Sensex Recovers; L&T Net Jumps 26%

Mayank Mehta, Chandrasekhar Atreya and Darlington Musarurwa
18 May, 2010
New York City

The Sensex index rallies after L&T reported 26% increase in earnings. Tarapur Transformers makes a muted debut. Aksh Optifibre gains on capital raising plan. Bharti Airtel recovers as Fitch removes it from negative watch. TCS declined on the talks of UK government may review outsourcing deals.

[R]6:00 PM Mumbai, 8:30 AM New York – Sensex index rallies led by L&T. Tarapur Transformers makes a muted debut. PI Industries hits the roof on bonus plan. Aksh Optifibre gains on fund raising plan. Bharti Airtel recovers as Fitch removes it from negative watch. TCS slips on buzz UK Govt may review outsourcing deals.[/R]

India’s benchmark stock index rallied after two days of fall as investors felt that recent declines were high, given the outlook for domestic demand. L&T led the rally after being upgraded by JP Morgan Chase & Co and Deutsche Bank AG.

Essar Shipping Ports and Logistics Ltd said its unit Essar Oilfield Services Ltd won a contract from Vietnam’s Vietsovpetro a $40 million contract for 4,800 meter offshore drilling with a semi-submergible rig, according to a statement issued by the company to the Bombay Stock Exchange.

Mukesh Ambani-owned Reliance Industries Ltd, signed a MOU with the Russian petrochemical firm SIBUR to form a joint venture to produce butyl rubber at its integrated petrochemical site in Jamnagar Gujarat, the company said in a statement in New Delhi today.

Godrej Consumer Products Ltd plans to sell shares to pay more than half of the 185 million euros the company agreed to pay for Sara Lee’s 51% stake in their joint venture, said the Chairman Adi Godrej in an interview in Mumbai on May 14.

We will make acquisitions in Asia, Africa and Latin America and have permission from our board to raise as much as Rs 3000 crore through share sale and debt, he said in the interview.

Kolkata-based Exide Industries Ltd, plans to raise motorcycle battery capacity by as much as 60% by April next, to cater to demand from customers such as Hero Honda Motors Ltd, said the company’s Managing Director T.V. Ramanathan.

‘Cabinet approval for sale of 20% shares of the state-owned Hindustan Copper Ltd is expected this month, said the company’s Chairman and Managing Director Shakeel Ahmed in an interview today. The 10% sale to be completed via the company route will fetch as much as Rs 5000 crore following a surge in the share price this year said Ahmed.

The balance 10% stake will be sold by the government.

The Sensex index in India increased 40.20 or 0.24% to 16,875.76 and CNX Nifty index rose 23.70 or 0.47% to 5,083.60. Among the Sensex 30 stocks, 18 rose and 12 fell.

On BSE trading, 1,815 stocks advanced, 952 declined and 85 were unchanged. Consumer durables, capital goods and IT stocks gained. PSU OMCs fell whereas oil exploration stocks rose after crude oil prices rebounded from 5 month lows.

Tarapur Transformers was trading at Rs 78.20 a premium of 4.27% over the initial public offer price of Rs 75 per share.

Rupee edged lower 6 paisa to Rs 45.67 against one dollar.

Gainers & Losers

Aksh Optifibre Limited rose 1.5% to Rs 22.50 after the company said it plans to raise up to Rs 250 crore through equity issue in domestic or overseas market.

Bharti Airtel Limited rose 1.2% to Rs 269.90 after the Fitch ratings has today affirmed its revised rating at ''BBB’ and simultaneously removed it from rating watch negative.

Elecon Engineering Company Limited rose 1.0% to Rs 80.40 after the company said it has been awarded prestigious order of Rs 51.92 crore from BGR Energy for design, engineering, manufacturing, testing, supplying, erecting and commissioning of material handling and other equipments.

English Indian Clays Limited surged 16.6% to Rs 776.60 after the company''s board said it will consider bonus issue and stock-split at a meeting to be held today, May 18.

Essar Shipping Ports & Logistics Limited increased 6.9% to Rs 90.90 after its wholly owned subsidiary Essar Oilfield Services Ltd received a contract for drilling a 4,800 meter offshore well using its semi-submersible rig `Essar Wildcat''.

Himadri Chemicals & Industries Limited rose 3.7% to Rs 525.95 after the company said its board will meet on May 28 to consider stock-split.

The Karnataka Bank Ltd increased 8.1% to Rs 152.65 after the bank said fourth quarter net interest income rose 36% to Rs 130.5 crore from Rs 96.3 crore a year ago. Net profit for the quarter fell 11% to Rs 74.1 crore compared to net profit of Rs 83.1 crore a year ago.

Larsen & Toubro Limited added 3.3% to Rs 1,661.90 after the engineering & construction major did better than the market expectation with strong top-line as well as bottom-line growth for the quarter ended March 2010. The operational income for the quarter was up 28% to Rs 13,585.10 crore.

PI Industries rose 5% to Rs 487.20 after the company''s board recommended 1 to 2 bonus issue at the time of announcing fourth quarter March 2010 results.

Shriram EPC Limited climbed 3.3% to Rs 280.00 after the company secured two orders aggregating Rs 125 crore.

Tata Consultancy Services Limited fell 0.8% to Rs 738.85 after newspapers reported the U.K government may review an $850 million outsourcing agreement signed with the company.

Venus Remedies Limited gained 8.4% to Rs 276.80 after the company today said it would launch once-in-a-day injectable painkiller, Aceclofenac OD, in the country by the end of 2010.