Thursday, August 28, 2008
Essar Steel launches loyalty cards for retail customers
Mumbai, Aug 28 : Ruias-promoted Essar Steel on Thursday said the company has introduced loyalty cards for its regular retail customers.
The loyalty cards, branded as "24 Carat Bandhan", would entitle some privileges and benefits to the customers, who are regular visitors to Essar Steel Hypermarts, the company's chain of steel retail outlets, Essar Steel said in a statement.
The card holders would be eligible for need-based credit facility on their steel purchases through tie-ups with banks and financial institutions, it added.
Essar Steel Hypermart has a network of over 80 outlets selling hot rolled, cold rolled and galvanised steel products in various sizes to small and medium scale enterprises across the country.
Currently, sales from the hypermarts account for 15-20 per cent in the annual revenues of the Essar Steel, company said.
Essar Steel, which has a current capacity of 4.6 million tons per annum, plans to open more outlets across the country, it added.
The loyalty cards, branded as "24 Carat Bandhan", would entitle some privileges and benefits to the customers, who are regular visitors to Essar Steel Hypermarts, the company's chain of steel retail outlets, Essar Steel said in a statement.
The card holders would be eligible for need-based credit facility on their steel purchases through tie-ups with banks and financial institutions, it added.
Essar Steel Hypermart has a network of over 80 outlets selling hot rolled, cold rolled and galvanised steel products in various sizes to small and medium scale enterprises across the country.
Currently, sales from the hypermarts account for 15-20 per cent in the annual revenues of the Essar Steel, company said.
Essar Steel, which has a current capacity of 4.6 million tons per annum, plans to open more outlets across the country, it added.
Monday, August 25, 2008
Sameer Gehlaut resigns from Indiabulls Retail Services
Mumbai, Aug 25: Indiabulls Retail Services today said Sameer Gehlaut has resigned as Director of the company.
"Sameer Gehlaut has resigned from the office of Director, with effect from August 22, 2008," Indiabulls Retail Services said in a filing to the Bombay Stock Exchange.
Founded in 2007, Indiabulls Retail operates nine lifestyle stores under Indiabulls Megastore, 36 super mart stores under Indiabulls Mart and upcoming cash and carry stores under Indiabulls Wholesale.
Shares of the company were trading at Rs 75.40, up 0.80 per cent on the BSE in afternoon trade.
"Sameer Gehlaut has resigned from the office of Director, with effect from August 22, 2008," Indiabulls Retail Services said in a filing to the Bombay Stock Exchange.
Founded in 2007, Indiabulls Retail operates nine lifestyle stores under Indiabulls Megastore, 36 super mart stores under Indiabulls Mart and upcoming cash and carry stores under Indiabulls Wholesale.
Shares of the company were trading at Rs 75.40, up 0.80 per cent on the BSE in afternoon trade.
Nectar Lifesciences to raise $50 mn
Mumbai, Aug 25 : Pharmaceutical major Nectar Lifesciences today said it will raise $50 million through the issue of securities in international markets.
The board of directors of the company at its meeting today approved to issue Global Depository Receipts (GDRs), American Depository Receipts (ADRs) or any other international offering of up to $50 million, the company said in a filing to the Bombay Stock Exchange.
Meanwhile, the company has received board of directors approval for issue of equity shares to Citi Venture Capital International and Everest Capital (M) Ltd and would sign a non binding term in this regard.
The company would seek shareholders approval in an extra ordinary general meeting proposed to be convened on September 16.
The board of directors of the company at its meeting today approved to issue Global Depository Receipts (GDRs), American Depository Receipts (ADRs) or any other international offering of up to $50 million, the company said in a filing to the Bombay Stock Exchange.
Meanwhile, the company has received board of directors approval for issue of equity shares to Citi Venture Capital International and Everest Capital (M) Ltd and would sign a non binding term in this regard.
The company would seek shareholders approval in an extra ordinary general meeting proposed to be convened on September 16.
Thursday, August 21, 2008
Aurobindo gets USFDA nod for hypertension drug
Mumbai, Aug 21 : Pharmaceutical firm Aurobindo Pharma today said it has received tentative approval from US Food and Drug Administration to manufacture and market hypertension drug Losartan Potassium.
The company has received the tentative approval to manufacture and market Losartan Potassium tablets in the strength of 25 mg, 50 mg and 100 mg from USFDA, Aurobindo Phrama said in a filing to the Bombay Stock Exchange.
Losartan Potassium tablets are generic equivalent of Merck Research Laboratories Cozaar tablets of the equal strengths, the company said adding that it is the 75th Abbreviated New Drug Application (ANDA) approval from the US regulator.
The branded sales of Losartan range of products was 1,235 million dollar, for the year ended December 2007, according to Merck Financial disclosures.
Shares of the company were trading at Rs 306, down 1.18% on BSE in afternoon trade.
The company has received the tentative approval to manufacture and market Losartan Potassium tablets in the strength of 25 mg, 50 mg and 100 mg from USFDA, Aurobindo Phrama said in a filing to the Bombay Stock Exchange.
Losartan Potassium tablets are generic equivalent of Merck Research Laboratories Cozaar tablets of the equal strengths, the company said adding that it is the 75th Abbreviated New Drug Application (ANDA) approval from the US regulator.
The branded sales of Losartan range of products was 1,235 million dollar, for the year ended December 2007, according to Merck Financial disclosures.
Shares of the company were trading at Rs 306, down 1.18% on BSE in afternoon trade.
Friday, August 15, 2008
Banking sector may see tough days ahead: Analysts
New Delhi, Aug 15 : After taking a hit on their bottomlines in the first quarter of this fiscal, the Indian banks are likely to remain in tough terrains in the face of the tightening macro-economic environment, analysts say.
Bottomlines of banks in the first quarter of financial year 2009 were hit by higher than expected mark-to-market (MTM) losses and lower treasury incomes, as per an earnings review of banking sector by domestic brokerage firm Sharekhan.
"Most of the banks under our coverage witnessed margin pressures during the quarter, in line with the recent rate hikes announced by the RBI. Further, a weaker treasury performance on account of the higher bond yields, the downturn in the equity markets and the high base of the last year added to the woes of banks," the Sharekhan report said.
However, the banks themselves are putting a brace face and dismiss the talks of any slowdown in the sector.
Disagreeing to the view that there is a slowdown in the banking space, Indian Bank Chairman and managing director M S Sundara Rajan said, "There is no slowdown at all. Indian Bank had a credit growth of 4,200 crore in the first quarter this year as against Rs 800 crore last year.
There is high demand from every industry including power, telecom, infrastructure, cement, sugar or composite sugar mills."
The highlight of the quarter were the MTM provisions, which significantly affected the earnings of the banks. The quarter gone by saw a significant spike in bond yields, resulting in high MTM provisions on banks' bond portfolios, the report said.
Banks with higher proportion of their investment portfolio held in the 'available for sale' category had significantly higher MTM losses during the quarter, it added Meanwhile, the report also said that the advance growth remained buoyant during the quarter, especially in the corporate segment.
On the back of a strong credit demand, most of the banks saw an improvement in the credit/deposit ratio, which led to a healthy top line performance, it added.
In its outlook for the sector, Sharekhan further said that it remains gloomy in face of the tough macro environment, at present and the balance sheet expansion is likely to moderate further considering the RBI's discomfort with the credit offtake that continues to grow at a rate higher than its targeted rate.
"Aggressive monetary tightening steps taken by the central bank coupled with the ensuing deposit rate hikes are likely to put further pressure on the margins of banks. The further firming up of the bond yields could result in additional MTM losses in the coming quarters," the Sharekhan report stated.
Asset quality ratios will be keenly watched as banks have witnessed signs of deterioration in credit quality, it added.
Besides, after a meeting with chairpersons of public sector banks, Finance Minister P Chidambaram said on Wednesday that interest rate hikes by public sector banks would not impact existing and new home loans up to Rs 30 lakhs, as also auto and education loans.
Country's largest lender SBI had reported a net profit of Rs 1,640.79 crore, an increase of 15 per cent against Rs 1,425.81 crore of the first quarter of last fiscal, despite challenging market conditions and provisioning.
Meanwhile, the largest private lender ICICI Bank was hit by sharp increase in interest rates, negative impact on treasury income and mounting bad loans with its first quarter net profit falling to Rs 728 crore, down by nearly 6 per cent, from Rs 775 crore in the year-ago quarter.
Bottomlines of banks in the first quarter of financial year 2009 were hit by higher than expected mark-to-market (MTM) losses and lower treasury incomes, as per an earnings review of banking sector by domestic brokerage firm Sharekhan.
"Most of the banks under our coverage witnessed margin pressures during the quarter, in line with the recent rate hikes announced by the RBI. Further, a weaker treasury performance on account of the higher bond yields, the downturn in the equity markets and the high base of the last year added to the woes of banks," the Sharekhan report said.
However, the banks themselves are putting a brace face and dismiss the talks of any slowdown in the sector.
Disagreeing to the view that there is a slowdown in the banking space, Indian Bank Chairman and managing director M S Sundara Rajan said, "There is no slowdown at all. Indian Bank had a credit growth of 4,200 crore in the first quarter this year as against Rs 800 crore last year.
There is high demand from every industry including power, telecom, infrastructure, cement, sugar or composite sugar mills."
The highlight of the quarter were the MTM provisions, which significantly affected the earnings of the banks. The quarter gone by saw a significant spike in bond yields, resulting in high MTM provisions on banks' bond portfolios, the report said.
Banks with higher proportion of their investment portfolio held in the 'available for sale' category had significantly higher MTM losses during the quarter, it added Meanwhile, the report also said that the advance growth remained buoyant during the quarter, especially in the corporate segment.
On the back of a strong credit demand, most of the banks saw an improvement in the credit/deposit ratio, which led to a healthy top line performance, it added.
In its outlook for the sector, Sharekhan further said that it remains gloomy in face of the tough macro environment, at present and the balance sheet expansion is likely to moderate further considering the RBI's discomfort with the credit offtake that continues to grow at a rate higher than its targeted rate.
"Aggressive monetary tightening steps taken by the central bank coupled with the ensuing deposit rate hikes are likely to put further pressure on the margins of banks. The further firming up of the bond yields could result in additional MTM losses in the coming quarters," the Sharekhan report stated.
Asset quality ratios will be keenly watched as banks have witnessed signs of deterioration in credit quality, it added.
Besides, after a meeting with chairpersons of public sector banks, Finance Minister P Chidambaram said on Wednesday that interest rate hikes by public sector banks would not impact existing and new home loans up to Rs 30 lakhs, as also auto and education loans.
Country's largest lender SBI had reported a net profit of Rs 1,640.79 crore, an increase of 15 per cent against Rs 1,425.81 crore of the first quarter of last fiscal, despite challenging market conditions and provisioning.
Meanwhile, the largest private lender ICICI Bank was hit by sharp increase in interest rates, negative impact on treasury income and mounting bad loans with its first quarter net profit falling to Rs 728 crore, down by nearly 6 per cent, from Rs 775 crore in the year-ago quarter.
Wednesday, August 6, 2008
HCC consortium bags Rs 1,398 cr project
Mumbai, Aug 6: Infrastructure firm Hindustan Construction Company led consortium has bagged a contract worth Rs 1,398.50 crore from Andhra Pradesh Government for irrigation project.
The company has been awarded the contract along with two other companies -- Megha Engineering & Infrastructure (MIEL) and Czech Republic-based CKD Blansko Engineering (CBE) for J Chokka Rao Devadula Lift Irrigation Scheme, HCC said in a filing to the Bombay Stock Exchange.
Hindustan Construction Company has a share of 45 per cent or Rs 629.33 crore in the total value of the contract, the company added.
Under the project, given by the Irrigation and Command Area Development Department, about 3.43 acres of land would be irrigated in Warangal District of Telengana region and is expected to be completed in 36 calendar months.
HCC at present is involved in the construction of Godavari Lift Irrigation project and is executing four major projects in Andhra Pradesh.
Shares of Hindustan Construction were trading at Rs 103.55, up 0.68 per cent in afternoon trade on the BSE.
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