Elevated Industrial Production in India

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
12 May, 2010
New York City

Stocks in Mumbai traded higher after industrial production increased in March. The rise in production of more than 10% for the sixth month in a row prompted worries of higher inflation. Rupee gained. Bajaj Auto fourth quarter net triples in the fourth quarter.

[R]6:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai traded higher after industrial production increased in March. The rise in production of more than 10% for the sixth month in a row prompted worries of higher inflation. Rupee gained. Bajaj Auto fourth quarter net triples in the fourth quarter.[/R]

The benchmark index Sensex gained for a second day after industrial growth increased in March and rupee strengthened.

The industrial production index increased 13.5% in March after rising at 15.1% in March according to the statistics department said in New Delhi.

The RBI expects GDP to grow at least by 8% in the current fiscal year, compared to the estimated growth of 7.2% last year.

To increase the flow of funds into the resource-starved core sector, The Reserve Bank of India Tuesday simplified infrastructure finance companies, treated as non-banking category, to raise money from overseas markets without needing approval for as much as 50% of capital.

India has no plans to impose any tax on foreign capital inflows, said Reserve Bank of India Governor Duvvuri Subbarao in a speech in Zurich yesterday. He also clarified that the position maybe reviewed in the future.

India has attracted more than $100 billion in foreign investments in the last five years.

The Telecom Regulatory Authority of India on Tuesday suggested the price of 2G spectrum in the future should be priced on par with that of the ongoing 3G spectrum auction which is expected to be finalized in a few days. The recommendation requires approval from the Department of Telecommunications.

Demand for gold increased with the approaching Akshaya Trithiya on May 16, which is considered by the Hindus to be a very auspicious day for purchasing precious metals. Gold rose to a record today heading for the tenth consecutive annual gain as the day approaches.

The Sensex index in India increased 54.28 or 0.32% to 17,195.81 and CNX Nifty index rose 26.80 or 0.52% to 5,162.95. Among the Sensex 30 stocks, 22 rose and 8 fell.

On BSE trading, 1,163 stocks advanced, 1,594 declined and 103 were unchanged. Banking, realty shares lead intraday rebound.

Five telecom shares fell 1.1% to 5.6%, extending losses for second day, after the telecom regulator suggested one-time fee for holding radio-spectrum beyond 6.2 mega hertz based on 3G prices.

Rupee edged higher 12 paisa to Rs 45.18 against one dollar.

Gainers & Losers

Bajaj Auto Limited added 1.2% to Rs 2,149.90 after the maker of two-wheeler and three-wheeler said fourth quarter sales rose 84% to Rs 3,290.4 crore from Rs 1,787.5 crore a year ago. Net profit for the quarter rose 306% to Rs 529 crore compared to net profit of Rs 130.2 crore a year ago.

Blue Star Limited added 2.5% to Rs 403.00 after the central air conditioning and commercial refrigeration company said fourth quarter sales rose 22% to Rs 854.5 crore from Rs 699.9 crore a year ago. Net profit for the quarter rose 17.7% to Rs 78.5 crore compared to net profit of Rs 66.7 crore a year ago.

Cadila Healthcare Limited added 1.9% to Rs 586.00 after the company said on Wednesday it has received approval from the Drug Controller General of India to market its H1N1 vaccine in the country.

Everonn Education Limited rose 0.07% to Rs 383.10 after the company said its board will meet on May 19 to consider issuing convertible warrants to promoters and convertible debentures to non-promoters.

Jain Irrigation Systems Limited dropped 2.9% to Rs 950.00 after the agri-business company said fourth quarter sales rose 38% to Rs 944.1 crore from Rs 685 crore a year ago. Net profit for the quarter rose 800% to Rs 117.3 crore compared to net profit of Rs 13.3 crore a year ago.

Larsen & Toubro Limited rose 0.3% to Rs 1,548.45 after the water technology business unit secured an international order of Rs 850 crore from Public Works Authority, Qatar, for advanced waste water treatment and urban reuse.

Suven Life Sciences Limited advanced 2.1% to Rs 30.45 after the company secured a patent from Canadian and Eurasian patent offices for a new chemical entity for the treatment of disorders associated with neurodegenerative diseases.