Worms Digest 13 September 2013

Good Morning !!!

Sensex: 19270 (1.53%), Nifty: 5680 (+1.56%)
Dow: 15301 (-0.17%), S&P: 1683 (-0.34%)
Nikkei: 14387 (-0.26%)

IIP for the month of July 2013 beats expectations : up 2.6% vs expectations of negative growth. 

Its a major uptick after the negative growth for the last 2 months. Also, IIP numbers for the month of June were revised positively from early reported decline of 2.2% to a decline of 1.8%.

The growth was driven by manufacturing and electricity output which were up 3% and 5.2% respectively. Mining continues to be negative - down 2.3% yoy.

Worms Digest 10 September 2013

Worms Digest 10 September 2013

Good Morning !!!

Sensex: 19270 (1.53%), Nifty: 5680 (+1.56%)

Dow: 15063 (+0.94%), S&P: 1672 (+1.00%)

Nikkei: 14356 (+1.06%)

TRAI recommends sharp cut in reserve prices for spectrum auction and also seeks to bring clarity on various contentious issues

• Seeks clear roadmap indicating quantum of sepctrum  which will be available in future along with timelines - a positive for incumbents as it will allow better decision making and cashflow planning
• No reservation of spectrum for Renewal Licensees (Refarming) in 900 or 1800 MHz bands - a  big negative for incumbents.
• Recommended reserve prices are almost 30-60% lower than the last auction carried on in March 2013.

• Read the entire policy at 
• Overall though refarming has not been done away it is not an incremental negative. In fact, the big positive is a genuine effort by the government to do away with the 'regulatory uncertainty' over the sector and the aggressive stance that TRAI (and effectively DoT) would take against CAG which was leading to policy paralysis. 

Worms Digest 06 September 2013

Good Morning !!!

Sensex: 18980 (+2.22%), Nifty: 5593 (+2.66%)

Dow: 14937 (+0.04%), S&P: 1655 (+0.12%)

Nikkei: 14065 (+0.08%)

Roll back of capital control measure expected soon

• In order to stem the free fall of rupee Reserve Bank of India had cut down limit for overseas direct investment by Indian companies  under automatic route from 400 per cent of the net worth to 100 per cent. RBI also restricted the amount of money residents can invest abroad from USD200000 to USD75000 per annum. It also banned purchase of immovable property abroad. 
• Market participant had come heavily on the government claiming these to be highly regressive measures which then won the assurance of the Finance Minister that these are only temporary measures and will be rolled back at opportune time.
• With INR now back to 66 from a low of 68.8 agains USD, particularly, responding, favorably to measures announced yesterday by new Governor, it is now believed that these capital control measure which anyway failed to achieve the purpose would be rolled back soon.

Credit rating agency Moodys downgraded sub-ordinated debt of  11 Indian Banks. 

• Apart from poorly managed (high NPAs and low CAR) state owned public sector banks like State Bank of India, surprisingly, it has also downgraded high quality and highly safe private sector banks like HDFC Bank and ICICI Bank.  
• Most of these bankers of denied any negative impact of this move on their ability to raise the cost effective fund abroad. 
• Timing of these moves is amusing as yesterday only the new Governor of Reserve Bank of India lifted the cap on overseas borrowing to 100% of unimpaired tier I capital from 50% earlier. 

Oblivious of slowdown Rs.1500crs Hatsun Dairy is on expansion spree

• The company will spend Rs.50crs to expand milk processing capacity by 3,00,000 liters/day from the existing capacity of 25,00,000 liters per day. It claims its milk brand 'Arokya' to be leader in its markets, namely, states of Tamil Nadu and Andhra Pradesh.
• The curd production will also go up by 30000lts per day
• Company will also be expanding its ice-creame chain Ibaco in adjacent states of Maharashtra and eastern state of Odhisa. The ice-creme phenomenon is born mostly of Gujarat which hosts 3 leading brands of the country - Amul, Vadilal and Havmor.  

Bankers to approve soon Rs.7000crs debt restructuring plan of Elctrosteel Steels

• Trapped in downturn and the delayed 10000crs integrated steel plant Electrosteel group is set to get a breather. The company CDR (Corporate Debt Restructuring) proposal is set to be accepted by bankers in coming few weeks.
• Last year company reported Rs.280crs of loss and the same fate continued in June 2013 quarter when it reported further Rs.70crs of loss. However, surprisingly, interest cost was just Rs.44crs. So the company must be capitalizing interest cost to the tune of Rs.120-150crs every quarter. More importantly, there is no way it can pay this high interest cost as the business doesnt generate that kind of money. 
• In order to further the delayed projects the company needs another Rs.3000crs of loans. It would take gutsy banker to give that kind of money when you already have a whopping dues unpaid. 

Other interesting new bites

• Modi is the most desired leader to head the country in CEO poll conducted by Economic Times. Almost 3/4th voted for him. Rahul Gandhi got a mere 7% vote.
• The survey also pointed that the worst is over for the Indian economy.
• Tall claims of USD8-15bn flows from FCNR deposits by various bankers and research analysts may fall short of promises. 
• The Central Electricity Regulatory Commission (CERC) is going to hold on September 13 hearings on the compensatory tariff necessitated for power projects of Tata Power and Adani Power by the increase in Indonesian coal price  
• Power Finance Corporation, the nodal agency for ultra mega power projects (UMPPs), has kickstarted bidding process for two such projects in Orissa and Tamil Nadu, ending five years of uncertainty.
• Indian Railways, which is planning a 1400MW captive nuclear plant to become self-sufficient in energy, has zeroed in on Jabalpur in Madhya Pradesh and Mahi Banswara in Rajasthan as potential sites for its R14,000-crore plant

""Risk is what's left over when you think you've thought of everything." 
-- Carl Richards

Worms Digest 05 September 2013

Good Morning !!!

Sensex: 18567 (+1.83%), Nifty: 5448 (+2.00%)

Dow: 14930 (+0.65%), S&P: 16513 (+0.81%)

Nikkei: 14054(+0.54%)

Reforms roll-on : Government clears Pension Bill

• PFRDA Bill 2011 (Pension Fund Regulatory and Development Authority) was cleared yesterday in Lok Sabha as the opposition party BJP supported the same
• The Bill was due since 2005 and will now strengthen the sector with a regulator in place and opening up  the sectors to more established and experienced foreign players. The foreign investment limit will be same as that for insurance sector which is 26% today. 

Raghuram Rajan charts the course to liberalize the financial markets

• Policy actions to immediately address rupee depreciation
• Allows exporters and importers to re-book cancelled forward exchange contracts to the extent of 50 per cent and 25 per cent of the value, respectively. Currently, exporters are allowed to re-book cancelled forward exchange contracts to the extent of 25 per cent and importers are not allowed to do so 
• to improve dollar inflows RBI to open a window to  the banks to swap the fresh FCNR (B) dollar funds, mobilised for a minimum tenor of three years and over at a fixed rate of 3.5 per cent per annum for the tenor of the deposit
• allow banks to borrow 100 per cent (from 50 per cent currently) of their unimpaired Tier-I capital from overseas. These borrowings can be swapped with the RBI at a concessional rate of 100 basis points below the ongoing swap rate
• In a separate notification RBI also allowed foreign companies to borrow from the parent under ECB route foe general corporate purpose provided the loan is not less than 7 years of tenure and 

• Key takeaways from Governor's speech which outline his thought process and future course of actions 

1. He outline the primary objective of the RBI is monetary stability which would essentially demand a stable rupee and low inflation expectations. As mentioned earlier he simultaneously announced the above listed measures to improve dollar inflows. To anchor lower inflation expectations, I expect him to raise the policy rates on 20th September 
2. The second important aspect he stressed upon was inclusive growth. Since its important to spread wings to cover as much population, he said stronger banks will no more require branch licenses which is a great step. 
3. New bank licenses will be announced within or soon after Mr Sinha, Deputy Governor of RBI who is spearheading this process retires which is in January 2014. Interestingly, he also mentioned that there are considering of making bank licenses available thereafter as well on continuous basis. Also under consideration is providing bank licenses to large and strong co-operative banks
4. Emphasizing role and importance of foreign banks in India, he mentioned about the desire to provide near national treatment to foreign banks subject to conditions. This will severally increase the depth of financial sector not to mention competition and productivity of the sector.
5. In order to make productive use of limited financial resources he said there is need to divert savings to productive assets and hence need to lower the current high lever of SLR requirement. However given the fiscal constraints it would take longer time than desired to achieve the same objective
6. Will be reviewing PSL norms to make more efficient
7. Deepen fixed income market - will introduce 10 year interest rate futures. Will generally follow policies removing restrictions on trading and deepening fx and FI mkts 
8. Rajan's baby "Bill Factoring Exchange" for MSME will see the light of the day. 
9. Will come up with policies to strengthen Debt Recovery Tribunals and Asset Reconstruction Companies. Most welcome is step to collect credit data across the banks of a particular lender - common exposures under stress can be managed proactively at least in theory 
10. Stressed the need to clean balance sheet and help roll on the stalled projects. Expect concessional allowances by banks to infra sector
11. In order to protect household sector from persistent high levels of inflation in India RBI will come out with Inflation indexed savings certificates by November 2013

Other Important Developments

• Heavy Industries Minister Praful Patel is pitching for stimulus to revive automobile industry however given the fiscal constraints its very unlikely that Ministry of Finance will accept any such request
• Karl Slym, CEO, Tata Motors confirmed that diesel variant of Tata Nano will be launched during the current year.
• No gold was imported in the month of the August as Customs department had not put in place the requirements as per the RBI guidelines...during the month of September 30mn ton of imports are expected. Meanwhile jewelers are coming under pressure due to short supply of the metal

"For those properly prepared in advance, a bear market in stocks is not a calamity but an opportunity"

...Sir John Templeton

Worms Digest 28 June 2013

Good Morning !!!

Sensex: 18876 (+1.75%), Nifty: 5682 (+1.68%)

Dow: 15024 (+0.77%), S&P: 1613 (+0.62%)

Nikkei: 13649 (+3.29%)

CCEA approves the hike in gas price to US$8 from US$4.2

• In a pro-reforms move cabinet committee on economic affairs (CCEA) approved the hike in domestic natural gas prices to $8 effective April 1, 2014. Most of the people had doubted this move, given the strong opposition of fertiliser and power ministeries. Also given the election year ahead, such a move was considered to be detrimental of vote bank sentiments. 
• The hike in gas prices will be most benefitial to ONGC and Oil India. Reliance will also be major beneficiary if it manages to improve its gas production levels.
• The price of gas will be reset quarterly. 
• The brunt of higher gas price will fall on consumers who will have to pay higher prices for electricity, CNG and fertilisers which could ultimately lead to higher food prices. 

Govt raised MSPs of various crops in moderate fashion

• Minimum support prices for paddy was raised by 4.6% to Rs.13.10 per kg for normal paddy and 5% to Rs.13.85 per kg for grade A paddy
• Cotton MSPs saw marginal increase of 2.5-3% to Rs.37/kg for medium staple and Rs.40/kg for long staple. 
• MSP of yellow soyabean has been increased by Rs3.20 to Rs25.60/kg and for soyabean (black) by Rs3/kg to Rs30/kg
• Tur dal prices have been held constant.
• Government appears to have done fine job of balancing urge for higher MSPs in wake of cheering farmers closer to elections and on the other hand tackling inflation which has been the biggest menace over the last 2 years.

"Losers average losers"

...Paul Tudor Jones

Worms digest 27 June 2013

Good Morning !!!

Sensex - 18552 (-0.41%), Nifty - 5589 (-0.36%)

Dow -14910 (+1.02%), S&P - 1603 (+0.96%)

Nikkei - 13081 (+1.92%)

The Games ADAG Play - The Sasan Hole

• CERC has cancelled the commissioning status of Reliance Power's Sasan power project which was earlier claimed to have got commissioned during March 2013
• The date of commissioning is important as power tariff were set to increase 70% from the 3rd year since the year of commissioning which in this case would have been FY13

Health Ministry suspends sale of Rs.600crs diabetes drug - Pioglitazone

• Pioglitazone which continues to sale in major markets like US and Europe has been suspended in India by health ministry due to its sever side effects like urinary bladder cancer and heart failure
• Many companies including Ranbaxy, Lupin, Sun Pharma will get impacted due to this ban

Karnataka opens for FDI in retail

• The new congress government in Karnataka has given its nod for 51% FDI in multi-brand retail
• This is a big positive for Jubilant Bhartia's  retail chain, Total which is currently present only in Bangalore city. Total is the second largest chain in Bangalore with 5 hypermarkets  with over a million retail space.

Telecom

• In much awaited yesterday's EGoM meeting on spectrum pricing, EGoM has now thrown ball in TRAI's court and asked the regulatory body to recommend the right spectrum pricing within 60 days.
• Bharti has wrote a letter to Telecom minister Sibal to intervene in the matter of Rs.660crs penalty for 3G roaming pacts 
• Reliance Communications has tied up with Apple to offer iphone at cheaper tariff plans

GM crop hit by Politics and Policy deadlocks

• Just weeks after appraisal committee on genetic engineering gave its nod for various field trials for potential GM  crops, government has put the proposal on hold. 

'We don't like trading agony for money.'

....Charlie Munger

Worms digest 25 June 2013

Good Morning !!!

Sensex - 18541 (-1.24%), Nifty - 5590 (-1.37%)

Dow -14660 (-0.94%), S&P - 1573 (-1.21%)

Nikkei - 13147 (+0.65%)

Telecom - Keep fingers crosses

• Pricing war and competition may not be over yet...Sistema which offers services under MTS brand has launched new scheme under Rs.199, 30 day plan which entails unlimited  calls on its network...i.e. MTS to MTS. Customers also get 1000 minutes talk time on non-MTS networks.  
• Rumor mill also suggest that Sistema is in talks to buy out Tata's stake in telecom venture with Japan's NTT Docomo, which, suggests aggressive plans from Sistema for Indian telecom market and pricing will remain a key instrument to drive its market share. 
• Government is set to announce spectrum pricing today and telecom player would be keeping fingers crossed as to how much further reduction in pricing would be made after failure of auction in March. 

Jet-Etihad deal takes set back as ball is now in SEBI's court

“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”
...Paul Samuelson

Good Morning !!!

Sensex - 19246 (+0.12%), Nifty - 5822 (+0.15%)

Dow -15112 (-1.35%), S&P - 1629 (-1.39%)

Nikkei - 13101 (-1.08%)

Ranbaxy fined Rs.80crs for anti-competitive pact

• European Commision levied a penalty of  €1,03,23,000 on Ranbaxy for delaying the marketing of its generic version of depression drug citalopram made by Danish company Lundbeck.
• In 2002, Lundbeck agreed with each of these companies to delay the market entry of cheaper generic versions of its branded citalopram, a blockbuster anti-depressant. These agreements violated EU anti-trust rules that prohibit anti-competitive agreements.
• Ranbaxy has decided to appeal against EU ruling as it believes that EU decision is based on misrepresentation of the facts.

Exide to be badly hit on rupee depreciation and falling OE demand

• P.K. Kataky, Managing Director and CEO told Business Line that Exide would be badly hurt by sharp depreciation in rupee as 50% of raw materials is imported.
• OEMs have cut their demand by 10% which would lead to lower capacity utilization. Exide derives 60% of sales from OEs and hence would be badly impacted due to lower  utilization and inability to pass raw material price hike to OEMs

Tata Motors unveils 8 refreshes and chalks out 2020 game plan for Cars

• Tata Motors unveiled 8 newly upgraded and enhanced products, across 5 brands
• Indigo eCS - significant changes in interiors as well exteriors
• Sumo Gold - refined engine; dual A/C cooling, USD connectivity
• Nano - indbuilt music system, 
• Indica - new transmission and suspension, dual tone interiors and exterior graphics
• 3 CNG  Variants  of Indigo, Indica and Nano
• Safari Chrome Explorer Edition - enhanced accessories 
• Also announced was HORIZONEXT, a four pronged customer centric strategy
• Intense product focus
• Focus on world-class manufacturing practices
• Enriched customer purchase experience
• Consistent quality of service
• HORIZONEXT will come up with a product pipeline till 2020 to rejuvenate the dyeing passenger car business 

"In the corporate world, if you have analysts, due diligence, and no horse sense, you've just described hell." -- Charlie Munger

Worms Digest 11 June 2013

Good Morning !!!

Sensex - 19441 (+0.06%), Nifty - 5878 (-0.05%)

Dow -15239 (-0.06%), S&P - 1643 (-0.03%)

Nikkei - 13513 (-0.01%)

RBI buries Cobrapost with minor fines to Top 3 private banks 

• RBI levied penalty of Rs 1 crore, Rs 4.5 crore and Rs 5 crore on ICICI Bank, HDFC Bank and Axis Bank, respectively for violation of KYC norms in its finding from investigations carried post Caobrapost allegations.
• However the central bank didnt find any gross violations or any prima facie evidence of money-laundering
• Effectively  RBI has burried the Cobrapost sting operations with minor fines to these banks

Advaniji plays the Last card - resigns for the third time in eight years

• Indian politics took a major turn today as Mr. L K Advani, last of the stallions who founded the country second largest political party resigned from three of the key posts apparently in protest of Mr. Narendra Modi being appointed as Chief to lead the party in 2014 elections. 
• The party is trying to pacify the senior leader but its unlikely to go back on its decision to make Modi the leader.
• Advaniji never had a great relationship with RSS which though reluctant earlier has now thrown its support behind Modi.

ITC is looking at entering Tea and Coffee market

• ITC is reportedly looking at strengthening its FMCG basket with addition of Tea and Coffee segments
• ITC has a commodity trading business which has helped the company gained immense understanding of commodity markets in general and believes its strong strong sourcing skills should be capitalized through forward integration

Race for WB's 31% stake in Haldia Petrochemicals

• RIL and IOC is locked in race to acquire 31% stake of West Bengal govt in India's second largest petchem company, Haldia Petrochemicals.
• The battle will be tough as many more private (Vedanta group, Jindals and Ruias) as well public sector undertakings like ONGC and GAIL are also interested in the assets
• The Chatterjee Group, co-promoters of HPL will have the first right of refusal 
• HPL has a capacity of 0.7 mtpa of ethylene and 0.35 mtpa of polymers

Worms digest 31 May 2013

Good Morning !!!

Sensex - 20215 (+0.3%), Nifty - 6124 (+0.3%)

Dow -15325 (0.1%), S&P - 1654 (+0.4%)

Nikkei - 13808 (+1.6%)

PSU Banks profitability to hurt from higher provisioning requirements 

• Reserve Bank of India increased the provisioning requirement for fresh standard restructured advances to 5 per cent from 2.75 per cent.
• For the existing restructured book, provisioning will be raised to 5 per cent in phases over three years starting June 1.
• From FY16 the concept is to be done away and all restructured assets will be classified as NPAs.
• However delay of one year for non-infra projects and two years for infra projects where the terms are unchanged without NPV loss will not be treated as restructured, thus allowing them a second restructuring without the compulsory NPA classification. This could limit the stress on profitability to a large extent.

Bharti becomes sensible - on deleveraging mode 

• Bharti is looking to monetize its DTH, fixed line and enterprise business over next 2 years.
• The first on the block would be DTH arm where it expects to garner USD250mn through a 25% stake sale
• The next in the line is fixed line business and its rumored to be valued at USD3bn and the last to go enterprise business is valued at USD1.2bn. 
• The amount to be raised through stake sale would depend upon how much stake the company is willing to pare though sources say it would like to keep control.
• 
  

M&M -  The baton passes to tractors for FY14 

• Driven by strong realisations in tractors M&M posted a strong 12% growth in sales to Rs10486crs which was almost Rs 500crs more than most analyst forecast. 
• Operating margins at 14.4% were also ahead of forecast and improved a great 240bps yoy.
• However going forward management sighted challenging environment for UVs which were stars for Fy13 with 30% growth. UV growth would slowdown to single digit in FY14. 
• The tractors sales seem to have picked up strongly and management expects same to be in the range of 6-8% for FY14 with an upward bias to estimate.
• Since the margins in tractors are almost double of autos FY14 would see 10-15% profit growth despite poor auto show. The auto business would see revival in 2015 when the company would launch new vehicles from 3 new platforms underway.

 PFC - shopping for bank license?

In an unusual move PFC has applied to Ministry of Finance to allow it to purchase stake in PSU banks substantial enough to allow it a board seat.

 Cyrus Mistry on a cleaning spree

After Tata Chemicals took a hit on it's European assets in light of falling demand, now, Indian Hotels took a Rs 439crs hit on account of fall in value market price of Orient Express which the company wanted to acquire first through hostile takeover and then through friendly negotiations.

 Maruti goes Singur way

Maruti's proposed plant in Gujarat would face major hurdle as 36 out of 44 gram sbhas have passed a resolution to oppose the use of agri land for industrial purpose for its plant.

 ONGC's aggressive growth plans

• ONGC has tied up with ConocoPhillips to explore and develop the Cambay, Krishna Godavari (KG), Cauvery and Bengal. ONGC is first copany in the country to hit shale gas reserves in a pilot project carried at  Raniganj (Ichhapur)and North Karanpura blocks of Damodar Valley. Of total 63 trillion cubic feet potential shale gas reserves within the country 34 trillion are from Damodar basin. Of this 8 trillion are revocable reserves.
• ONGC has started final negotiations to buy Videocon's 10% staken in Rovuma basin gas block in Mozambique. "If Anadarko is willing to sell its 10% stake to us, we would buy it as well", said ONGC chairman Sudhir Vasudeva. 

 Spencer's - back in growth mode, going hyper

• After shutting more than 60 stores in last 3 years and shunting its convenient stores format, Spencer has aggressive plans of spending 600crs  over ne5 4 years to almost triple it's Hyper store format to 80 stores from 26 as of now. 
• As of now, the company has 132 stores, including 26 hyper stores, 14 super market and 92 daily (convenient) stores

“As a speculator you must embrace disorder and chaos.”

....Louis Bacon

Worms Digest 30th May 2013

Good Morning !!!

Sensex 20066 (-0.4%) Nifty 6104 (-0.1%)

Dow 15303 (-0.7%) S&P 1648 (-0.7%)

Nikkei - 13933 (-2.3%)

• OECD slashes India's growth forecast to 5.3% for 2013 

• RBI has announced auction of inflation-indexed bonds worth Rs 1,000 cr on June 4. The new 10-year inflation indexed bonds will be reckoned as an eligible investment in government securities by banks for the statutory liquidity ratio purpose.

 Coal Regulator to curtail Coal India's freedom to price the coal

• Ministerial panel gave its nod of Coal Regulator and the proposal has been passed on to Cabinet for its approval. Though the regulator will not have any say in fixing domestic prices the ministerial panel recommended need for power to counter the methods and practices of a monopolistic player through guidelines for fixing and revising coal prices.   

RIL woes over...rerating ahead?

• S&P has upgraded RIL rating sighting that rating agency is now more confident about the growth prospectus of the company over next 3-4 years and is more confident about better deployment of hitherto unused cash. RIL plans to deploy USD30bn capex over next 3 years primarily on exploration activities which the rating agency expects to reverse the decline in output from KGD6. S&P also anticipate RIL margins to improve secularly - pet coke gasification to improve refining margins whereas petchem margins to improve through higher share of value added products and vertical integration.

ONGC misses estimates but underlying performance was strong

• ONGC profits for 4th quarter declined 40% to Rs 3,387 cr from Rs5644 crs last year despite 14% rise in sales to Rs 21,389 cr and lower subsidy burden of Rs.12,312 cr compared to Rs 14,170 cr last year. The lower profit is due to ONGC bearing more expenses on statutory levies, higher operating costs due to rupee-dollar fluctuations, dry wells (failed exploration) and depletion costs, among others. The company has raised capex from Rs 35,049 cr in 2013-14, up from Rs 29,503 cr last year. The worst seems to be over for ONGC's overseas arm, OVL and the same would be a key catalyst for ONGC's growth ahead. http://www.business-standard.com/article/companies/global-business-will-be-ongc-s-growth-vehicle-d-k-sarraf-113052900876_1.html

Tough time ahead for Maruti

• Hyundai to launch 4 new models to increase its domestic market share. This would include a sub 4 meter entry level sedan which would compete with Dzire and Amaze. Though sub 4 meter car would take some more time, a new sedan code named BA would get launched by September. The car would come with 1.1ltr diesel and 1.2ltr petrol engine options. Other 2 models are a compact SUV to fight gain share of growing pie of Duster & EcoSport (Maruti is also expected to launch a compact SUV in 2013-14) and an MPV which would be positioned against Ertiga.

 

Andhra Bank on expansion drive

• Andhra Bank in bid to go national from local has imitated a rebranding exercise. It plans to change its slogan from 'Andhra Bank, for all your needs' to 'Andhra Bank, Where India banks'. It will also open 100 branches outside state of AP during 2013-14.

 
Balmer Lawrie to acquire tour operator

• Balmer Lawrie & Co Ltd plans to acquire a domestic company offering tour operating services. Balmer Lawrie plans to invest close to Rs 500 crore over next two-to-three years in new projects including the setting up of a logistics hub near Kolkata and Vishakhapatnam and a steel barrel plant in Navi Mumbai. It will soon acquire 55 acres of land for setting up the logistic hub near Kolkata. The estimated investment on the project is close to Rs 150 crore. The company has also entered into a joint venture with Visakhapatnam Port Trust for developing another logistic hub at an estimated investment of Rs 200 crore.

 
TBZ profit triples 

• TBZ has tripped its net profit for the forth quarter of fiscal 2013 to Rs 25crs, the full year profit was Rs.85crs. Company has 26 showrooms across 20 cities. The board has declared a dividend of Rs.2.5 per share and approved proposal to merger its two wholly owned subsidiary Companies, viz. Tribhovandas Bhimji Zaveri (Bombay) Limited and Konfiaance Jewellery Private Limited with TBZ under the Scheme of Amalgamation.

TCS wins Rs1100crs DoP contract...to strenghten in US government business 

• TCS bags Rs1100 crs system integration contract from Indian Post which would lead to computerisation and electronic linkages of 160000 post offices across the country. TCS is also expanding its footprint in US government business http://www.business-standard.com/article/companies/tcs-forays-into-us-govt-space-113052900937_1.html

 IndiGo expands flights

• IndiGo has added 2 new routes to its network. The airline will operate its new daily direct flight between Mumbai and Jammu, and Chennai and Kochi.
• It would also launch second daily flights between Mumbai and Srinagar, Chennai and Thiruvananthapuram, Mumbai and Trivandrum, Jammu and Srinagar and third direct flight between Mumbai and Kochi, an official statement said.

Hypercity goes compact

• Hypercity’s new store in Bangalore is the first compact store in the hypermarket category with about 33,000 sq ft instead of the usual 55,000-60,000 sq ft. Mark Ashman, CEO, Hypercity, said, “30,000 sq feet is still a very big store, and we have taken out two categories that are more destination type. So, by default, this becomes more of a neighbourhood mall offer.”

”I’m only rich because I know when I’m wrong…I basically have survived by recognizing my mistakes.”

....George Soros

Worms Digest - 29 May 2013

Good Morning !!! 

Sensex 20160 (+0.65%) Nifty 6111 (+0.46%)

Dow 15409 (+0.69%) S&P500 1660 (+0.63%)

Nikkei 14325 (+0.1%)

• DoT has threatened to cancel 3G spectrum of telecom companies on the ground that the 3G roaming arrangements amounts to breach of contract for the giver of the spectrum. A big negative for telecom companies as I) it will slowdown the new 3G subscriber acquisition II) there could be hefty penalties even if license didn't get cancelled III) it brings back the regulatory concerns and uncertainties to the sector just when it appeared to be getting over IV) Payback for 3G investment would get even elongated if roaming is not allowed and could also lead to material asset impairment and valuation of these companies...not to mention the unnecessary diversion of management time, energy and money which could be otherwise focused on the business issues.
•  Honda Motorcycle and Scooter India (HMSI) has increased its two-wheeler production capacity by 15 per cent to 46 lakh units.  The company’s new plant in Narsapur, Karnataka will have a 12 lakh units production capacity in Phase I and further 6 lakh units in phase II. With the addition of the Narsapur plant, Honda will have a total of three plants including Manesar (Haryana) and Tapukara (Rajasthan).The Narsapur plant will produce Dream Yuga motor cycles and Activa scooters. 
• Gold Loan financing restrictions - Reacting to the bank’s circular, the Association of Gold Loan Companies (AGLOC) said gold loan NBFCs lend against jewellery of households only.Therefore, the move to forbid NBFCs from lending against gold coins, bullion, primary gold would have no impact on gold loan NBFCs, George Alexander Muthoot, President, AGLOC, said in a statement.
• SBI & associate bank merger - On merger of associate banks, Pratip Chowdhary, SBI chairman said that  the bank was actively pursuing the matter now as its capital has improved. He, however, did not reveal the identify the target for merger but said that he expects to consummate merger with one of the associate banks during the second quarter.
• Mahindra Satyam is planning to hire about 2,000 freshers during FY14. Beyond that, company will hire on just in time basis. The company has almost put a cap on the traditional campus hirings to take freshers in large numbers. The company employs 36,067 people as of March 31, 2013, a net addition of 2,714 when compared to the same period last year. But it is down by about 1,000 when compared to the figure in quarter ended December 31, 2012. The company is going to increase its investments on capacity expansion. “We spent Rs 122 crore in the quarter (fourth quarter) and added 500 seats. We are planning to spend Rs 500 crore this year to build 1,000-1,500 seats,” Vasanth Krishnan, Chief Financial Officer, said.
• Coal prices hike to boost Coal India revenues by Rs.2500 but consumers to feel pinch...captive to get hurt most - CIL has rationalised prices of thermal coal used in power generation. Prices of two premium grade (G-3 and G-4) coal were reduced by 12 per cent. The price of G-5 grade remains unchanged. And, prices of all inferior grades from G-6 to G-17 (2200-5800 kilo calorie per pg) were raised by 10 per cent, on an average.Captive power generation in steel, cement, aluminium and many other energy intensive sectors will get costlier, as thermal coal is sold at 35 per cent higher price (when compared to the regulated power sector) to sectors enjoying the benefit of market determined product pricing. According to Subhasri Nandi, Secretary General of Coal Consumers’ Association of India (CCAI), a quick estimate suggests generation cost of captive power units may go up by as much as 22 paise a unit. “Power consumers by and large using the inferior quality of coal will be adversely affected by such revision… It would affect specially the non-power utilities, already paying 35 per cent more (price for fuel) than the power sector,” she said.
• Management change at CESC - Sanjiv Goenka, Chairman of the RP-Sanjiv Goenka Group, was appointed as the new Chairman of CESC. Sanjiv, previously the Vice-Chairman of the company, succeeds his father, late R.P. Goenka. Sumantra Banerjee, Managing Director of CESC since 1992, will step down with effect from July 31. He will be replaced by Aniruddha Basu, who will take over on August 1. Basu is currently the Executive Director (Distribution Services). The first unit of the 2 X 300 MW Chandrapur (Maharashtra) project, Goenka said, will be on-stream next month. The second phase is expected to be operational in October. The 2 X 300 MW Haldia unit is under construction. The project will be operational between September and December 2014.With a 40 MW wind energy project operational in Jaisalmer (Rajasthan), CESC is looking for more opportunities in the wind-farm sector in Gujarat and Rajasthan. Spencer will be de-merged into a separate retail entity through a “mirror-level de-merger” followed by an initial public offering (IPO)
• American Tower Corporation to acquire Tower Vision who owns 8000 telecom towers for Rs 3,200 crore, a transaction that will enable the US company to significantly scale up its presence in India. ATC is offering Rs 40 lakh per tower, marginally lower than the Rs 46 lakh per tower GTL Infrastructure paid for acquiring Aircel's tower business. 
• Sun Pharmaceutical expects revenue growth of 18-20 per cent for FY14 and would spend 800crs on capex. Company would be filing 25 generic drug applications in US during FY14.

In this game, the market has to keep pitching, but you don’t have to swing. You can stand there with the bat on your shoulder for six months until you get a fat pitch

....Warren Buffett