MARKET OUTLOOK 24TH MARCH 2015

Dear Customer,

 

Markets always tend to be interesting with something or the other happening all the time. Our Morning Mantra is released before the opening bell and it includes the market commentary along with Corporate & Global news for the day.

 

• U.S. stocks erased modest gains in the last 15 minutes of trading, finishing slightly lower on Monday

Dow Jones	18116.0	-11.6	-0.06%
Dow Futures	18016.0	-17.0	-0.09%
Hangseng	24433.9	-60.6	-0.25%
Nikkie	19718.6	-35.8	-0.18%
SGX Nifty	8555.0	-16.0	-0.25%

 

• Asian stocks widened losses across the board early Tuesday as a preliminary survey of China's mammoth factory sector served up new worries over the state of the world's second-largest economy
• Market is expected to open on lower note and likely to remain range bound during the day.
• The government will borrow a gross Rs 3.6 lakh crore in the first half of the financial year starting next month, about 60% of the full-year gross borrowing estimate of Rs 6 lakh crore, for 2015-16.Net borrowing for the first half, through issue of bonds, is expected to be Rs 2.25 lakh crore, versus the full year target of Rs 4.56 lakh crore, Finance Secretary Rajiv Mehrishi said on Monday. The government and Reserve Bank of India usually front-load to the tune of 60-65% of the full year's budgeted requirement
• Dr Reddy’s Laboratories Limited has entered into a licencing agreement with Hetero Drugs Limited to distribute and market chronic Hepatitis C medicine Sofosbuvir 400 mg under the brand name Resof in India.
• The Delhi High Court on Monday granted an interim relief to Jindal Steel & Power Ltd by restraining the government from allocating two coal blocks, for which the company emerged as the successful bidder during a recent auction, to state-run Coal India Ltd.
• Jindal Stainless has received approval from stock exchanges to restructure its businesses, a move aimed at boosting profitability and paring debt.
• SpiceJet has resolved a legal dispute over aircraft rentals with one of its lessors, which will now allow the airline to retain three Boeing 737-800s in its fleet that has seen substantial reduction due to the financial crisis last year.
• To reduce its debt by nearly 25%, HDIL hopes to monetise all its non-core assets in coming fiscal and expects to garner around Rs 750 crore which will be utilised for paring debt
• Blue Star is planning to set up a unit in South India at an expected investment of Rs 150 crore by December 2016,
• Tech Mahindra, HCL Technologies eye USD 350 million stake in Geometric
• CCI approves merger of Shasun Pharma with Strides Arcolab
• USFDA has issued import alert to Aarti Drugs for its formulations plant which contributes 2.5% of company’s revenues.
• Vardhman Textiles: Analyst Meet Update - Institution Desk: We attended the analyst meet of Vardhman Textiles (VTL) held on 23 March 2015. The reason for holding the meet at this juncture is that the company completed most of its cotton procurement in the current quarter and is in a better position to clarify its cotton procurement policy. VTL maintains cotton inventory of eight-nine months. The management appeared confident on the medium to long-term outlook of the domestic textile sector in general and the fabric segment in particular. It has given guidance of higher dividend payout in future on account of lower estimated capex and higher cash profits. The company is planning to reduce its debt by Rs12bn in the next couple of years. Net debt-equity ratio for FY15 is seen at 0.7x. The management gave guidance of a steady operating margin in the range of 18%-22%. This will be mainly driven by likely growth in high-margin fabric business. Revenue growth for the next couple of years is seen muted because of almost full capacity utilisation. The company has historically been providing for higher depreciation compared to industry norm. Moreover, the recent change (reducing the useful life of machinery for depreciation purpose) is expected to result in an additional charge of Rs1.7bn, which in turn will reduce profits.