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Market Roundup
Volume 1, Issue 25, 7th August 2015

EQUITY Market

Sensex 28236.39

LTP
282.85
393.4
129.3
955.5
3808.70

% Change
11.9
10.3
2.70
16.9
56.55

Scrip
BHEL
COAL India

LTP
266.15
414.7

% Change
-16.3
-16.7

SBI
Bank of Baroda
Asian Paints

281.30
185
898.65

-7.75
-4.40
-17.45

Top Index Losers

Currency
V/S INR

Nifty 8564

24.05

Market News:

Top Index Gainers

Scrip
ONGC
TATA MOTORS
VEDANTA
BPCL
GRASIM

61.74

Closing Price

Change(%)

Dollar

63.81

-0.05

Euro

69.96

0.37

Pound

98.82

0.00

Yen(100)

51.4

0.27
th

Note - Data as of 5 p.m. 7 August 2015

Maruti market value soars; overtakes Japanese parent

company Suzuki; creates history
Has I fosys got its Mojo a k? I fosyss highest revenue
growth in 19 quarters and high dollar guidance for
FY16 lift stock to two year high
RBI amends NBFC takeover norms
Sun pharma merger with Ranbaxy turns sour : Company
considers exiting some business
Oil at multi month lows; hunt for new bottom as
gasoline piles up
La se & Tou o iti ises u hu ied
profit slides

efo

pa e as

Market Roundup

Volume 1, Issue 25, 7th August 2015

EDITORIAL
Hi Guys,
Welcome to the 21st issue of market roundup brought to you by the SIMSREE Finance Forum.
The Chamber of Lok Sabha e a e the Hall of ha e this eek when members of various opposition
parties, including Congress and Aam Aadmi Party boycotted the proceedings. Leaders of these parties
announced that they will boycott proceedings for the week as a protest against the suspension of 25 Congress
MPs. Apart from this, RBI has kept its key rates unchanged in its 3 rd bi-monthly monetary policy review.
Governor Raghuram Rajan remarked that the headline inflation is at elevated levels and banks still ha e t
passed on the full benefits of the previous 75 basis points rate cut. Raghuram Rajan used strong words against
banks for holding on to rates. Dr. Rajan has also said that RBI and the government have reached a consensus
on the structure and composition of Monetary Policy Committee. He said that there is no difference of
opinion between the two parties regarding the role that will be played by the governor in the MPC.
Rural Development Minister Chaudhary Birender Singh launched SAMANVAY, a compilation of all schemes
of both Central and State governments for Gram Panchayats. The purpose of bringing out SAMANVAY is to
help MPs utilize relevant schemes in the planning and execution of Saansad Adarsh Gram Yojana. More than
1800 state schemes from various states have been integrated into SAMANVAY. In addition to this, the
Government is in the process of developing a Uniform Code for Pharmaceutical Marketing Practices in order
to reduce unethical practices. The uniform code which is under implementation till this month-end is only on
a voluntary basis initially.
Moreover, in order to regulate commodity trading, SEBI has warned small investors against coming for
quick gains through speculation in the a ket, hi h is isk a d e uires technical knowledge. Small
investors were warned not to fall prey to people saying small margins can bring in lot of money. SEBI asserted
that it is prepared to begin regulating commodities trading and all necessary safeguards would be put in place
to keep the scamsters and manipulators at bay.
On a sadder note, one civilian was killed in the ceasefire violation by Pakistan along the international
border in Jammu district this week. Pakistani forces started heavy firing and mortar shelling on Indian
positions and civilian areas in Kanachak and Pargwal around 6 on tuesday morning. Later, Pakistani forces also
opened fronts in RS Pura Sector along the international border.
Lastly, US President Barack Obama has shown confidence of having a successful Paris Summit on climate
change later this year, with the White House hoping countries like China and India will be fully cooperative for
the "most ambitious international climate change in human history". Mr. Obama has announced an ambitious
clean energy target to curb pollution from coal-fired power plants yesterday.
- SIMSREE Finance Forum Team

Market Roundup

Volume 1, Issue 25, 7th August 2015

Maruti market value soars; overtakes Japanese parent company Suzuki; creates history
- PRATIK NAIK
MUMBAI: The nation's no. 1 automaker Maruti
Suzuki has achieved a feat no other Indian
company with a foreign parent has ever done. It
has outgrown its parent company Suzuki Motor in
market value. It has recently also ousted Tata
Motors as India's most valuable automotive
company.
It s sto k i eased % i the past ea , s elli g
its market capitalisation to $19.73 billion (Rs 1.26
lakh crore) based on 21st Jul s losi g sto k p i e
of Rs 4,158.80 on the Bombay Stock Exchange;
while its Japanese parent Suzuki is valued at $19
billion.
Maruti's stock rally has been mostly due to its
stellar operational and financial performance and
rosy outlook in a sluggish automobile market. On
the other hand, Suzuki had a bumpy ride in recent
years with sales weakening in all major markets
except Asia.
Barring Maruti, no other constituent of the CNX
MNC - an index that captures the stock
performance of top MNC subsidiaries - has a
market cap close to that of the parent.
Historically, for Maruti, the parent held an upper
hand. Data compiled by ETIG show on average,
since the listing of the Indian unit in 2003, Suzuki's
market cap had been $5.6 billion more than
Maruti's. Analysts and investors remain bullish on
the Indian company that the lead Maruti has taken
over the parent could widen.

Analysts have been consistently upgrading their

earnings estimate on Maruti on multiple triggers,
such as falling discounts which adds to margins,
higher efficiency as more vehicles roll out of its
factories, volume driven growth due to new
launches and an improving economy.
According to estimates compiled by Bloomberg,
Maruti's earnings per share is expected to more
than double to Rs 278 in fiscal 2018 from Rs 126 in
fiscal 2015. Suzuki reported a 4% decline in
operating profit for the fourth quarter of fiscal
2015 and its outlook for a 6% increase in the
operating profit estimate for fiscal 2016 was below
consensus estimate.
Analysts don't expect any major improvement in its
stock price in the near future. According to CLSA
analyst Christopher Richter, who says, "Our historic
valuation analysis suggests that all the good news
is already in Suzuki's share price and relative to
peers, the stock looks quite expensive."

Market Roundup

Volume 1, Issue 25, 7th August 2015

Our view:
The parent company Suzuki holds a 56% stake in Maruti. As disclosed in Suzuki's FY-14 annual report, on a
consolidated basis, 40% of its sales volume comes from India. In its vision 2020 document, the Japanese
company expected the proportion of cars sold in India to reach 60% in 2020. The widening disparity between
the performance at Suzuki and Maruti; implies that the Indian unit plays an important role in achieving the
target. Suzuki has taken several strategic steps which connotes the growing prominence of the Indian
subsidiary.
Being the market leader, Suzuki also invested in developing a diesel engine to cater to the demand Maruti was
facing in India. More importantly, shifting from its policy of collaborative development, Suzuki's design team
has started developing products targeted mainly at the Indian buyer. Utility vehicle Ertiga was the first
product designed primarily for the Indian market. Maruti has been given a free hand to develop business in
Africa and Latin America by using the existing dealer network of Suzuki. This is with a view that in the near
future, arkets outside Asia ould e i stru e tal to Marutis arket apitalisatio .

Market Roundup

Volume 1, Issue 25, 7th August 2015

Has I fosys got its Mojo a k? I fosyss highest e e ue g o th i 19 ua te s a d high dolla guida e
for FY16 lift stock to two year high
- DIVYA NADAR

Bengaluru: Infosys Ltd reported strong first-quarter

results on the back of a pickup in business across
sectors, particularly from its US clients, signalling
that hief e e uti e offi e Vishal ikka s effo ts to
turn around the company may be beginning to
ea f uit. The st o g esults p o pted I dia s No.
2 software services exporter to boost its sales
growth forecast for the financial year and lifted its
stock to the highest level in over two years.
Under Sikka, the 34-year-old company has been
embracing new-generation technologies such as
automation and artificial intelligence in a bid to
regain its past glory and once again become the
ell ethe of I dia s $
illio i fo atio
technology (IT) industry. Since taking the helm in
August 2014, the first non-founder CEO of Infosys
has been urging its employees to adopt the usercentric approach of problem-solving called design
thinking. And a team of senior executives, led by
ikka hi self, has ee o e seei g
of I fos s s
largest clients.
The changes seem to be helping Infosys get more
business from existing clients as well as win new
contracts. For instance, for the first time in five
years, the 10 biggest clients of Infosys outsourced
o e o k to the o pa . We a e still ea l i
our journey towards the next-generation services
o pa , ikka said o Tuesda . Ho e e , this
quarter gives us something to smile about and (be)
o fide t of ou futu e.
The o pa s sha es losed up
. % to
Rs.1,112.65 on the BSE on a day the benchmark
Sensex fell 0.84% to 28,182.14 points. Infosys

retained its constant currency revenue growth

guidance at 10-12% for the current financial year
but raised its growth guidance in US dollar terms to
7.2-9.2% from 6.2-8.2%, as it believes it will benefit
from cross-currency movements.
I the fi st ua te e ded Ju e, I fos s e e ue i
rupee terms rose 12.4% to Rs.14,354 crore from
the year-ago period. Its dollar revenue beat
expectations by rising 5.7% year-on-year and 4.5%
se ue tiall to $ .
illio . The fi s %
sequential growth in revenue in rupee terms during
the first quarter was the highest in 15 quarters
even as its volume growth at 5.4% quarter-onquarter was the highest in 19 quarters. Net profit
increased 5% from a year ago to Rs.3,030 crore in
the three months ended June, matching the
median of estimates in a Bloomberg survey of
analysts. In dollar terms, net profit declined 4.5%
sequentially to $476 million.
The survey had forecast sales of Rs.14,070 crore.
I fos s s la ge i al Tata Co sulta
e i es Ltd
reported a 3.5% sequential growth in revenue in US
dollar terms earlier this month, the slowest start to
a fiscal year for the company in four years.
I fos s s g o th as led a . % i p o e e t i
the US, which accounts for more than 60% of the
o pa s total e e ue. e e ue g o th i
Europe, which brings in about one-fourth of
revenue, improved 1.2% in the April-June period.
The banking, financial services and insurance
se to , hi h a ou ts fo
% of the o pa s
revenue, grew 2.8% over the three-month period,
even as business from manufacturing clients saw a

Market Roundup
. % i p o e e t. The igge o t i uto is
ope atio al e elle e, ikka said. I
e e
quarter, the contribution of new initiatives should
get bigger, and that will certainly help us get to that
goal (of becoming a $20 billion company
.
The strong results prompted some analysts to
ha ge thei outlook o the o pa . I fos s s
strong first-quarter revenue washes away the blues
of its dismal fourth-quarter drop and sets it up for a
st o g fis al ea
, A ku ud a, a al st at
brokerage CLSA, said in a note to clients.
La gest usto e ea ele atio is a sig ifi a t
positive and indicates Infosys regaining mindshare
a d
a ket sha e, ud a added. till, so e
worried if Infosys was sacrificing its profitability to
generate additio al usi ess. To e su e, I fos s s
profitability took a hit in the April-June period as
operating margins declined by 115 basis points
over the year-ago period to 24.9%. A basis point is
one-hundredth of a percentage point.
A su essful tu around can happen only if the
company can either increase its market share or
improve its profitability. One cannot make a
turnaround without giving away one. Infosys seems
to be taking the route of increasing topline even as
the margins come under pressure, said a
Singapore-based analyst working at a foreign
brokerage who did not wish to be identified.
Infosys and other home-grown IT firms also have a
few challenges. Business from energy and telecom
clients continues to be a cause of concern. For
Infosys, insurance was another business that
lagged othe i dust u its. We eite ate ou ie
that I fos s s oad to e o e
ill e a u p o e.
Infosys has not only the challenge to put its own
house in order but has to deal with the secular and
highly disruptive journey into the As-a-Service

Volume 1, Issue 25, 7th August 2015

E o o , said Tho as eu e , a agi g di e to
of IT outsourcing research at HfS Research.
Fi a ial a kets take a sho t-term view, but
Vishal and his team have to transition the company
to be fit for this disruptive journeythey will only
achieve that with a long-term strategic plan. The
vision Infosys has announced is strategically sound,
but the crux lies in execution and change
a age e t.
Sikka expects his company to post better numbers
in coming months, unless some macroeconomic
fa to s spoil the pa t . The i itiati es e ha e
started from the beginning of my journey here
have been producing results in small but
measurable ways in the eleven months. The result
is combination of realignment of organization we
brought in and deep innovative strategic initiatives.
But there is clearly a sense that strategic initiatives
a e sta ti g to pa off a d it should o ti ue,
Sikka said.
I fos s s att itio ate sa a a gi al upti k to
19.2% from 18.9% at the end of March even as the
company added 79 clients in the three-month
period to take the total number of active clients to
987

Market Roundup

Volume 1, Issue 25, 7th August 2015

Our View:
Since the entry of Vishal Sikka as the CEO of Infosys, there have been tremendous changes in the strategic
planning of the company. The Infosys 3.0 strategy was bid adieu and new tactics were drawn out. While the
Q1 FY16 remained favorable for IT sector, Infosys definitely was the top gainer. It differentiated itself from its
top competitors, especially TCS, in terms of its approach towards clients, markets and employee retention. The
strategies of investing in disruptive as well as innovative solutions such as automation; venturing in newer
avenues (e.g. the US based Dreamworks spin-off); linking payments to milestones achieved and creating a
conducive environment for employees paid off handsomely well. Infosys struck the iron while it was hot by
securing major businesses in US, a region which is speculated to bring huge prospects for Indian IT sector in the
coming quarters.
While the current scheme of things are falling in place for Infosys, it can still capitalize on the huge untapped
market in India. The volatility of global markets, ever changing needs and reduction in IT spending by the
global clients make it important for IT firms to secure a strong grip in the domestic market. Infosys reaps
arou d 3% of its re e ue fro I dia hi h is less tha t i e of its i
ediate o petitor, TCS 7%. E ergi g
markets will hold the key to success in future. Hence, as Infosys basks in the glory of beating TCS in the
quarterly revenue growth, it should keep innovating and look for new opportunities to stay ahead.

Market Roundup

Volume 1, Issue 25, 7th August 2015

RBI amends NBFC takeover norms

-SHRUTI BIRARI

The Reserve Bank of India (RBI) amended the

norms for acquisition or transfer of ownership for
non-banking finance companies (NBFCs), the
central bank said in a notification.
It said that any takeover or acquisition of control
of an NBFC, which may or may not change
management, would require prior written
approval from RBI. Prior nod would also be
needed in cases where there is acquisition or
transfer of more than 26% shareholding in the
NBFC s paid-up equity capital. In a notification on
26 May, 2014, RBI had asked NBFCs to get written
permission in case of acquisition or transfer of
more than 10% shareholding in the NBFC.
P io app o al ould, ho e e , ot e e ui ed i
case of any shareholding going beyond 26% due to
buyback of shares/ reduction in capital where it
has app o al of a o pete t ou t, the latest BI
notification said.

In case of any change in management where more

than 30% of the directors on the board are
changed, the NBFC would be required to get
written approval from the RBI beforehand.
However, in case where directors get re-elected on
retirement by rotation, such approvals will not be
required, RBI said.
Moreover, any change in management would need
to involve a public notice before at least 30 days of
any such announcement, which shall be printed in
at least one leading national and one leading local
vernacular newspaper. Such a notice will be given
out by the NBFC as well as the other party
involved, after receiving appropriate RBI approvals.
This notice would consist of the reason for such a
change in management and specifics of both
parties

Our View:
In the past year, the Central Bank has been implementing measures in anticipation of consolidation in the BFSI
space. Since amendment of the NBFC norms in 2014, there have been continual efforts to organize and
streamline the NBFC sector further. Since NBFCs like Mannapuram Finance and Muthoot Finance have been
responsible for bringing several borrowers from the unorganized sector into the NBFC space, the RBI is
implementing measures to ensure that these borrowers are protected by regulations. Additionally, the
Microfinance space has also seen a lot of new entrants, most of whom, will have their consumers from
unorganized and economically backward sectors. The NBFC norms ensure that these companies have the
adequate capital to bear defaults and also that consolidation takes place within the regulatory framework to
protect the interests of the clients.

Market Roundup

Volume 1, Issue 25, 7th August 2015

Sun pharma merger with Ranbaxy turns sour : Company considers exiting some business
-ANKITA NARNAWARE

MUMBAI: Faced with disappointing revenue and

profit going forward, Sun Pharma is mulling options
of exiting Ranbaxy's "low-margin" overseas
geographies mainly in Europe, and is also
evaluating discontinuing the anti-retrovirals (ARV)
business and API (active pharmaceutical
ingredients) operations as part of its overall efforts
to "discontinue certain non-strategic businesses"
to fast-track growth. All this will not happen at one
go but will "take shape" over a period of time, two
sources close to the development told TOI.
Exiting the low-margin businesses may not result in
a huge cash flow, but will improve the profitability
of the company going forward, analysts told TOI.
The API business is small, valued around $40
million, while the ARV tender business centred
around Africa may only continue till the obligation
is met, analysts said. Most of these businesses will
be divested as closing them down incurs expenses.
"Certain loss-making geographies like France have
been a damper on Ranbaxy's sales for some years,
while others like Australia estimated at $35 million
are not sustainable," two sources close to the
development said, adding that these markets could
be the first ones which the company could exit.
Ranbaxy's API business and ARV tender business
for Africa would be part of this exercise. While no
break-up is available for the specific markets in
which Ranbaxy had a presence in Europe, it is
estimated to be around $150-200 million, analysts
said.

India's largest drugmaker warned on July 20, weeks

ahead of its first quarterly results, that its revenues
and profits will be adversely impacted after its
merger with Ranbaxy, which closed in March this
year. When contacted, a Sun Pharma spokesperson
said the information is untrue and the company did
not speak about "any divestment of businesses".
The company's MD, Dilip Shanghvi, said in a
conference call to analysts on July 20 that the
company may discontinue businesses, which could
be low-margin products and do not make longterm strategic sense. "For Sun Pharma, the focus
has been the US and rest of the world markets,
while Ranbaxy has a huge presence across the
world. The company will divest unprofitable
geographies in Europe, as well as the API business
which is not a priority for the new owner," said
Sarabjit Nangra, VP, research-pharma,Angel
Broking.
To achieve long term synergy , it will look at selling
low-margin, non-strategic businesses such as the
active pharmaceutical ingredients division. On
Wednesday, Sun closed at 830 on BSE, up 1.05%.

Market Roundup

Volume 1, Issue 25, 7th August 2015

Our views:
As was thought to be one of the greatest merger of the pharma sector, Sun pharma and Ranbaxy has turned
out to be a bad decision from Sun pharma point of view. The company is reconsidering to actually exiting few
parts of the business entered into with Ran a
hi h are loss aki g e tures. The Ra a s API usi ess
with two plants at Toansa (Punjab) and Dewas (MP) is small now and was impacted after the USFDA import
ban. It may also exit certain brands in Ranbaxy's portfolio which are not adding to profits, she said. "A
thorough assessment has been made of current overlaps across the organisation," a Sun spokesperson said.
"While all attempts have been made to ensure that most employees are accommodated in various positions,
there will be a few who we need to help in the process of actually transitioning out of the organisation." Sun
Pharmaceutical Industries is cutting staff again as it digests the $3.2-billion acquisition of Ranbaxy
Laboratories. Facing the axe this time are research and development staff, a move that comes a month after
about 150 senior executives were asked to leave. Close to 15 employees from the R&D department are to exit
as Sun integrates a combined staff base that's 30,000 strong. Among the erstwhile Ranbaxy executives who
left in the earlier round were the head of India operations, the chief financial officer and the vice-president of
marketing among others. Sun said it's trying to handle the transition as sensitively as possible.

Volume 1, Issue 25, 7th August 2015

Market Roundup
Oil at multi month lows; hunt for new bottom as gasoline piles up

-ROHIN JACOB

NEW YORK: Oil set multi-month lows on Thursday

as investors and traders sought clues about the
market's next bottom after a large drop in US
crude inventories failed to boost prices.
A bigger-than-expected build in US gasoline
stockpiles last week proved more important to
US crude was down 90 cents, or almost 2 percent,
at $44.25 after touching a 4-1/2 month bottom at
$44.20.
"We need to see a capitulation trade, and we have
not gotten that yet," said analyst Chris Jarvis of
Caprock Risk Management in Frederick, Maryland.
"We believe that will come once oil breaks below
$40."
Crude futures are a few dollars away from breaking
2015 lows, which are above $40. Brent's bottom
for the year is $45.19 while US crude has plumbed
$42.03.
"Prices are likely to consolidate or weaken
further," said Frankfurt-based Commerzbank
analyst Carsten Fritsch. "The perception is that
oversupply will be there for much longer."
Goldman Sachs analysts said US shale drillers had
dramatically reduced the time between
committing capital and producing oil, so low prices
must be sustained to curtail investments and allow
supply-demand rebalancing to occur.

investors than crude storage numbers that came in

three times below forecast on Wednesday.
Brent, the global oil benchmark, was down 60
cents, or 1.3 percent, at $48.99 a barrel by 11:42
a.m EDT (1533 GMT) after setting a six-month low
at $48.88.
US crude inventories fell by 4.4 million barrels last
week, versus forecasts for a 1.5 million drop.
But gasoline stocks overshot, to 811,000 barrels, or
300,000 above expectations. The build came as US
refiners processed gasoline and distillates, which
include diesel, at record high rates last week,
taking advantage of strong refining margins.
"If they continue to run at these levels, then we
will see massive builds in distillates and gasoline
stocks when the peak demand season is over for
gasoline," Saxo Bank senior commodity strategist
Ole Hansen said.
Refiners could cut runs if margins collapse and as
they head into seasonal maintenance, leading to
fresh builds in crude inventories.
In global crude, September production across the
North Sea's Brent, Forties, Oseberg and Ekofisk
grades is expected to be at around 1 million barrels
per day, the highest for the year, loading data
shows.

Market Roundup

Volume 1, Issue 25, 7th August 2015

Our View:
The price of crude oil is decreasing due to oversupply in the market. OPEC players like Iran, Iraq and Saudi
Arabia are all gradually increasing their respective supplies. Others developing members like Angola will
sustain their oil exports as their economies are dependent on oil. In the case of Iraq, the increase in supply has
resulted from the execution of various oil field expansion projects that the Government had signed with major
International Oil companies as part of its long term project to increase oil production significantly. Even the
export infrastructure is being developed in order to avoid wastage of the potential to produce oil. In Iran, the
recent removal of export sanctions that were earlier imposed on it by EU and USA is leading to a gradual
increase in supply from the country. The removal of sanctions has allowed the country to bring back its
production capacity that had gone offline in the presence of the sanctions and the consequent absence of
demand. However, around 25-30% of its offline capacity is expected to have been lost permanently. Both these
poor countries are very unlikely to reduce exports in order to stabilize crude oil prices. Apart from this, Saudi
Arabia, the oil mammoth, is a country that has a spare capacity of 2.5 million barrels per day which it is
currently using to some extent in order to prevent western nations like US and Canada to eat i to OPECs
market share. In the near future, even Russia will increase exports of crude oil in a desperate attempt to revive
its economy. Thus, the oil prices are expected to remain under pressure.

Volume 1, Issue 25, 7th August 2015

Market Roundup
La se & Tou o

iti ises u hu ied

efo

pa e as p ofit slides
-JEET JUNEJA

NEW DELHI: With its first-quarter profits dipping by

a sharp 37 per cent, industrial giant Larsen and
Toubro today blamed "unhurried pace of reforms"
and the global uncertainties for a subdued
investment climate in the country.
"The domestic infrastructure sector awaits the
translation of various policy and budgetary
initiatives into a definitive capital expenditure
programme.
"While visibility of outlay by public
sector/government undertakings has improved,
private sector investment in the industrial sector is
constrained by weak demand, low commodity
prices and under-utilisation of existing capacities,"
L&T said.
Hoping for favourable macroeconomic conditions
going ahead, L&T said the latest quarter, ended
June 30, witnessed improving macroeconomic
trends and favourable conditions for containment
of fiscal deficit and monetary policy management
are expected to enthuse an investment friendly
environment.
"The investment climate, however, remained
subdued in the backdrop of global uncertainties
and unhurried pace of reforms in India," L&T said,
while announcing its first quarter results.
Voices are emerging from various quarters,
including from the corporates and the analysts,
that call for an urgent need to quicken the pace of
reforms.

Global giant Moody's also said yesterday that the

delay in key reforms is denting business confidence
and the foreign investors are wary of investing in
India.
While pegging India's true growth potential at near
10 per cent, Moody's also warned that "GDP
growth is not likely to rise above 7.5 per cent if the
government continues to over-promise and not
deliver".
"The business environment stays challenging in the
short term while the prospects in urban infra,
transportation infra, power transmission, water,
renewable energy and defence manufacturing
remain promising in the medium term," L&T said.
The company said it hopes to benefit from the
growth opportunities as they emerge.
L&T reported a steep fall of 37.3 per cent in
consolidated net profit to Rs 606.19 crore for the
first quarter of fiscal 2015-16 on slower execution
of some projects and higher expenses.
L&T is an Indian conglomerate, engaged in
technology, engineering, construction,
manufacturing and financial services with over USD
15 billion in annual revenue. It operates in 30
countries.
The company's stock closed at Rs 1,789.55, up 0.75
per cent, on the BSE.

Market Roundup

Volume 1, Issue 25, 7th August 2015

Our View:
Companies like L&T have looked to the BJP Government to give the economy the much needed push by
clearing stalled projects in order to fasten the investment cycle; the Government decided to splurge money on
public infrastructure this year in the hope that it would be complemented by private funds to kick start the
economy. However, private investment has been constrained by spare capacity and weak demand in the past
few months. According to Mood s A al ti s, there are sig s that thi gs are t er good ith a ufa turi g,
the industry that is expected to increase the size of our economy drastically. Moreo er, a ufa turi g is t the
only industry that is in trouble. The Pur hasi g Ma agers I dices - economic indicators derived from monthly
surveys of private sector companies have dropped for both manufacturing and service industries. The major
reaso for this drop is the go er e ts i a ilit to ri g a out ke refor s. On the whole, it would t e
inappropriate to say that the economy will benefit by further cuts in the benchmark interest rate by RBI. The
consequent lower costs for borrowing could help the private sector, which, at present, is unable to clear stalled
projects.

Thats all Guys. Tha k you