Sensex, Rupee Rally; Tata Motor Net Doubles

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

Indian rupee strengthened on a global rally led by Asian stocks and improved investor risk appetite in emerging markets. The benchmark index also gained after closing at a three-month low on May 25.

[R]5:00 PM Mumbai, 7:30 AM New York – Stocks in India continue to rally on positive earnings and global markets rally. Rupee advanced. Tata Motors net more than doubled on lower costs and rising unit sales volume. Alstom and Schneider offer to buy 20% in Areva T&D. Reliance Industries makes fifth oil discovery.[/R]

Indian rupee strengthened on a global rally led by Asian stocks and improved investor risk appetite in emerging markets. The benchmark index also gained after closing at a three-month low on May 25.

The Sensex index in India increased 196.66 or 1.18% to 16,863.06 and CNX Nifty index rose 63.40 or 1.27% to 5,066.50. Among the Sensex 30 stocks, 24 rose and 6 fell.

On BSE trading, 1,900 stocks advanced, 878 declined and 93 were unchanged.

Shares of six software exporters underperformed the market as the rupee strengthened against the dollar.

Rupee edged higher 57 paisa to Rs. 46.72 against one dollar.

Bonds in India continued to fall as payment of advance taxes and mobile phone license fee crimped the cash in the financial system.

The size of the Reserve Bank’s daily reverse-repurchase auctions, an indicator of surplus cash in the system, dropped to an average of 6,400 crore rupees each day this week from 42,800 crore rupees last week, pushing the overnight inter-bank rates to their highest levels since March.

The wholesale price index in India decreased 0.10% to 298.9 from 299.2 for the previous week. For the year ending in the week average inflation surged to 15.90% compared to 6.97% in the same period a year ago.

Birla Sun Life Asset Management Co, India’s fifth–largest money manager is planning to boost allocation to stocks in its portfolio.

Birla, with 80% of its assets under management of nearly 79,000 crore rupees ($17 billion) in bonds, is profiting from the biggest bond rally in the year, said the company’s CEO, A. Balasubramanian in an interview at his Mumbai office on May 26.

The company is planning to increase its stock holdings from the current 20% to as much as 30%, as earnings will withstand slower global economic growth as Indian companies are more focused on the domestic market and have the least share among Asia based companies from export earnings, said Balasubramanian.

Tata Motors earnings in the fiscal year ending in March surged 124% to Rs 2,240.08 crore compared to Rs 1,001.26 crore in the year ago. Revenues increased 39% to Rs 35,393 crore from Rs 25,630 crore in the previous year.

On a consolidated basis, Tata Motors reported a net profit of Rs. 2,571 crore, a significant turnaround from the previous year’s loss of Rs 2,505 crore. Consolidated revenues increased 31% at Rs 92,519 crore.

Bharti Airtel said on Thursday that it is negotiations with banks to fund the purchase of Africa operations of Kuwait-based Zain Telecom, moving the $10.7 billion deal closer to completion.

On completion of the acquisition, Bharti would be required to pay another $700 million to Zain after a year, and assuming $1.7 billion debts associated with the African assets, the company release said.

With just one day left for the first IDR by Standard Chartered Plc to be completed, the company has yet to find buyers for nearly 84% of the $500 million of stocks it is selling in India.

Lignite production from all mines of Neyveli Lignite Corporation put together at 213.07 lakh tons is the highest for any year since inception against 215.86 lakh tons in 2008-09. Gross power generation was higher at 17,657.94 million units as against 15,797.98 million units in the previous year.

Mine-II expansion project increasing the capacity to 15 million tons annually from 10.5 million tons attained full lignite production capacity on March 12 and was dedicated to the nation by the Union Minister of State for Coal, Sriprakash Jaiswal on April 5.

Gainers & Losers

Areva T&D India Limited added 6.9% to Rs 286.10 after the consortium of Alstom Holdings and Schneider Electric along with Areva T&D Holding SA and others have made an open offer to buy 20% stake in the company.

Blue Star Limited rose 2.9% to Rs 406.00 after the company said its board will meet on Monday, May 31 to consider a proposal for purchase of a business.

D B Corp rose 1.4% to Rs 239.60 after the company’s net profit rose 45.8% to Rs 40.95 crore.

Engineers India Limited decreased 1.5% to Rs 315.55 the engineering company said fourth quarter sales rose 57% to Rs 640.3 crore from Rs 407.6 crore a year ago. Net profit for the quarter fell 21.4% to Rs 124.9 crore compared to net profit of Rs 158.8 crore a year ago.

Glenmark Pharmaceuticals Limited rose 0.4% to Rs 270.15 after the pharmaceutical company said fourth quarter sales rose 44% to Rs 709 crore from Rs 491 crore a year ago. Net profit for the quarter was Rs 102.6 crore compared to net loss of Rs 120.6 crore a year ago.

Housing Development and Infrastructure Limited increased 8.8% to Rs 228.90 after the real estate development and construction company said fourth quarter sales rose 6% to Rs 434.1 crore from Rs 408.8 crore a year ago. Net profit for the quarter rose 9% to Rs 177.8 crore compared to net profit of Rs 162.8 crore a year ago.

Indian Oil Corporation Limited rose 0.3% to Rs 341.30 after the refinery said fourth quarter sales rose 11% to Rs 66,116 crore from Rs 59,596.7 crore a year ago. Net profit for the quarter fell 16% to Rs 5,557 crore compared to net profit of Rs 6,623 crore a year ago.

Pantaloon Retail (India) Limited gained 6.1% to Rs 393.00 after the company said a board meeting will be held on May 31 to consider raising funds by various routes.

Reliance Industries Limited rose 0.7% to Rs 1,029.65 after the company said on Friday it had discovered oil in one of its exploration blocks in the Cambay Basin. This is its fifth oil discovery in the region.

Shree Renuka Sugars Limited increased 6.3% to Rs 58.65 after the company''s proposed billion-dollar acquisition of the world''s largest sugar producer in Brazil is likely to be canceled.

Steel Authority of India Limited climbed 3.5% to Rs 205.55 said fourth quarter sales rose 2% to Rs 12,229.7 crore from Rs 11,986 crore a year ago. Net profit for the quarter rose 40.3% to Rs 2,084 crore compared to net profit of Rs 1,485 crore a year ago.

Surya Pharmaceutical Limited advanced 2.1% to Rs 170.20 after the company''s board of directors approved fund raising through various routes.

Tata Motors Limited gained 5.4% to Rs 748.00 after the commercial vehicle manufacturer said full year sales rose 30.6% to Rs 91,893.5 crore from Rs 70,370.4 crore a year ago. Net profit for the year was Rs 2,571.1 crore compared to net loss of Rs 2,505.3 crore a year ago.