We met the CEO of the recently merged Gujarat Gas (GGL is an amalgamation of erstwhile Gujarat Gas (GGAS) and GSPC Gas). The new entity is now the largest city gas distribution (CGD) player in India with volumes of ~6.5mmscmd (~1.7x IGL).

We are wary of GGL owing to its high leverage to industrial segment (75% versus 20% of IGL) resulting in: 1) near-term pressure in volumes — sharp correction in alternate oil-linked furnace oil prices (~20% cheaper than PNG) is resulting in switch by SMEs (textiles, chemicals, etc); 2) lower margins than IGL — as it primarily relies on expensive RLNG (70% of feedstock) whereas IGL gets 80% allocation of cheaper APM gas; and 3) demanding valuations — GGAS had an excessive rally, doubling YoY before delisting in May 2015 and is at 22% premium to IGL on FY16E PER.

We expect the new entity to list (around September 15) with a significant gap down, after dismal Q2FY16 and FY15 earnings, which missed consensus by ~20%. We prefer IGL over GGL. ‘Not Rated.

Post delisting, merged GGL for the first time reported consolidated earnings for FY15 and Q1FY16. Dismal Q1FY16: Lower volumes at 5.8mmscmd (6.5mmscmd in FY15), despite 11% pre–emptive price cuts to prevent switch to alternate fuels. Gross margins (R6/scm versus R6.1/scm in FY15) were also impacted. Competitiveness of PNG further deteriorated QTD and management believes stress in volumes over short term.

Brooks Laboratories shares hit a lower circuit limit of 10 per cent at Rs 58.30 on BSE on Friday after the market regulator Securities and Exchange Board of India (Sebi) barred the company and its top executives from the securities markets for five years. (PTI)

Brooks Laboratories shares hit a lower circuit limit of 10 per cent at Rs 58.30 on BSE on Friday after the market regulator Securities and Exchange Board of India (Sebi) barred the company and its top executives from the securities markets for five years. Meanwhile, Sensex was up 103.23 points, or 0.40 per cent, at 25,725.40.

Around 1.04 lakh shares exchanged hands on the Bombay Stock Exchange on Friday, compared with an average volume of 47,000 thousand shares in the past two weeks.

The scrip hit a high of Rs 60.75 and a low of Rs 58.30 during the day. Brooks Laboratories shares hit a 52-week high of Rs 106.80 on July 31, 2015 and a 52-week low of Rs 36.15 on February 28, 2015.

Sebi on Thursday barred Brooks Laboratories and its top executives from the securities markets for five years for siphoning off funds and concealing of material information in its initial public offer (IPO) documents.

In its order, Sebi said Brooks and its directors and officers are prohibited from buying, selling or dealing in the securities market, in any manner whatsoever, for a period of 5 years. However, Sebi added that prohibition already undergone by Brooks, its directors and officers pursuant to the interim order dated December 28, 2011 shall be taken into account for the purpose of computing the period of prohibition imposed in this order.

Meanwhile, Sebi permitted Brooks to utilise the funds lying in the escrow account for the objects disclosed in the Prospectus.

Brooks Laboratories is a smallcap pharmaceutical contract research and manufacturing services company with market capitaliation of Rs 104.81 crore. In the past one month the share price of the company declined 28.77 per cent to Rs 64.75 on September 10. Sensex plunged 8.82 per cent during the same period.

For the quarter ended June 2015, the company posted a consolidated net profit of Rs 1.51 per cent crore, down 1.37 per cent, against Rs 1.54 crore in the corresponding quarter a year ago.

Raymond shares gained as much as 2.6 per cent in the morning trade on Friday

Raymond shares gained as much as 2.6 per cent in the morning trade on Friday after the company informed stock exchanges on Thursday that the company’s unlisted wholly owned subsidiary company, Silver Spark Apparel, has completed the acquisition of Robot Systems on September 10, 2015.

At 10.29 am, Raymond shares were trading 1.08 per cent higher Rs 396.70 apiece. The scrip opened at Rs 394.50 and had touched a high and low of Rs 402.70 and Rs 390.95, in trade so far.

In a BSE filing, the company said, “As per the agreement(s), the total consideration for the above acquisition is Rs 28 crore only.”

The promoters holding in the company stood at 40.61 per cent while institutions and non-institutions held 20.16 per cent and 37.92 per cent respectively.

The company had earlier on April 3, 2015, entered into a Share Purchase Agreement (SPA) with Gokaldas Exports, Robot Systems and Gautam Chakravarti for acquisition of entire shareholding in Robot Systems, a wholly owned subsidiary of Gokaldas Exports.

For the quarter ended June 2015, the company posted a consolidated net loss of Rs 13.72 crore against net loss of Rs 32.85 crore in the same quarter a year ago.

Arvind shares gained as much as 2.7 per cent in the morning trade on Friday after the company informed stock exchange (before market hours) about its entry into the beauty and cosmetics segment (Reuters)

Arvind shares gained as much as 2.7 per cent in the morning trade on Friday after the company informed stock exchange (before market hours) about its entry into the beauty and cosmetics segment through partnership with SEPHORA, owned by LVMH Moet Hennessy Louis Vuitton, a french conglomerate.

At 9.34 am, shares the textile and apparel company was trading 2.08 per cent higher at Rs 265.10 apiece. The scrip opened at Rs 264.90 and had touched a high and low of Rs 267.30 and 263.40, respectively, in trade so far.

With this partneship, Arvind will now manage SEPHORA’s portfolio of three stores in Delhi and one in Pune. SEPHORA is a leading beauty retailer with a presence in 31 countries.

On a year-to-date basis, the share price of Arvind Ltd slid 7.76 per cent to Rs 259.70 on September 10. The BSE Sensex slid 6.85 per cent to 25,622.17 during the same period.

For the quarter ended June 2015, the company posted a consolidated net profit of Rs 58.04 crore, down 35.87 per cent, against Rs 90.51 crore in the corresponding quarter a year ago.

Arvind has a portfolio of 12 of its own brands. It also runs the country’s largest value retail chain Megamart and the UK-based department store chain Debenhams, and the apparel specialty retail chain Next. Arvind has over 1.3 million square feet of retail space across various brands.

The BSE Sensex and NSE Nifty opened higher on Friday tracking positive global cues. (Photo: PTI)

9.46 am: The rupee recovered 9 paise at 66.34 against the dollar in early trade today on fresh selling of
the US currency by exporters. Sensex was up 114.41 points at 25,737. Nifty was up 42.70 points at 7,830.

9.20 am: The BSE Realty index was up 1.12 per cent at 1,293.85. HDIL, Sobha and Prestige Estates were trading over 1.50 per cent higher at Rs 60.90, Rs 259 and Rs 208.30. Sensex was up 203 points at 25,825.

The BSE Sensex and NSE Nifty opened higher on Friday tracking positive global cues. Sensex opened 171.60 points up at 25,793.77. Nifty opened 45.70 points higher at 7,833.80.

All the sectoral indices on the Bombay Stock Exchange also opened in green.

Arvind Ltd informed BSE before market hours that it has marked its entry into the beauty and cosmetics segment through a partnership with SEPHORA, owned by LVMH Moet Hennessy Louis Vuitton, a French Luxury Conglomerate.

Benchmark indices declined around 0.40 per cent on Thursday tracking sluggishness in the global market after gloomy Chinese data added to the level of anxiety.

Global Markets

New York: US stocks ended higher on Thursday in another day of broad swings as investors showed nervousness ahead of next week’s much-anticipated Federal Reserve meeting, but gains in Apple and biotech shares supported the day’s advance.

London: Britain’s FTSE 100 index fell on Thursday, extending its early losses as sterling strengthened after the Bank of England sounded less concerned than expected about the domestic impact of the turmoil in global markets.

Tokyo: Japan’s Nikkei share average fell in choppy trade on Friday morning as investors remained focused on the US Federal Reserve’s monetary policy meeting next week.

Hong Kong: The Hang Seng Index up 1.21 percent.