SumanSpeaks: The Information Super Highway

Govrnment privatizing railways by stealth, claims Congress Photo : Your Article Library NEW DELHI, Dec 30, 2014: Congress has termed Prime Minister Narendra Modi's assertion that railways would not be privatized as bluff, saying that it is already headed for it in view of the Union Cabinet's green signal to 100% FDI in railways. "The government is privatizing Indian Railways by stealth, by no transparency. Without calling it privatization, it is privatizing every aspect of the railways. Only the driver that runs the engine will remain a government servant. But rest is all privatized," said Congress spokesman Abhishek Manu Singhvi. Singhvi termed the move as yet another "somersault" by BJP, arguing that Modi government's actions at present are not in sync with the promises its leaders made on the campaign trail in the run-up to the general elections and soon after taking over at Centre. Congress leader said Modi's strong pitch for ...

Do You Know? Insecticides (India) Ltd was recommended around Rs.280-282 some months back in this blog. After that it was recommended on August 28, 2014 by SBICap Securities for a target of Rs.898. The scrip then made a 52-week high of Rs.931.80 on 10/12/2014. Today it closed at Rs.878.15.

Autodesk banking on India's booming infrastructure potential to boost revenue BENGALURU, 30 Dec, 2014: 3D design, engineering and entertainment software company Autodesk is banking on India's booming infrastructure potential to boost its revenue and presence in the country over the next few years. "Our software can design at city scale and since the new government aims to build huge amount of infrastructure, it plays very well to our strengths," chief executive Carl Bass told ET at Autodesk University, the annual conference for the softmaker, held in Las Vegas. In the 2014 budget, Finance Minister Arun Jaitley said the government will provide funds for financing long-term infrastructure projects, boosting confidence in the sector. Union minister Nitin Gadkari had earlier said that he targets developing 25 kilometres of roads per day. The managing director for Autodesk India, Pradeep Nair, said "the new government is focussed on execution and showing tan...

PMO steps in to push stalled infrastructure projects NEW DELHI, Dec 30, 2014: : In its latest attempt to spur investment and get stalled projects moving, the Prime Minister's Office has asked key infrastructure ministries to put together a list of long-pending projects that have failed to take off due to state government-related hurdles. Sources said Nripendra Misra, principal secretary to PM Narendra Modi, has written to several secretaries, asking them to send a list by next Monday. "It has been observed that there are a large number of projects, both of the central government, state governments... are held up due to ineffective handling of issues. The factors also include policies of the state governments, lack of prioritization at the state level or inadequate follow up from the Central level," Misra is learnt to have written to secretaries last week. Modi's chief of staff suggested that ministries take up the issues with the state governments and so...

Do you know? In cities like Mumbai, the construction cost comes to only around 20-30 per cent of the project cost and the land cost goes up to 60-70 per cent. 

Govt to not extend tax breaks to automakers beyond Dec 31 [ Editor : This is an excellent move by the government of India. The then UPA government  first granted tax breaks to auto makers in February to help revive sluggish car sales and later extended until the end of the year.  The question is: how  can poor tax payers money be used to give comfort to the rich and high-fliers for months and months? Therefore, the current decision by the government of India, was the need of the hour and should be appreciated] New Delhi  December 30, 2014: The government will not extend tax breaks to automakers beyond Dec. 31, a senior government official told Reuters, as the government looks to shore up its stretched finances before the end of the financial year despite the potential impact on car sales. The decision comes at a time when weak tax receipts in a sluggish economy are making it difficult for India to meet its ambitious fiscal deficit target of 4.1% of gross ...

WINNING STROKES: THINK DIFFERENT The Nifty which opened at 8260.30 traded range, throughout the day, but managed to close in the Green at, 8248.25, slightly above yesterdays' close of 8246.30. Nifty seems to have struck between the ranges: 8150 and 8350. This range bound movement is expected to continue unless it breaks out in either direction. However, as long as 8200 holds, the BULLS have nothing much to fear, as the activity would be concentrated on the broader market. A Buy call on Nifty_Futures around 8302 was today given to the Premium Group members with a SL: 8285; Targets: 8330 / 8355 / 8390. Today, HDIL went in for another round of profit booking as it closed almost flat at Rs.67.70. The company’s debt remained constant on sequential basis in Q2FY15. Sarang Wadhawan, Vice Chairman & MD, HDIL said last month that, HDIL’s monetisation process is underway to pare debt and the company aims to reduce debt by 15 percent by FY15-end....

Indian Government Amends Land Acquisition Bill [ Editor : This is positive for the whole of Real Estate Sector and some of the stocks like NBCC (Rs.810 up 3.55 %) , Ansal Housing Ltd (Rs.28.45, up 2.15 %) , Ahluwalia Contract Ltd (Rs.218.90, up 2.60 %) , etc are all trading in the green]  Dec 30, 2014: On Monday, for the third time in recent weeks, India’s cabinet used an unusual maneuver  – issuing an “executive order” — to push forward with its economic overhaul agenda. The executive order, or ordinance, tries make it easier for industrial projects to acquire land. The ordinance chips away at a major obstacle to industrial investment. Several proposed economic overhauls from India’s new government had been delayed by opposition protests in Parliament, which ended its session recently. Ordinances are generally used to implement laws only in case of emergencies when Parliament isn’t in session. For an ordinance to remain law, it must eventually be approved by P...

Government Renews 12 more Mining Leases Photo : Digital Goa Panaji, Dec 29, 2014: The state government has received 125 crore in form of stamp duty from 12 more mining companies for the renewal of mining leases. Last week directorate of mines and geology (DMG) had issued order to 12 mining companies to pay stamp duty for the renewal of their mining leases. With 12 more mining leases paying stamp duty, the total number of mining leases renewal will go up to 39 mining leases. Out of 12 mining leases who have paid stamp duty, seven belong to Chowgule and Company Pvt Ltd, four belong to V M Salgaocar and Brothers Pvt Ltd and one Sesa Goa. DMG director Prasanna Acharya told TOI that out of 12 mining leases, DMG has issued lease renewal orders for seven mining leases and remaining leases renewal orders will be issued next week. The state government has decided to approve around 45 mining leases by January 2015, and the cap on iron ore extraction from each mine will al...

Bonds rally on speculation of off-cycle RBI's rate cut  Photo : The Hindu MUMBAI, 29 Dec, 2014: Bonds rallied on Monday after news agency NewsRise Financial, citing an unidentified finance ministry official, reported the government was pushing for a cut in interest rates even before the central bank's next policy review in early February.  NewsRise quoted the official as saying the government expected "an out-of-turn rate cut" given "inflation would continue to trend down." The Reserve Bank of India is next scheduled to decide on monetary policy on Feb. 3.  The benchmark 10-year bond yield fell 5 basis points to 7.93 percent on the news. It had hit a near 1-1/2 year low of 7.82 percent in mid-December.  The clamour for rate cuts has grown on the back of sharply easing inflation. Data earlier this month showed consumer inflation in November falling to the lowest since the series was introduced in 2012 because of easing food and fuel prices...

Cabinet approves ordinance for Land Acquisition Act [ Editor : This is one of the best decisions taken by the NDA Government and should get appreciation from all. The government should prioritize solving, the key issues, which is affecting the infrastructure space. I was surprised when the Prime Minister of India, instead of speaking of bringing in "Sweeping" changes (reforms) in the infrastructure space, was actually asking all to "Sweep" Indian roads (infrastructure?)---Huh!!  Anyway , a fter a hiatus of about 120 years, the earlier UPA Government brought in a new Act in Real Estate sector: “The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013” (LARR).  This Act has a lot of changes, improvements & additions over the Land Acquisition Act of 1894. And as the name suggests, LARR primarily caters to the issues of rehabilitation & resettlement on top of land acquisition norms ] Dec 29, 2014: Ne...

WINNING STROKES: THINK DIFFERENT Today HDIL moved to Rs.71.45 in the BSE before closing above the break-out point. The scrip rose today due to twin reasons: (i)  the Bombay High Court staying a lower court order asking police to conduct a probe against the company with regard to alleged irregularities in a slum rehabilitation authority (SRA) project and (ii) anticipation of an early rate cut by the RBI in view of the fall in the CRUDE OIL prices. T he company’s current debt on a consolidated basis stands at Rs.3,400 crore, which is being serviced regularly.  Earlier in an interview to a business channel, S arang Wadhawan, vice chairman & managing director, HDIL said that the management hopes  to cut down the debt of the company by 25 percent to Rs.2300 crore by March next year. He further added that Maharashtra government's move to increase FSI on affordable housing is a big positive for the company.  HDIL is one of the largest land bank owners in th...

Jaiprakash Associates Ltd: Buy CMP: Rs.26 The market cap of the company is only Rs.6,324.39 Cr against H1FY15 earning of Rs.5778.47 Cr, showing that at the CMP, the shares are attractively priced. The book value of the shares of the company is Rs.56.48.  Meanwhile, Jaiprakash Associates completed its divestment programme aimed at cutting debt with the sale of two cement plants in Madhya Pradesh to UltraTech Cement for Rs.5,400 crore. The company has in total divested assets worth over Rs.20,000 crore. In a statement, Manoj Gaur, executive chairman, Jaiprakash Associates Ltd, said: “With this disinvestment, Jaiprakash Associates’ major disinvestment plans get rested and the focus will now shift to innovative operational efficiencies to match with the best in class, coinciding with the imminent revival of the Indian economy. In September this year, its sister company Jaiprakash Power Ventures Ltd (JVPL) sold two hydroelectric power plants to JSW Energy for Rs.9...

Mines mired in controversy are the most attractive Photo : NDTV Profit New Delhi  December 29, 2014: In the coming e-auctions of cancelled but operational coal blocks, the ones with most controversy are likely to witness the stiffest fight from bidders. From the seven operational blocks allocated to the power sector, Gare Palma-IV/2 & IV/3 and Talabira-1 stand out as the most attractive. Gare Palma in Chhattisgarh has the largest amount of reserves; Talabira, in Odisha, boasts of ready infrastructure and close proximity to evacuation facilities. However, Gare Palma was earlier owned by Jindal Steel & Power and Talabira was with Hindalco. Both companies are being probed for irregularities in award of blocks. "Legal cases against the promoters notwithstanding, these two blocks are the best of all. We would see new players with mining expertise contesting hard with the original owners, who'd make the most of the second chance to get their lost mines ba...

Domestic steel industry is not getting adequate iron ore to produce steel: Seshagiri Rao, JSW Steel Another Bollywood "Dumbo" [ Editor : The government of India should give special focus on the mining and construction sectors, which are the backbones of our economy, but are in an utter mess. It seems the NDA at the moment is more interested in lucrative defense deals. Now they are hell bent to pass the insurance bill, for reasons best known to them. If even after forming a stable government at the centre, the NDA fails to push the Indian GDP up, then God help them. Prime Minister, Narendra Modi talks more than what he is actually capable of doing. He has already successfully diverted the attention of the general public from the key issues, by bringing in "Swachch Bharat" campaign. The point is that when there is no clean water to drink, even in the slums of Mumbai (Bombay), from where will people get water to clean their premises too often? Therefore, the fo...

Fires Spread to Five Crude Tanks at Libya’s Oil Terminal Black smoke billows out of a storage oil tank in the port of Es Sider in Ras Lanuf December 25, 2014. Photo : Reuters Dec 28, 2014: Libyan storage tanks capable of storing 6.2 million barrels of oil, or four times the country’s daily oil production capacity, are at risk of catching fire with southerly winds threatening to spread the blaze. Five tanks are on fire at the Es Sider port, Libya’s largest oil terminal, Ali al-Hasy, a spokesman for the Petroleum Facilities Guard, said by phone. The wind is strong enough that the blazes may spread, he said. Es Sider tanks have capacity to hold 6.2 million barrels, according to Mohamed Elharari, a spokesman for Libya’s National Oil Co. “It is a disaster threatening the lives of thousands of people,” Libya’s Ministry of Oil & Gas said on its website. “The fire smoke covers the city’s residential area in Ras Lanuf.” International assistance is being sought because the fi...

US Federal Reserve edges closer to first interest rate rise since 2008 [ Editor : Dr. Raghuram Rajan's unwavering focus to keep inflation firmly bottled up had already evoked unusually caustic comments from politicians, who hit out at his hawkish stance, reflecting growing differences between Parliamentarians and the Central Bank. However,  his talk of "Medium-Term-Inflation-Targeting", may be partially  hinged on this issue as well. The INR, now at Rs.63.56 is precariously placed against the US. There are apprehensions that INR could slide further if the US Federal Reserve decides to raise its interest rate in August, 2015. Higher yields could prompt foreign funds to move closer home to the US; the dollar outgo hurting the rupee, unless rates here are high enough for foreign funds, and match the returns they could get in the US. A weak rupee will fan inflation by raising prices of imported goods including oil, gadgets and mobile phones. The Federal Reserve moved almo...

Reserve Bank of India targeting inflation over medium term: Raghuram Rajan  [ Editor : It is understood that no country in the world targets short term inflation trajectory. But the moot point is: with the threats of global economy slowing down, is our learned RBI governor, visualizing the apparition of a "Dead Inflation-Monster", hitting India in the medium term? It is true that RBI's work is inflation targeting but then what about maintaining, the stability of the INR Vs USD ? With Indian consumption story going in full blood, there is need for sincere efforts to boost exports, instead of trying to balance, imports through the sale of high-coupon bonds. This has unfortunately become the RBI's strategy, since the last few years and Dr.Rajan is bereft of any innovation here. With Interest Rate at its peak, how can Indian Exports become competitive in the international domain? Moreover, the NDA government cannot go on giving export incentives every now and then,...

Sudar Industries Ltd: Buy CMP: Rs.37.95 Introduction :  Sudar Industries Ltd (SIL), formerly known as Sudar Garments, is a Raigad, Maharashtra, based (i) integrated garments producer with the capability to design and manufacture ready-made apparel and (ii)  manufacturer of high-end fine chemicals servicing the  pharmaceutical and agro-chemical industries.  The company's capabilities include, in-house inspection of garments and accessories, cutting, body stitching, button hole, buttoning, washing, ironing, finishing and final packing. SIL is present in the fashion  industry with the latest fashions In 2012, Sudar Industries extended to the manufacture of pharmaceutical intermediaries and agro-chemicals following the acquisition of a chemical unit in Vadodara (Gujarat, India). The company specializes in  the manufacture of shirts, trousers and other apparel for men, women and children. It markets apparels, under its own brand "Glory to Glory". ...