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India Equity Research Reports, IPO and Stock News
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Market falls due to global concerns
The Indian stock market fell during the week, as the world grappled with the
volatile situation in the Middle East, especially Libya and Algeria. The Sensex
and Nifty lost 2.8% of their value each during the week, as investor concerns
grew due to the impact of rising crude oil price on the economy. Crude oil
price rose by 12.5% during this week alone, owing to concerns that the
ongoing protests in some of the oil-producing countries may affect oil
production. On a positive note, the Economic Survey has estimated GDP to
grow by 8.75-9.25% in FY2012. BSE mid-cap and small-cap indices
underperformed the large-cap counterparts during the week, falling 4.6%
and 4.2%, respectively. On the sectoral front, the capital goods index
underperformed the other indices (down 6.1%), followed by the BSE auto
index (down 5.4%). BSE oil and gas index gained 0.8% during the week.
BSE capital goods index underperforms the Sensex
The BSE capital goods index was the major loser during the week, declining
6.1% as compared to the 2.8% fall reported by the Sensex. Hardening
interest rates coupled with the prospects of their further increase on the
back of higher inflation are likely to raise the borrowing cost for industries,
which may adversely affect their growth. The expected slowdown in the
manufacturing sector may also delay capex projects, leading to fewer order
intakes for the capital goods sector going ahead. Factoring the above
negatives, capital goods stocks such as Punj Lloyd, BGR Energy, Alstom
Projects, L&T and Crompton Greaves corrected sharply during the week.
Inside This Weekly
Budget Preview : The Indian economy has the potential to grow by 10% but
has got chained to a moderate 8% GDP growth rate on account of supply
constraints, and no doubt a lot can be done on the policy reform front.
Looking ahead, we believe an increase in policy reforms and faster project
clearances would hold the key for taking the GDP growth rate beyond the
8-8.5% expectations.
Reliance Industries - Event Update: RIL and BP have announced a US $7.2bn
historic partnership deal, wherein BP will buy a 30% stake in 23 oil and gas
domestic blocks operated by RIL and a 50:50 JV will be formed for sourcing
and marketing gas in India. We maintain Buy on RIL with an SOTP-based
Target Price of `1,160.
Ranbaxy - 4QCY2010 Result Update: Ranbaxy reported below-expectation
4QCY2010 results with net sales of `2,066.2cr, down 8.8% yoy. OPM stood
at 9.1%, impacted by an increase in overall expenses. The company registered
loss of `97.5cr in 4QCY2010 compared to profit of `255.4cr in 4QCY2009.
We recommend Buy on the stock with a Target Price of `588.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Market falls due to global concerns
The Indian stock market fell during the week, as the world grappled with the
volatile situation in the Middle East, especially Libya and Algeria. The Sensex
and Nifty lost 2.8% of their value each during the week, as investor concerns
grew due to the impact of rising crude oil price on the economy. Crude oil
price rose by 12.5% during this week alone, owing to concerns that the
ongoing protests in some of the oil-producing countries may affect oil
production. On a positive note, the Economic Survey has estimated GDP to
grow by 8.75-9.25% in FY2012. BSE mid-cap and small-cap indices
underperformed the large-cap counterparts during the week, falling 4.6%
and 4.2%, respectively. On the sectoral front, the capital goods index
underperformed the other indices (down 6.1%), followed by the BSE auto
index (down 5.4%). BSE oil and gas index gained 0.8% during the week.
BSE capital goods index underperforms the Sensex
The BSE capital goods index was the major loser during the week, declining
6.1% as compared to the 2.8% fall reported by the Sensex. Hardening
interest rates coupled with the prospects of their further increase on the
back of higher inflation are likely to raise the borrowing cost for industries,
which may adversely affect their growth. The expected slowdown in the
manufacturing sector may also delay capex projects, leading to fewer order
intakes for the capital goods sector going ahead. Factoring the above
negatives, capital goods stocks such as Punj Lloyd, BGR Energy, Alstom
Projects, L&T and Crompton Greaves corrected sharply during the week.
Inside This Weekly
Budget Preview : The Indian economy has the potential to grow by 10% but
has got chained to a moderate 8% GDP growth rate on account of supply
constraints, and no doubt a lot can be done on the policy reform front.
Looking ahead, we believe an increase in policy reforms and faster project
clearances would hold the key for taking the GDP growth rate beyond the
8-8.5% expectations.
Reliance Industries - Event Update: RIL and BP have announced a US $7.2bn
historic partnership deal, wherein BP will buy a 30% stake in 23 oil and gas
domestic blocks operated by RIL and a 50:50 JV will be formed for sourcing
and marketing gas in India. We maintain Buy on RIL with an SOTP-based
Target Price of `1,160.
Ranbaxy - 4QCY2010 Result Update: Ranbaxy reported below-expectation
4QCY2010 results with net sales of `2,066.2cr, down 8.8% yoy. OPM stood
at 9.1%, impacted by an increase in overall expenses. The company registered
loss of `97.5cr in 4QCY2010 compared to profit of `255.4cr in 4QCY2009.
We recommend Buy on the stock with a Target Price of `588.
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