The Indian markets are expected to open in green tracking positive cues from Asian markets. Indian shares rose modestly yesterday on expectations the government will look at fresh reform initiatives after PM took charge of the finance ministry following the resignation of Pranab Mukherjee.
US markets saw some strength on Wednesday as traders reacted positively to a batch of relatively upbeat US economic data. A report from the National Association of Realtors (NAR) showed much stronger than expected growth in home sales index from 5.9% to 101.1 in May 2012 after falling 5.5% to 95.5 in April 2012 (expectation of 1.2% increase). European stock markets rallied in afternoon trade on Wednesday, after upbeat housing data from the US fueled investors' buying appetite.
Global cues also offered some support, with stocks rising modestly across Asia and Europe on Wednesday, although the undertone remained weak ahead of a critical European summit starting today. Markets would await direction on Eurozone crisis from the Europe summit today.
Markets Today
The trend deciding level for the day is 16,923 / 5,127 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 16,976 – 17,021 / 5,144 – 5,158 levels. However, if NIFTY trades below 16,923 / 5,127 levels for the first half-an-hour of trade then it may correct up to 16,877 – 16,759 / 5,113 – 5,078 levels.
SAIL cuts prices of value-added product modestly
Steel Authority of India (SAIL) has slashed the price of galvanized corrugated (GC) sheets by Rs.600-3,000 (1-5%) per tonne for July due to slackening demand. GC sheets are mainly used for roofing, industrial sheds, paneling, automobile bodies, household boxes, etc. The contribution of GC sheets to SAIL’s total sales volumes would not be more than 4% of its consolidated volumes in our view. Hence, we do not expect any significant impact of price cut on SAIL’s financials. We maintain our Neutral view on the stock.
Hindalco reports consolidated results; delays Mahan smelter
Hindalco reported its consolidated results for FY2012. The company's top line grew by 12% yoy to Rs.80,821cr and its net profit grew by 38% yoy to Rs.3,397cr. However, the company reported revised timeline for commissioning Mahan smelter to CY2012 (earlier guidance: 1QFY2013). The delay in commissioning Mahan smelter was in-line with our expectation. Nevertheless, the company has broadly maintained its timelines for other projects. We continue to maintain our Neutral view on the stock.
Sadbhav Engineering bags orders worth Rs.353cr
Sadbhav Engineering (SEL) has bagged two major orders worth Rs.353cr. The company has been declared a successful bidder by Maharashtra State Road Development Corporation (MSRDC), Mumbai, for a contract valued at Rs.319cr. SEL has signed a joint venture with Hindustan Construction Company for the construction of terminal facilities for passenger water transport along the west coast of Mumbai at Marve and Borivali. The company will lead the JV with more than 51% participation share. The second order worth Rs.33.5cr from Delhi Metro Rail Corporation (DMRC) involves construction work for phase-III of Delhi MRTS. With these orders the order book of SEL stands at ~Rs.7,900cr (3.0x FY2012 revenue), providing good revenue visibility. We continue to maintain our Buy view on the stock with an SOTP target price of Rs.182, owing to robust order backlog, strong balance sheet (0.5x net debt/equity FY2012) and as the company’s equity requirement for under-construction/development projects is expected to be met by internal accruals.
Economic and Political News
- Oil falls on Europe anxiety, strike supports
- Monsoon likely to revive only after July 5
- Central Bank likely to impose curbs on gold coin sale
- Rupee, euro crisis hits gold demand in India
- Rupee down 12 paise to 57.14/dollar
Corporate News
- PMO asks Coal Ministry to give deallocated mines to CIL
- United Phosphorus soars as buyback offer gains momentum
- DOT plans to impose Rs.600cr fine on RCOM
- Brigade, GIC acquire HUL’s Whitefield land for Rs.125cr
- Tata Motors to halt output for 3 days on poor offtake
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