According to market experts, if Seventh Pay Commission recommendations are implemented, it will benefit consumption demand in India.. (Photo: Reuters)

The Seventh Pay Commission on Thursday recommended a 23.55 per cent rise in salary, allowances and pension along with a virtual one-rank-one-pension for civilians, involving an additional outgo of Rs 1.02 lakh crore a year.

According to market experts, the increase in Central Pay Commission (CPC) will boost consumption demand in India.

A minimum pay of Rs 18,000 per month and a maximum of Rs 2.5 lakh per month has been recommended by the Commission. The recommendations, which are to be implemented from January 1, 2016, will benefit 47 lakh central government employees and 52 lakh pensioners.

Religare in a research note said, “We estimated a hike of 28 per cent in CPC. The implementation of the CPC and state pay commissions would boost India’s consumption demand and GDP growth, benefitting consumer discretionary companies such as Bajaj Auto, Maruti Suzuki, Hero MotoCorp, Bata India, Jubilant FoodWorks, Kajaria Ceramics and Voltas.”

Japanese brokerage firm Nomura said, “Pay hike for central government employees is likely to benefit four-wheeler demand by a FY17-18F CAGR of around 5-7 per cent. We believe that the penetration of two-wheelers is already high with government employees, and thus the benefits may be more limited to a FY17-18F CAGR of 1.5 per cent – 2.5 per cent. Maruti Suzuki (MSIL) would likely be a key beneficiary as its products in the entry segment would appeal to these employees. After the Sixth Pay Commission, MSIL’s sales to government employees rose from 4 per cent of volumes in FY08 to 14 per cent in FY11.”

According to market experts, passenger vehicle (PV) demand in India to rise from around 8 per cent in FY16F to 15 per cent in FY17-18F. Nomura believes that visibility is high for strong growth in FY17-18, given the boost from the Seventh Pay Commission.

Financial impact of implementing recommendations in total will be Rs 1.02 lakh crore – Rs 73,650 crore to be borne by Central Budget and Rs 28,450 crore by Railway Budget.

Petronet has a 25-year deal with Qatar’s RasGas to buy 7.5 million tonnes of LNG annually. (Image Source: IE. Picture for representation only)

Share price of domestic gas companies Petronet LNG and GAIL (India) soared over 8 per cent in the morning trade on Friday as Ras Gas Company (RasGas) has agreed to modify sales and purchase agreement (SPA) with Petronet. Petronet has a 25-year deal with Qatar’s RasGas to buy 7.5 million tonnes of LNG annually.

According to Petrowatch, RasGas ready to modify SPA with Petronet. RasGas Company Limited is a liquefied natural gas producing company in Qatar. It is the second-biggest LNG producer in Qatar after Qatargas.

At 10.33 am, the share price of Petronet LNG was trading 8.20 per cent up at Rs 223. The scrip opened at Rs 208.25 and had touched a high and low of Rs 224.60 and Rs 208.25, respectively, in trade so far.

Similarly, share of GAIL (India) were trading 8.03 per cent up at Rs 342.35 apiece. The stock opened at Rs 321 and had touched a high and low of Rs 346 and Rs 321, respectively, in trade, so far. The benchmark BSE Oil and Gas index was up 1.68 per cent at 9,124.81.

According to Kotak, Petronet and RasGas have agreed ‘in principle’ to postpone $1.5 bln of penalties for the shortfall in LNG off-take.

Contract renegotiation may provide significant earnings impetus to GAIL and remove the key overhang for Petronet. India lifted 30 per cent less volume, till July this year, under long-term Qatar LNG deal.

(With inputs from Reuters)

Bosch built key components in the diesel engine used in six Volkswagen models and one Audi model that the automaker has admitted to rigging to defeat emissions tests. (Photo: PTI)

Shares of Bosch slid as much as 3.64 per cent in the early trade on Friday on reports that the US authorities are investigating Bosch India’s parent German auto supplier Robert Bosch GmbH over its role in Volkswagen AG’s massive scheme to cheat US emission standards.

Bosch built key components in the diesel engine used in six Volkswagen models and one Audi model that the automaker has admitted to rigging to defeat emissions tests.

At 9.36 am, shares of Bosch were trading 2.44 per cent down at Rs 18,730 apiece. The scrip opened at Rs 19,000 and had hit a high and low of Rs 19,000 and Rs 18,500, respectively, in trade so far. Sensex was marginally down 0.08 per cent at 25,830.16.

According to source, the probe is at an early stage, there is no indication that US prosecutors have found evidence of wrongdoing at Bosch.

The promoters holding in the company stood at 71.18 per cent while institutions and non-institutions held 19.36 per cent and 9.46 per cent, respectively.

The share price of the company touched a 52 week high of Rs 27989.25 on 20-March-2015 and a 52 week low of Rs 17,505 on 26-November-2014.

(With inputs from Reuters)

Canara Bank stocks will be in focus as the company on Thursday said it will raise an additional capital of Rs 2,400 crore by issuing bonds on private placement basis to support its asset growth. (PTI)

The BSE Sensex and NSE Nifty opened on a flat to cautious on Friday following global cues. At 9.27 am, Sensex was trading 19.91 points down at 25,822.01. Similarly, Nifty was trading 5.20 points down at 7,837.55.

Below are the stocks that are likely to be in focus today

Canara Bank: The bank on Thursday said it will raise an additional capital of Rs 2,400 crore by issuing bonds on private placement basis to support its asset growth.

Tata Motors: Jaguar Land Rover India on Thursday launched a variant of its locally-assembled luxury SUV ‘Range Rover Evoque’, priced between Rs 47.1 Lakh and Rs 63.2 lakh, and said it expects to grow above the industry average this year.

NALCO: The state-run aluminium maker Nalco will contribute 5 per cent of Corporate Social Responsibility (CSR) funds in this fiscal towards Prime Minister Narendra Modi’s Skill India mission. It signed on Thursday an Memorandum of Understanding (MoU) with National Skill Development Fund (NSDF) and National Skill Development Corporation (NSDC), the navratna company said in a statement.

Sugar stocks: The sugar stocks are likely to remain under pressure, on report that India’s sugar production rose by 33 per cent to 7.61 lakh tonnes till November 15th in the current marketing year on higher output from Maharashtra.

PTC India Financial Services(PFS): The company on Thursday said it has signed a pact with India Infrastructure Finance Company (IIFCL) to provide financing for infrastructure projects.

Jubliant Foodworks: Jubilant Food Works, which operates Domino’s Pizza chain, has partnered with Hyderabad-based start-up Zippr to use latter’s coding method for delivering the orders instead of using consumers’ address.

Dr Reddy’s: The pharma major will has reportedly sued AstraZeneca over purple colour of Nexium generic.

Vedanta: With minority shareholders of Cairn India said to be against the merger of the company with parent Vedanta Ltd, Vedanta Group Chairman Anil Agarwal hoped he wouldn’t have to sweeten the merger offer.

Retain ‘buy’ on Sun Pharmaceuticals with a target price of R1,050 per share. Taro announced that it plans to invest in wind energy plant in the US along with Sun Pharma to gain tax benefits.(Photo: PTI)

Retain ‘buy’ on Sun Pharmaceuticals with a target price of R1,050 per share. Taro announced that it plans to invest in wind energy plant in the US along with Sun Pharma to gain tax benefits. The total equity funding will be up to $100 million. While this is in line with Sun’s well-known tax planning measures and is good tax planning, we believe this is negative due to two factors – the supplier

for the project is Suzlon, where Sun’s promoters hold a 23% stake, and it diverts cash from the core pharma sector.

The announcement does not change our positive view on the stock. We have been positive on Sun Pharma as we do not expect Halol to escalate. Further, we expect significant synergy benefits from Ranbaxy and benefits from the strong product pipeline. Although the investment seems to a good tax saving measure, it is a negative, in our view.

Taro is seeking board approval to invest in a wind energy project in the US along with Sun Pharma. The project cost is expected to cost $250 million, with at least 60% debt financing. Taro will invest 33%; Sun Pharma will own the rest.

The investment is largely to gain tax incentives that renewal energy projects get in the US. Management has stated that this is not a entry into renewable energy

but largely a tax planning exercise.

Management expects the tax savings to greatly reduce the company’s tax burden and in that sense is a good tax saving exercise.