09/04/2013

HOLD JSW Ispat Steel Ltd - Religare

HOLD JSW Ispat Steel Ltd

Fundamental View:
* JSW ISPAT Steel reported net loss of Rs 130.74 crore in the quarter ended December 2012 as against net loss of Rs 308.57 crore during the previous quarter ended December 2011.
* Ten promoter group companies of JSW Ispat Steel have sold their 6.38 per cent stake in the company amounting over 16 crore shares for Rs. 174.47 crore.
Outlook:
The company needs to revamp its operations to increase the profitability.

After falling from the major support of 9 levels, stock made a all time low of 6.50 and rebounded sharply again to 9 levels. It is important to see whether it sustain these levels or not. A decisive break below 8.50 can further lead this stock to go downside. HOLD Tata Steel Ltd - Religare

HOLD Tata Steel Ltd

Fundamental View:

* Tata Steel's consolidated net loss for the third quarter went up 27% to Rs763 crore from Rs602 crore in corre-sponding period last year. The loss was the biggest quarterly one in more than three years. Decreased demand in Europe and closure of a blast furnace affected the revenues, down 4% to Rs32,163 crore from Rs33,357 crore in the year-ago period.
* During 9M FY13, its consolidated net loss Rs 529.11 crore vs profit of Rs 4956.31 crore YoY. Its net sales was al-most flat at Rs 99236.55 cr vs Rs 98397.28 crore YoY.

Outlook:
The reforms announced by the government will provide a fillip to growth in the economy. It hopes that demand will revive with the recent reform measures taken by the Government and reduction in the key banking rates, which will lead to lower lending rates and boost infrastructure activities.

In line with prevailing downtrend in metal pack, Tatasteel has been continuing the southward bias from long. It had tested monthly support recently but failed to hold above the same and resumed the overall bias. There’s no sign of reversal on the weekly chart yet indicating bearish bias in full control. On higher side, 330 zone is now a strong hurdle with 275 levels as support zone. HOLD IFCI Ltd - Religare

HOLD IFCI Ltd

Fundamental View:
* IFCI reported a 33% decline in net profit for the quarter ended December 2012, at Rs 76 crore. Total income from operations for the quarter under review declined 5.2% to Rs 638 crore. During 9M FY13, its profit declined by 32.3% to Rs 300.93 crore and total income also declined 6% to Rs 2023.92 crore.
* IFCI's shareholders have given their nod for the company to issue optionally convertible debentures (OCDs) worth Rs 523 crore to the Government and subsequently convert them into equity shares at par.
Outlook:
The company has shown moderated growth from past few quarters. The increase in interest rates has not allowed its growth in top line to be translated into bottom line. The company is looking at increasing its competency through its subsidiaries which have their own ability to raise funds.

Rule (GAAR) implementation by two years to April 1, 2016 an

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Overseas investors have poured in USD 1.4 billion into Indian equities in March, taking the total investment tally to USD 10 billion for the calendar year 2013 so far.

oreign Institutional Investors (FIIs) infused a net amount of USD 1.4 billion (about Rs 7,547 crore) in Indian stock market in March so far taking the total inflows to USD 10 billion (Rs 54,045 crore) in less than three months of 2013.

FIIs had pumped in USD 4.57 billion (Rs 24,440 crore) in February and USD 4.05 billion (Rs 22,000 crore) in January.

Market analysts attributed huge inflows into Indian equities to a slew of measures taken by the government, including the postponement of General Anti Avoidance d partial decontrol in diesel prices.

Additionally, easing of interest by Reserve Bank of India (RBI) and subsequent impact of improved liquidity position have further boosted FIIs inflow.

During March 1-22, FIIs were gross buyers of shares worth Rs 57,303 crore, while they sold equities amounting to Rs 49,756 crore, translating into a net investment of Rs 7,547 crore (USD 1.4 billion), as per Sebi data

Goldman Sachs Group Inc. cut its estimate for iron-ore prices this year on expectations demand will moderate and steel production will slow in China, the world’s largest buyer.

Iron ore may average $139 a metric ton, compared with a previous estimate of $144, analysts Christian Lelong and Jeffrey Currie wrote in a report today. The bank has a neutral outlook on the commodity and prices may be supported at about $140 by the need for high-cost Chinese mine production to balance the market in 2013, the report showed.

Prices have dropped 7.2 percent in 2013 as China’s industrial output had the weakest start to a year since 2009 and concern rose that curbs on construction in the country will reduce demand for the steelmaking material. Iron ore has peaked and will decline over the rest of the year, Morgan Stanley said March 7, joining analysts from Deutsche Bank AG to Credit Suisse Group AG in forecasting lower prices.

“We expect global seaborne iron-ore demand to revert back to its historical growth rate of 2 percent per annum,” Goldman Sachs said. “Steel production growth has slowed in China and we expect it will remain below GDP growth rates in the future.”

Iron ore with 62 percent content delivered to the Chinese port of Tianjin slipped 0.2 percent to $134.40 a dry ton today, according to the Steel Index Ltd. Swaps are trading at $132 a ton for April, $127.50 for the second quarter and $121.25 for the third, according to SSY Futures Ltd., a broker.