You are on page 1of 25

Managing interest costs

Share print T+ The December quarter numbers of Indian companies suggest that their interest bill on borrowings may have peaked. While interest costs have certainly gone up over a year ago, they have not moved up much from the September quarter. Interest costs, which were 11.4 per cent of earnings before interest, depreciation and taxes, barely changed from the September quarter. This, despite rate hikes made by banks in early December 2011. Companies, at least the top-rated ones, may have contained interest costs by resorting more to market borrowings through issue of commercial paper for their short-term needs. Three-month commercial paper rates between October and December 2011 hovered around 9.5-9.8 per cent, as against the median base lending rate of 10.75 per cent by banks. According to RBI data, commercial paper issuances more than doubled to Rs 86,700 crore between April and December 2011, compared with a year-ago period. Of these, over Rs 27,000 crore of net issuances were made post September 2011 until November 15.

India Inc struggles to expand profits


Vidya Bala Share print T+ Pressure from raw material costs unabated in December quarter

BL Research Bureau: Indian companies struggled to expand their profits in the December quarter over a year ago period. Large players in the energy space, such as Reliance Industries, or NTPC, capital goods companies like Siemens or consumer players such as Whirlpool India all saw their net profits decline in the latest December quarter compared with December 2010. Higher raw material costs, accentuated by the rupee's depreciation and cost of holding higher inventory besides stubbornly high interest costs were main reasons for the earnings dip.

Increase in provisions for non-performing assets by banks also played a role in pulling down net profits of the above universe. In all, net profits for about 1000 listed companies that have published their results, shrank 1.2 per cent over with the December 2010 quarter. The same set of companies recorded a 5.6 per cent profit growth in the September 2011 quarter. These companies, however, managed to deliver a little over 25 per cent growth in sales, driven mainly by volumes that remained healthy in most cases. They managed a similar expansion in September as well. No relief Raw material costs as a proportion of sales (of manufacturing companies) jumped to 60 per cent from 55 per cent a year ago. While globally companies may be benefiting from softer commodity prices now, Indian firms have not benefited from the same, due to a depreciating rupee and net importer status. After depreciating over 9 per cent in the September quarter, the rupee lost another 8.3 per cent in the three months ended December 2011, thus hiking the import bill on key inputs such asoil, coal, steel and copper. The global prices of these commodities declined (as of December) anywhere between 4 - 23 per cent from their highs in 2011. Refineries such as MRPL too failed to benefit from about 8 per cent dip in Brent crude oil from mid-September to mid-December, as a result of the rupee's fall. Companies that bought inputs like steel locally, too, did not get any respite. Domestic steel prices have remained firm, with marginal increase in certain steel products during the quarter. Local steel suppliers held on to their pricing, taking advantage of the higher landed costs of imported steel due to the depreciated rupee. Passing on the cost Auto and auto component makers, capital goods companies and consumer durable players were among those who saw a pronounced increase in their raw material bill, as a proportion of sales. While auto makers have periodically passed on higher costs to their customers in 2011, through price increases, inability to hike prices was visible in consumer durable plays such as Whirlpool India and TTK Prestige as raw materials cost as a proportion of sales increased significantly compared with a year ago. Pharma and fertiliser companies, also heavy importers, saw an increase in their inputs bill. Fertiliser companies have been passing on the higher costs through price hikes on phosphatic and complex fertilisers, but sales volumes have suffered. For steel companies, it was imported coking coal costs that played spoilsport. Few others like JSW Steel also took a hit due to the ban on iron ore mining.

Reliance in a fix over D6 gas price


Richa Mishra Share print T+

New Delhi, Feb. 5: Reliance Industries, which will have to start the process of discovering a new price for D6 gas in 2013, is in a fix over how it will go about the task. This is because the company might be asked to supply gas to the same set of customers it is currently catering to, and may thus find it difficult to discover a fair, transparent, arm's length price. The buyers of D6 gas are also procuring expensive imported gas. Therefore, they are aware of the dynamics of the gas market and would be unwilling to pay a higher price to Reliance. The current price of $ 4.2/mBtu (at landfall point) has been approved for five years from the date of production. The new price will come into force from April 2014. Reliance has been seeking a revision in D6 gas price since it started production in April 2009, as gas prices have shot up considerably. Fair price The D6 operator has been saying that the production sharing contract (PSC) provides for arm's length market price and it has to be a spot price. The company also said that customers were willing to pay a higher price in 2012. But, if the company goes for the price discovery mechanism, like it did the first time, it may not get a fair price for the gas, industry observers said. According to Reliance, the production-sharing contract says the price will be valid for three years. Hence the price was in for a revision in 2011. But, the Empowered Group of Ministers, while approving the formula, had given its nod for five years. The company has been pressing for the D6 gas price to be linked to international benchmarks such as the Japanese crude cocktail around $12/mBtu. The prevailing liquefied natural gas price ranges from $10-$18/mBtu, and the current D6 price is way below the market price. Reliance has been under public glare after the drop in D6 output. According to guess estimates, the Government has lost $ 1 billion by not selling D6 gas at market price. The company said the production-sharing contract does not operate on a cost-plus basis the Government guarantees the rates of return for the fertiliser industry (15 per cent) and the power sector (14 per cent). Meanwhile, the Empowered Group of Ministers on Gas, which has allocated D6 gas, is expected to meet on February 13 to decide on further allocation of gas from all domestic sources. At present, the output from Dhirubhai -1 and -3 fields is about 30 mscmd, with an additional seven mscmd from MA fields taking the total output of the D6 block to 37-38 mscmd. richam@thehindu.co.in

Headline inflation rises to 9.44% in June

PTI Share print T+

The Hindu A file photo of a LPG bottling plant. Headline inflation rose to 9.44 per cent in June on the back of rising prices of fuel and manufactured products.

Related NEWS
Inflation must be brought down to 5%: Rangarajan

TOPICS
economy (general) RBI and other central banks prices, inflation and deflation energy and resource diesel fuel kerosene/paraffin New Delhi, July 14:

Headline inflation rose to 9.44 per cent in June on the back of rising prices of fuel and manufactured products, which may prompt the Reserve Bank of India to raise the key rates again in its quarterly policy review later this month. Inflation, as measured by the Wholesale Price Index (WPI), stood at 9.06 per cent in May. It was 10.25 per cent in June 2010.

Meanwhile, as per data released by the Government today, the overall inflation figure for April this year has been revised upward to 9.74 per cent from the provisional estimate of 8.66 per cent. The rise in inflation can partly be attributed to the hike in prices of diesel, cooking gas and kerosene announced by the Government on May 24. The higher price of petroleum goods, according to experts, is adding to supply side constraints. Index for the fuel and power segment, which has a weight of almost 15 per cent in the WPI basket, stood at 12.85 per cent year-on-year in June. This was up from 12.32 per cent in the previous month. LPG became 12.17 per cent more expensive on an annual basis, while high speed diesel was up 6.58 per cent. Petrol, whose prices were hiked in April, also became dearer by 30.61 per cent. Prices of manufactured products, which have a weight of around 65 per cent in the WPI basket, went up by 7.43 per cent year-on-year in June. Inflation in manufactured products has been steadily rising since February this year, when it crossed the 6 per cent mark. It was 7.27 per cent in May. During the month under review, primary articles witnessed 12.22 per cent inflation on an annual basis against 11.3 per cent in the previous month. Primary articles have a share of around 20 per cent in the overall WPI basket. Within the primary articles segment, food articles became 8.38 per cent more expensive, while the prices of non-food primary articles went up by 18.57 per cent. The RBI has already hiked key policy rates ten times since March 2010, to curb demand and tame inflation. With headline inflation remaining high, as shown by the latest numbers, it may go in for another hike at its July 26 quarterly review. Experts have said that such action is inevitable and the RBI had also maintained that taming inflation was a priority for the central bank. However, the latest numbers are in line with the RBIs projection of a high inflation rate in the first half of the fiscal. In its monetary policy for 2011-12, the central bank had said that continued high prices of global commodities, particularly oil, would continue to drive the rate of price rise. The RBI had projected inflation to average nine per cent for the first six months of 2011-12 before moderating to around six per cent by the year-end. Both the RBI and other experts had also said that inflationary pressure during the next few months would be more from commodity prices, rather than on account of food items, as was the case in 2010.

Headline inflation has been above 8 per cent since January 2010.

Inflation must be brought down to 5%: Rangarajan


Our Bureau Share print T+

Dr C. Rangarajan Hyderabad, July 11: It is important to bring down inflation to five per cent in the medium term, according to Dr C. Rangarajan, Chairman, Economic Advisory Council to the Prime Minister. Speaking on Current economy and policy options' at the College of Defence Management here on Monday, he said: We need to use all policy instruments to achieve this.

The Reserve Bank of India is likely to consider changes in the policy rates in its first quarter policy review slated for July 27. Along with measures to increase supply of essential items, the monetary and fiscal policies have to be tightened, the economist said. Food inflation is expected to come down in the coming months due to monsoon, among other factors. The economy has potential to grow in the range of 9-9.5 per cent during the 12{+t}{+h} Plan period while in the present year, it might clock a growth rate of 8-8.5 per cent. For achieving this, it is important to control inflation, maintain a comfortable' current account deficit and take up fiscal consolidation, he said. Control expenditures' There is a need to control expenditures, especially on the subsidies, Dr Rangarajan said. Referring to the recent hike in diesel prices, he said the Government might have to act again' on diesel prices, if there is any further hike in international crude oil prices. Later, while responding to questions from newspersons, Dr Rangarajan said: Probably, the RBI would act (on the interest rates) if inflation persists at a higher level. Inflation is , however, expected to come down to 6.5 per cent by March 2012, he added. Food inflation has already come down to 7.7 per cent, driven by decrease in cereal prices even though prices of fruits and vegetables continue to be on the higher side, he pointed out.

Fuel index surges to 12.2%; non-food items index up


Our Bureau Share print T+

While onions were dearer by 22.66 per cent, potatoes were up 10.55 per cent. New Delhi, July 28: Food inflation eased further in mid-July, even as fuel inflation surged upwards. The slowing down in food inflation was mainly on the back of the continuing decline in pulses, along with the base effect of the previous year. According to Government data released on Thursday, the annual Wholesale Price Index (WPI)-based food inflation rose 7.33 per cent in the week ended July 16. This was lower that the 7.58 per cent annual rise recorded in the previous week. Fuel inflation climbed 12.12 per cent during the period, higher than the 11.89 per cent reported in the previous week. Food inflation was at a high 18.56 per cent during the corresponding period a year ago. According to the latest data, pulses declined by 8 per cent year-on-year, even as inflation in most other food items went up. Onions were up by 23 per cent and fruits increased by 14 per cent on an annual basis. Potatoes gained by 11 per cent, while milk surged 10 per cent. Vegetables were up by 8 per cent year-on-year. The eggs, meat and fish subgroup surged 6.4 per cent from about 8 per cent the week earlier. Overall, primary articles recorded inflation of 10.49 per cent for the week ended July 16, down from 11.13 per cent in the previous week. Primary articles have a share of over 20 per cent in the WPI. But inflation of non-food articles increased up to 16.05 per cent from 15.50 per cent in the previous week.

Fibres were up by over 28 per cent and oil seeds close to 14 per cent. Minerals too shot up over 23 per cent year-on-year. The moderation in food inflation is expected to come as a breather for the Reserve Bank, which has adopted a series of measures to battle inflationary pressure. Headline inflation stood at 9.44 per cent in June. The RBI has already hiked interest rates 11 times since March 2010, to quell demand and tackle runaway inflation. The possibility of deficient rains, higher prices offered by the Government to procure farm products and inadequate egg and meat supplies could stoke inflation, the Reserve Bank had said on July 26.

Headline inflation to remain higher than historic levels


Vidya Bala Share print T+

Ms Sonal Varma, Nomura's ED and India Economist

Related TOPICS
economy (general) industrial policy prices, inflation and deflation

We expect WPI inflation to remain in the 9.5-10 per cent range for the next few months.SONAL VARMA, NOMURA'S EXECUTIVE DIRECTOR AND INDIA ECONOMIST Asia's elaborate cross-country production network's supply-chain issues arising from the Japan catastrophe are being resolved faster than expected says Robert Subbaraman Nomura' Chief Economist, Asia in a report. This, together with easing commodity prices, could set the stage for growth to regain its vigour in early Q3 2011. Not all is well though, as inflation remains a cause for concern. Business Line spoke to Nomura's ED and India Economist, Ms Sonal Varma, to understand why inflation will remain higher than historic levels in the Asian region. Excerpts from the interview: Your house call is that there could be persistently high inflation going forward in Asia. What leads to this belief? Asia as a region has been slow in terms of policy tightening because central banks have been worried about sluggish global growth and attracting too much capital inflows. So policy tightening has been slow and real interest rates in a lot of Asian countries remain negative. If you have very loose monetary policy, then the risk of that fanning inflation in any case is quite high. Second, unlike global economies where there was a very sharp decline in growth, in Asia, growth has bounced back much faster. So there is not too much slack; unemployment rates are coming down and wage growth is picking up. Three, given that food is a substantial portion of the consumers' basket in Asia, food price inflation remains high across Asia and some of the threats we are seeing in India such as rising food demand and limited supply are also visible in other Asian countries. So that will keep inflationary expectations elevated in Asia. A lot of Asian countries have also controlled domestic fuel and electricity prices. So risk of a one-off fuel and electricity price increase after remaining unchanged for long also exists for other countries in the region. Barring inflation, Nomura is of the view that the major headwinds for Asia have eased. What are the signs of such an ease? The headwinds that Asia was facing were: One, the steep increase in commodity prices that had an inflationary impact. Second, the uncertainty regarding the sovereign debt crisis and how it would be resolved. Third, signs of global growth slowing down and, if that continues, the impact that it would have on Asia.

As a house, our baseline scenario is that the slowdown we are seeing globally is a temporary soft patch. And, increasingly, there are signs of capacity that was closed down because of the Japanese earthquake coming back online. For instance, auto production in Thailand has been higher than what we had anticipated. So, some of those supply-chain disruptions are getting sorted out. What threats could the sovereign debt problems in Europe pose to Asia? Our baseline assumption is that Greece will do all the required austerity measures, pass it and implement it and that the IMF/EU/ECB combination will give the 12 billion package. So the basic assumption here is that there is no contagion. The problem arises if there is a contagion from Greece to other peripheral European countries. In that scenario, there could be significant impact on European banks because they have exposure to sovereign debt of other countries, corporate loans and inter-bank loans. So in that scenario, you could see these banks pulling their credit lines to Asia. Second, if there is an impact on European growth, particularly in the core European countries, then there could, to some extent, be an impact on the Asian growth through the export channel. Third, if the European crisis leads to risk aversion, there could be capital outflows from Asia. How different or how serious is the inflationary situation in India compared with other Asian nations? In general, the inflationary problem is common across Asia. While I think the main difference is in terms of the absolute levels of inflation, if you look at the underlying drivers, the theme is very common; you have elevated headline inflation and you are seeing signs of core inflation picking up both in India and rest of the region. The only difference is that in some Asian economies prices have adjusted much faster. In India, the price adjustment, especially on the fuel side, has been very slow. And still there are losses made by the oil marketing companies while selling the petro products. If you look at the average inflation across countries, among the Asian countries, only Vietnam probably has inflation rates which are higher than India. The risk for Asian countries with high inflation is that expectations get entrenched and there also comes the risk of a wage price spiral and a risk that if countries do not tighten sufficiently there could be problem of an asset price bubble building up. What is your take on the inflation numbers for India? In the near-term, we expect inflation readings to remain high because of the fuel price pass-through. Beyond that, we expect some moderation because of global commodity prices falling. But that impact is normally felt with a lag. We expect WPI inflation to remain in the 9.5 per cent to 10 per cent range for the next few months. Even after the moderation, headline inflation both in India and Asia will remain much higher than what it was historically for reasons discussed above.

Keywords: WPI inflation, Nomura's ED and India Economist, Sonal Varma

Business standard

Rupee loses steam as euro weighs


Reuters / Mumbai Feb 06, 2012, 11:22 IST

Ads by Google

BlueChip Stock Ideas : Get The "Multibagger Stock Ideas" Report. Free & Exclusive. Act Now! Equitymaster.com/Unbiased_Opinions The rupee reversed early gains on Monday weighed by a weak euro and an impending decision on Greek debt deal, which offset the positive push offered by gains in local shares following a strong US non-farm payroll data. The rupee is expected to track the euro closely for the day, with the Greek bailout deadline just hours away.

Also Read Related Stories News Now

- Rupee rises on US jobs data - Greek parties face Monday EU bailout deadline - Europe's cold snap claims more victims, travel hit - Greece on 'knife edge' amid default risk - Weak rupee saves the day for banks with foreign presence - Abheek Barua & Shivom Chakravarti: Risk-on in a sweet spot

At 11:05 a.m., the rupee was at 48.69/70 to the dollar after opening at 48.60, its highest since September 21. It closed at 48.6850/6950 on Friday. "The rupee should remain in a range due to mixed factors of lower euro and positive stocks. We are waiting for the Greece decision," said Ashtosh Raina, head of foreign exchange trading at HDFC Bank, who expects strong resistance to emerge at 48.60. Dealers expect the rupee to move in a 48.50-48.80 band during the day. Greece's coalition members must tell the European Union by noon on Monday whether they accept the painful terms of a new bailout worth 130 billion euros in order to avoid a disorderly default. The euro was at $1.3082 after falling to $1.3075 in early Asian trade. "Every weekend there are some uncertainties regarding the euro zone crisis and so the rupee remains rangy at the beginning of the week," said a dealer at a foreign bank. However, dealers largely expect the rupee to move with an upside bias on robust foreign fund inflows. Dollar demand from oil companies to meet their payment commitments also added to the rupee's fall, dealers said. "We expect 48.25 level to be a big support (for the dollar) in the near term," said a dealer at a foreign bank. The BSE Sensex rose 1% in early Monday trade after a robust US jobs data bolstered global risk appetite and lifted Asian markets. Data from the US Labor Department showed 243,000 non-farm jobs were created in January, its fastest pace in nine months, pulling the unemployment rate to an unexpected three-year low of 8.3%. Major stock indexes closed on Friday at highs not seen in months, with the Nasdaq reaching the highest in 11 years, while the dollar rose against the yen as the jump in US job creation fuelled investor optimism. "The rupee's outlook doesn't look so bleak anymore given the amount of (capital) inflows we have seen in January," the foreign bank dealer said. Foreign funds have bought around $3 billion of Indian shares and $3.2 billion of debt in this year until Friday, data from the Securities and Exchange Board of India showed. The Reserve Bank of India marginally eased some restrictions on the limits on net open positions for forex trading. However, the move won't have any impact on the rupee's movement as the relaxation was nominal, dealers said. One-month offshore non-deliverable forward contracts were at 48.93.

In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange were all at 48.9325, on total volume of $1.2 bil

upee rises on US jobs data


Reuters / Mumbai Feb 06, 2012, 09:17 IST

Ads by Google

Long Term Stock Picks : Free Guide - How To Identify Long Term Multibagger Stock Picks. Equitymaster.com/Free_Stocks_Guide The rupee opened stronger on Monday after surprisingly robust US jobs data bolstered investor risk appetite across world markets. At 9 a.m. , the rupee was at 48.60 to the dollar, its highest since September 21. It ended at 48.6850/6950 on Friday, posting its fifth straight weekly rise.

Also Read Related Stories News Now

- Gold rebounds after heavy loss, Asia rushes to buy - Stocks rise as US jobs gain outweighs fears over Greece - US data boosts equities, dollar - Asian shares, euro fall before US jobs data - Rupee up on inflows, US jobs data eyed - Oil could hit $200/barrel under new sanctions: Iran The United States created jobs at the fastest pace in nine months in January and the unemployment rate unexpectedly dropped to a near three-year low, giving a boost to President Barack Obama.

arkets end higher led by banks

Surabhi Roy / Mumbai Feb 06, 2012, 16:19 IST

Ads by Google Long Term Stock Picks : Free Guide - How To Identify Long Term Multibagger Stock Picks. Equitymaster.com/Free_Stocks_Guide Key share indices ended higher amid a volatile trading session Monday, rising for the fifth straight day, led by bank and capital goods shares. The 30-share Sensex ended at 17,707 up102 points and the 50-share Nifty ended at 5,362 up by 36 points. The Sensex and the Nifty reached an intra-day high of 17,830 levels and 5,390 mark, respectively. On the global front, Asian markets ended mixed. Strait Times, Shanghai Composite Nikkei and Kospi ended in green. However, Hang Seng and Taiwan Index ended in red zone.

Also Read Related Stories News Now

- Sensex ends 72 pts up - Markets remain firm, realty stocks surge - Sensex up 100 pts in firm mkt, banks surge - Srei Infra jumps in spite of drop in net - Piramal Healthcare up 7% on Vodafone stake buy - India Infoline soars 14% post Q3 earnings European markets opened lower on nerves Greek would fail to come up with the political commitments needed to avoid a potential sovereign debt default, taking the shine off a US jobs report that had brightened the global economic outlook. Back home, BSE Realty index surged 4% followed by counters like Capital Goods and Metal, both surging by almost 2% each. Apart from Healthcare, all the major BSE sectoral indices ended in green zone. Realty stocks ended firm on expectations that the central bank will start cutting interest rates in the coming months to prop up slowing economy. DLF surged nearly 2%. Other Realty stocks like DB Realty, Unitech and HDIL gained between 4-14%. Metal stocks surged after LMEX, a gauge of six metals traded on the London Metal Exchange jumped 2.45% on Friday, 3 February 2012. Jindal Steel was the top Sensex gainer, up 3%. Hindalo and Sterlite gained between 1-2%.

Among Sensex stocks, from the capital goods space, BHEL and L&T gained by nearly 2%. L&T gained on winning Rs 1,937-cr order from GVK group. Banking stocks like SBI and ICICI Bank gained between 2-3%. However, HDFC Bank ended marginally lower. Auto stocks like Bajaj Auto, Maruti Suzuki and Tata Motors gained between 1-2% on the back of encouraging sales in January. However, index heavyweight RIL lost ground and has plunged by almost 1%. Tata Power slumped 4% and was the top loser from the Sensex pack. FMCG major HUL plunged by over 3%. The stock jumped by almost 2% in the late noon after the announcement of robust Q3 numbers. ITC gained by almost 1%. Among Technology pack, Infosys dropped by nearly 1%. However, TCS gained by almost 2% on reports that the company has bagged a huge order from a European firm. The broader markets outperformed the benchmarks indices. The BSE Midcap and Smallcap indices zoomed between 1-2%. Shares of cement companies surged triggered by good dispatches data in January 2012. J.K. Cement, Jaiprakash Associates, UltraTech Cement and India Cements gained between 510%. Piramal Healthcare gained 3% after the company said it would buy a 5.5% stake in Vodafone's India unit from Essar for Rs 3007 crore, taking its total stake in the mobile company to about 11%. The railway related stocks like Kernex Microsystems, BEML, Stone, India and Texmaco surged over 5% each after the ministry of finance approved Rs 3,000-crore loan to the Indian Railways. The overall market breadth in BSE ended firm with 1,856 shares advancing and 1053 shares declining.

ensex ends 72 pts up


SI Reporter / Mumbai Feb 06, 2012, 15:31 IST

Ads by Google 1 Crore Life Insurance : Pay less than Rs.1000 every Month Secure your Family for 1 Crore paisabazaar.com/term-life-insurance

The Bombay Stock Exchanges 30-share Sensex provisionally closed at 17,677 up 72 points or 0.4%. The National Stock Exchanges 50-share S&P CNX Nifty provisionally closed at 5,356 up 30 points or 0.6%.

------------------------------------------------------Updated at 1430 hrs

Also Read Related Stories News Now

- Markets remain firm, realty stocks surge - Sensex up 100 pts in firm mkt, banks surge - Srei Infra jumps in spite of drop in net - Piramal Healthcare up 7% on Vodafone stake buy - India Infoline soars 14% post Q3 earnings - Kale Consultants gains 4.4% on buyback plans Markets have trimmed the gains but continue to maintain the positive trend amidst volatility. At 14:30 hrs, the Sensex was up 80 points at 17,685 and the 50-share Nifty rose 28 points at 5,354. On the global front, Asian markets ended mixed. Strait Times, Shanghai Composite Nikkei and Kospi ended in green. However, Hang Seng and Taiwan Index ended in red zone. The European markets have opened lower. Back home, BSE Realty index is leading the uptrend, surging by over 4%. Sectors like Capital Goods, Metal, Banks and Consumer Durable have gained by almost 2% each. Apart from Oil & Gas, all the major BSE sectoral indices are trading in green zone. Among Realty pack, DLF has gained by over 3% on expectations that the central bank will start cutting interest rates in the coming months to prop up slowing economy. From the Capital Goods space, BHEL is the top Sensex gainer, up 3%. L&T has gained by over 2% on winning Rs 1,937-cr order from GVK group. Banking stocks like SBI and ICICI Bank have gained between 2-3%. However, HDFC Bank is trading marginally lower.

Metal stocks has surged after LMEX, a gauge of six metals traded on the London Metal Exchange jumped 2.45% on Friday, 3 February 2012. Sterlite Industries, Hindalco Industries, Tata Steel and Jindal Steel & Power have gained between 2-5%. FMCG major HUL has surged by almost 2% after the announcement of robust Q3 numbers. ITC has gained by almost 1%. Auto stocks like Tata Motors, M&M, Maruti and Hero Motocorp are up between 1-2%. However, IT stocks like Infosys and Wipro are trading marginally in red. Index heavyweight RIL has lost ground and has plunged by almost 1%. The broader markets have outperformed the benchmarks indices. The BSE Midcap and Smallcap indices have zoomed by over 2% each. The overall market breadth in BSE remains firm with 1,934 shares advancing and 890 shares declining.

SpiceJet slips into red, posts Rs 39 cr loss in Q3


Press Trust of India / Mumbai Feb 06, 2012, 15:42 IST

Ads by Google

Indi Go Airlines Flights : Flight Tickets At Rs. 99 + Taxes. Quality Service. Book Now & Save! MakeMyTrip.com/Cheap-Airfares Budget airline SpiceJet today posted a loss of Rs 39.26 crore for the quarter ended December 31, 2011, due to escalating ATF prices and increase in the US dollar rates. The air carrier had a profit of Rs 94.44 crore for the comparable period last fiscal, it said in a filing to the BSE.

Also Read

Related Stories

News Now

- Coal price hike drags Adani Power's net to Rs 358 cr - India Cements Q3 net jumps 160% to Rs 56 cr - FIIs desert Kingfisher Airlines - Dr Reddy's Q3 net profit gains 88% on US sales - Tata Tele Q3 net loss at Rs 144 cr - Godrej Industries Q3 net up 40% at Rs 85 cr "... During the quarter ended December 31, 2011, we were able to realise major gains in market share, improve the revenue mix and achieve significant cost savings aided by a relentless drive to boost operational efficiencies". "Accordingly, our losses at the Profit Before Tax (PBT) level fell by more than Rs 200 crore as compared to the immediately preceding quarter. But for escalating ATF prices and abnormal increase in the US Dollar rates the financial performance could have been much better this quarter," SpiceJet Chief Executive Officer Neil Mills said. The December quarters loss has narrowed from Rs 240 crore that the Kalanithi Maran-led airline had reported during the second quarter ended September 30, 2011. Further, during the third quarter, the company's revenue increased by 41% to Rs 1,175 crore from Rs 831 crore of the corresponding quarter a year ago. The company said aircraft fuel expenses were 90 per cent higher than the same period last year and fuel cost as a proportion constituted 50 per cent of the total revenue in the current quarter compared to 37 per cent in the same quarter of the previous year. "Increased cost of crude oil plus 24 per cent tax on ATF is continuing to impact the Indian civil aviation sector very adversely," the company said. It, however, added the outlook for the industry is considerably better now with recent media reports indicating that a liberalisation of FDI in the sector may be on the cards.

FIIs desert Kingfisher Airlines


The combined loss of the three listed Indian carriers touched Rs 1,878 crore in the first half of 2011-12
Mihir Mishra / New Delhi Feb 04, 2012, 00:41 IST

Ads by Google Bombay Stock Exchange : Unbiased Opinions On BSE Stocks. Get The 5 Minute WrapUp For Free Equitymaster.com/Unbiased_Opinions Kingfisher Airlines promoter Vijay Mallya might have pegged its revival to foreign money, but foreign institutional investors (FIIs) are deserting the debt-ridden carrier.

FIIs reduced their holdings in Kingfisher to 0.5 per cent in the December quarter, from 2.11 per cent in the previous quarter, according to Bombay Stock Exchange (BSE) data. However, Mumbai-based Jet Airways, Indias largest carrier in terms of passenger carriage, saw an increase in FII stake at 5.42 per cent, compared to 4.67 per cent in the three months to September. BSE | NSE Price

Also Read Related Stories News Now

- Forex reserves rise to $293.93 bn - FIIs net buy Rs 1,074cr, DIIs net sell Rs 916cr - Oil firms resume fuel supply to Air India after four hours - Corporation Bank treats Kingfisher loan as NPA in Q3 - FII-TO-FII: ING Vysya Bk traded at 9% premium - FIIs net buy Rs 1,941cr, DIIs net sell Rs 653cr In case of Sun Group-promoted SpiceJet, FII stake fell from 6.17 per cent in the September quarter to 3.81 per cent in the three months through December. The fall was huge because of an increase in promoters holding in the company. Promoters holding increased to 43.59 per cent from 38.60 per cent. Despite the fact that the air passenger growth in India is one of the highest in the world, the sector struggled with losses and debt in 2011. The combined loss of the three listed Indian carriers, Jet, Kingfisher and SpiceJet, in the first half of 2011-12 touched Rs 1,878 crore.

Jet reported a loss of Rs 101 crore for the third quarter. The other two listed carriers are yet to announce their third-quarter numbers. Rising costs due to high crude oil prices and depreciating rupee are the main reasons behind the losses. The high cost of jet fuel is largely because of high levies on the aviation turbine fuel and high airport charges, especially after private players started operating them. The average tax on jet fuel in India is 24 per cent, second only to Bangladesh (at 27 per cent) in the world, making the fuel account half the operating cost. Also, jet fuel prices have increased by 40 per cent in the past year. Among the listed carriers, Kingfishers financials are in the worst shape and the carrier has never made profit. Analysts say the problems of Kingfisher are obvious and investors are deserting the airline. Anyone who can take out his investments from Kingfisher is pulling out from it. SpiceJet, however, has seen a decline because of the increase in promoters shareholding, said a Mumbai-based analyst, who did not want to be identified.

ndia faces challenges on stable rating outlook: S&P


BS Reporter / Mumbai Feb 06, 2012, 14:30 IST

Ads by Google Long Term Stock Picks : Free Guide - How To Identify Long Term Multibagger Stock Picks. Equitymaster.com/Free_Stocks_Guide Rating agency Standard and Poors today said high inflation, a weak government fiscal position, and slower economic growth will negatively impact Indias sovereign rating. Many developing countries, including India have managed to maintain relative stability and continued growth, despite sovereign debt concerns and weak economic performance in Europe and US. However, these developing countries--India among them-- they do face challenges of their own.

Also Read Related Stories News Now

- Reliance Broadcast to enter Sri Lanka with CBS - Rupee rises for fifth straight week - Investors can exit without load when a fund house changes hands - Broadridge, IiAS in tie up - Strategic investors shocked, foreign investors unmoved, govt unfazed - Investors hit the road for status check on Bharat S&Ps unsolicited rating for India is BBB-/Stable/A-3 Ratings Services in a statement said the balance of risk factors (for Indias sovereign rating) may be shifting slightly toward the negative for reasons including: high inflation, a weak government fiscal position, and slower economic growth. They have dented investor confidence in the Indian rupee and triggered capital outflow, resulting in depreciation against major currencies. The uncertainty in global financial markets and European sovereign debt problems could add to the pressures India is feeling. S&Ps credit analyst Takahira Ogawa said India has been grappling with a political gridlock. The government's ability to implement measures to improve economic growth and fiscal prudence will be vital to boosting confidence. "Our stable outlook on the 'BBB-' long-term rating on India currently reflects our expectation of strong economic growth in the medium term and gradually improving fiscal performances," he said. The agency has factored in inflation and political uncertainty, which may lead to higher government subsidies and stalled reform efforts.

UL Q3 net rises 18% to Rs 753 cr


BS Reporter / Mumbai Feb 06, 2012, 14:11 IST

Ads by Google Long Term Stock Picks : Free Guide - How To Identify Long Term Multibagger Stock Picks. Equitymaster.com/Free_Stocks_Guide

FMCG giant Hindustan Unilever Limited (HUL) today said its net profit rose by 18.24% to Rs 753.81 crore for the third quarter ended December 31, 2011, over the same period previous fiscal. The company had posted a net profit of Rs 637.51 crore in the corresponding period of previous fiscal, HUL said in a statement.

Also Read Related Stories News Now

- Adani Ports & SEZ Q3 net up 36% to Rs 310 cr - India Cements Q3 net jumps 160% to Rs 56 cr - EIH Associated Hotels' Q3 net up at Rs 10 cr - Asian Hotels (East) Q3 net down 16.7% at Rs 6.8 cr - Madras Cements Q3 net up 77% to Rs 77 cr - Ashok Leyland Q3 net up 54% Net sales of the company rose to Rs 5,852.73 crore for the third quarter ended December 31, 2011, compared to Rs 5,027.01 crore in the same period previous fiscal. For the nine months ended December 31, 2011, the company posted a net profit of Rs 2,069.89 crore against Rs 1,736.83 crore in the same period previous fiscal. Shares of HUL were trading at Rs 408 on the BSE, up 1.82% from its previous close.

No question of blocking, censoring websites: govt


Press Trust of India / Bangalore Feb 06, 2012, 15:57 IST

Ads by Google Are you a Fresher? : Take 8th National IT Aptitude Test& Open Doors to India's best IT jobs. www.NIITEducation.com/NITAT

The government today said there is no question of blocking or censoring social networking and other websites hosting content but maintained that they should operate within the ambit of Indian laws and be accountable. "Whether it's social media website company or any company for that matter, they all have to operate within the laws of the country. And what we have said is there must be responsible behaviour on both sides," Minister of State for Communications and IT, Sachin Pilot, told reporters here.

Also Read Related Stories News Now

- Where is your reply? Court asks Google - Virtual Hormuz? - Street wary of Facebook surge - Facebook turns eight - Zuckerberg may sell $1.67 bn in FB stock to cover taxes - Facebook valued at $94bn in private auction "There is no question of any censorship at all. There is no question of blocking or censorship," he added when asked about his reaction to proceedings in the Delhi High Court vis-a-vis such websites. Asked if the government's stand has been vindicated by Delhi court, the minister said there is no separate government stand, adding, "We just want the laws to be followed". Pilot pointed out that laws governing such websites have been made after discussion and interaction with such companies. "It's just that when there is some material which is objected to...There must be a redressal system where individuals or groups of people can approach certain [concerned] company and say that the content is objectionable and the company must respond," he explained. "Nothing that has been demanded of these companies is outside the ambit of our laws....," Pilot said. He said the government propagated the issue of freedom of speech and airing of the views, whether negative or positive but added that the country today has more than 100 million internet users, which is bound to grow exponentially. "So, as we grow, I think there must be some responsible behaviour by both sides," Pilot said. "...It's not a question of clamping down on any company or asking people to censor the content".

Facebook turns eight


Press Trust of India / Houston Feb 05, 2012, 16:20 IST

Ads by Google TATA Hiring for Feb 2012 : 10,000+ Job Openings across India. Upload Resume.Apply to TATA Now! TimesJobs.com/TATA-Hiring-Feb2012 Facebook, the world's most popular social networking site with an estimated 845 million active subscribers, has turned eight. Since its launch on February 4, 2004 at Harvard University in Mark Zuckerberg's dormitory room, the social networking giant that has changed our lives over the years has witnessed massive growth and is most likely to have one billion users by August this year.

Also Read Related Stories News Now

- Zuckerberg may sell $1.67 bn in FB stock to cover taxes - Facebook valued at $94bn in private auction - Who controls the future? - Checked out - A spoof story - Things that count in life While, the company CEO Zuckerberg is best known as the man who built Facebook, the company has three other co- founders, all college roommates and fellow students at Harvard; Eduardo Saverin, Dustin Moskovitz, and Chris Hughes. The four initially built the service exclusively for Harvard students, but it was soon expanded to other colleges and eventually added support for students at various other universities. Initially before it's public launch, it was called 'thefacebook.Com'. However, on February 4, 2008, Zukerberg renamed to domain name and launched what we know today as 'Facebook'. It now seems almost impossible to imagine life without Facebook status updates, friend requests, relationship statuses or photo tags. Facebook has not only put Zukerberg in the list of top and youngest millionaires but also helped a lot of start ups, non profits and other companies grow, interact and increase sales. In January 2009, Compete.Com study ranked Facebook as the most used social networking service by worldwide monthly active users. Quantcast estimates Facebook has 138.9 million monthly unique US visitors in May 2011. According to Social Media Today, in April 2010 an estimated 41.6% of the US population had a Facebook account. In India, Facebook has registered a growth of 132% this year, which is higher than many other countries. In some countries, such as Turkey or Chile, up to 80% of Internet users are registered with Facebook. The Russian Facebook audience exceeds 5 million people. However, company's market growth has started to stall in some regions, with the site losing 7 million active users in the United States and Canada in May 2011. The company has filed for an initial public offering (IPO) on February 1, 2012.