Adani Ports and SEZ’s (APSEZ) Q2FY16 consolidated PAT at R670 crore came in line with our estimate, boosted by ~R310 crore SEZ revenue, negating the impact of lower volumes—37MT versus ~42MT estimate. Management reiterated impact of lower coal imports on cargo volumes  to be mitigated largely by coastal shipping as well as imports by coastal power plants (AEL coal trading volume growth vindicates this). We continue to believe that APSEZ will not only leverage its strong asset- based balance sheet, but also its expertise to pursue growth opportunities. We have recalibrated volumes, resulting in revised target  price of INR351 (INR367 earlier). Maintain ‘buy’.

APSEZ’s consolidated cargo volume at ~36.5MT grew 4% YoY, but fell 8% QoQ due to  lower coal volumes and slow ramp up at Dahej. Mundra container volumes at 732k  TEUs grew 10% YoY despite tepid ExIm container market, which grew mere ~2%. Apart  from gaining market share, transshipment cargo (~140k TEUs) handled at Mundra  helped the company sustain such growth rates. While cargo at Dahej was 1.2MT  against 3MT estimated, Dhamra and Hazira volumes were on track. Adjusted for the INR3.1bn SEZ land sale income, consolidated Ebitda margin came in line at 62%.

The issuance of rupee-denominated offshore bonds, also known as ‘Masala’ bonds, by domestic firms will help larger issuers diversify their funding sources without taking on currency risks, Fitch Ratings said today. (Reuters)

The issuance of rupee-denominated offshore bonds, also known as ‘Masala’ bonds, by domestic firms will help larger issuers diversify their funding sources without taking on currency risks, Fitch Ratings said today.

The Reserve Bank of India (RBI) in late September announced relaxed rules to allow Indian companies to issue local currency-denominated bonds overseas. This follows a 2014 decision to allow the Asian Development Bank and International Financial Corporation to issue Masala bonds in the international market.

“The ability to diversify funding would be credit positive, but in the early stages of development the market will likely be restricted to better-quality issuers or ones with some degree of name recognition in the local markets,” Fitch said in a statement.

The new guidelines allow for a wide range of potential borrowers, including non-bank financial institutions, and other corporates which were not permitted to issue offshore under the earlier external commercial borrowing (ECB) framework.

Masala bonds will be required to have a minimum maturity of five years, and there is a USD 750 million per year limit for borrowers – though a firm can exceed this limit with the RBI approval.

“There have been no Masala bond issues by Indian firms yet. But Fitch believes that issuers will be likely to have to pay more than if they issued in the domestic market,” the statement said.

As Masala bonds are denominated in rupees, foreign investors will be taking currency risk. Also, issuers will most likely have to pay a premium for the limited offshore liquidity in rupee.

“As such, the main incentive for Indian companies to issue Masala bonds is likely to be for the diversification of funding sources, as opposed to price,” Fitch said.

Non-bank financial institutions, which currently rely heavily on domestic banks for funding, could particularly benefit from the new market.

“That said, the scope for development of the Masala bond market is likely to be limited in the near term. Fitch believes that in the early stages only better-quality firms at investment grade – state-owned enterprises and large non-bank financial institutions – will be in a position to successfully issue,” the statement said.

Smaller, sub-investment-grade issuers may not find the Masala bond market practical.

“Overall, the development of a Masala bond market would be positive for Indian firms, opening up potentially significant new sources of funding.

“However, the development of the market beyond a select group of large, higher-quality issuers could take time and will be dependent on international liquidity, domestic macroeconomic variables and foreign-investor sentiment,” Fitch said.

Nestle India shares gained as much as 4 per cent on Wednesday after the company informed BSE that it is planning to commence sale of Maggi Noodles from this month (Photo: Reuters)

Nestle India shares gained as much as 4 per cent on Wednesday after the company informed BSE that it is planning to commence sale of Maggi Noodles from this month as 100 per cent of the samples of Maggi Noodles sent from newly manufactured stocks have been cleared by all three accredited laboratories mandated by the Bombay High Court.

At 1.57 pm, shares of Nestle India were trading 2.13 per cent up at Rs 6,366.95 apiece. The scrip opened at Rs 6256.85 and had touched a high and low of Rs 6479 and Rs 6220.80, respectively, in trade so far.

In a release, Nestle India said, “All the samples of Maggi Noodles Masala have been cleared with lead much below permissible limits. We will make our best endeavor to commence the sale of Maggi Noodles Masala with this month.”

Nestle India has conducted over 3500 tests representing over 200 million packs in both national as well as international accredited laboratories for testing and all reports are clear. In addition to these, various countries including USA, UK, Singapore, Australia and others have found Maggi noodles exported from India safe for consumption.

In the past one year, the share price of Nestle India slid 1.63 per cent to Rs 6234.35 on November 3.

Prism Cement reported standalone net loss widened to Rs 33.26 crore for the quarter ended September 30, against a net loss of Rs 19.76 crore in the year-ago period.

After sliding around 5 per cent on Tuesday, the share price Prism Cement fell nearly 4 per cent in the morning trade on Wednesday after the company reported standalone net loss widened to Rs 33.26 crore for the quarter ended September 30, against a net loss of Rs 19.76 crore in the year-ago period. The company annouced its Q2 result on Tuesday during market hours.

At 10.40 am, Prism Cement share price was down 3.77 per cent at Rs 85.60. The scrip opened at Rs 89.80 and had touched a high and low of Rs 89.95 and Rs 85.30, respectively, in trade so far.

For the quarter ended September 2015, net sales of Prism Cement jumped by 4.56 per cent to Rs 1,392.71 crore against Rs 1,332.02 crore in the corresponding quarter a year ago.

Prism Cement sold 13.45 lakh tonnes (LT) of cement and clinker in the second quarter this fiscal against 12.92 LT during the same quarter of 2014-15. It also paid Rs 7.33 crore as contribution towards the District Mineral Foundation (DMF) and the National Mineral Exploration Trust (NMET).

On outlook, Prism Cement said the short term scenario remains “challenging”, however government initiatives such as housing, smart cities and the push to infrastructure aided by a stable inflation and rate cut bodes well for the medium and long term economic outlook.

In the past one year, the share price of Prism Cement jumped 17.5 per cent to Rs 88.95 on November 3 while the benchmark index BSE Sensex plunged 4.55 per cent during the same period.

Prism Cement manufactures and markets Portland Pozzollana Cement (PPC) with the brand name ‘Champion’ and the full range of Ordinary Portland Cement (OPC) of 33, 43 and 53 Grades.‘Champion’ Prism’s largest selling product is a general-purpose cement popular for all applications during house construction by individuals. Prism Cement’s OPC is in demand for specialised cement concrete applications like high-rise buildings, bridges, manufacturing AC sheets, pipes, poles etc.

(With inputs from PTI)

The BSE Sensex and NSE Nifty opened on a firm note on Wednesday following positive global markets. (Express Photo)

10.28 am: Meanwhile, Angel Broking  in a research note said, “We have a positive view on the markets, as we believe that favourable macro cues such as low inflation, declining interest rates, cheap global commodities and strong governance are likely to drive improvement in corporate performance over the next 18-24 months.”

Stocks like Amara Raja Batteries, Ashok Leyland, HDFC Bank, Inox Wind, Radico Khaitan, Surya Roshni are among the Diwali top picks of Angel Broking.

10.23 am: Brokers said a firming trend at other Asian markets following a strong closing in US markets buoyed trading sentiment here. Besides, value-buying in recently battered bluechips too supported the rise. Sensex was up 104.38 points at 26,694.

10.07 am: Jain Irrigation shares jumped as much as 4 per cent in the early trade on Wednesday after the company informed BSE before market hours that it has bagged Maharashtra State Electricity Distribution Company’s (MSEDCL) most awaited tender worth Rs 473 crore for supply and installation of 8,959 solar agri-pumps. This is the first pilot phase out of the world’s biggest solar agri-pump project for 500,000 pumps launched by Government of Maharashtra through MSEDCL.

9.44 am: The rupee appreciated by 11 paise to 65.53 against the dollar in early trade on Wednesday on selling of the American currency by exporters and banks.

9.20 am: Sensex was up 201.36 points at 26,791.95.  GAIL and Maruti Suzuki India shares were trading 1.68 per cent and 0.46 per cent down at Rs 302.30 and Rs 4,460.

9.18 am: Sensex was up 182 points at 26,772.60. In the 30-share index, Tata Motors and Hindalco were trading 4.24 per cent and 1.64 per cent up at Rs 398.25 and Rs 83.60. Tata Motors on November 1 reported 1 per cent growth in total sales at 43,486 vehicles for October 2015 compared to 42,862 units in the same month of last year.

9.15 am: The BSE Sensex and NSE Nifty opened on a firm note on Wednesday following positive global markets. Sensex opened 101.56 points up at 26660.71. Nifty opened 44.2 points up at 8,104.90.

Rest of Asian shares also rose on Wednesday, taking early cues from overnight Wall Street gains, while investors’ sharper risk appetite lifted US debt yields and supported the dollar. Dow Jones Industrial Average index gained 0.50 per cent on Tuesday.

Hang Seng, Nikkei and Shanghai were up around 2 per cent in the morning trade.

Activity in China’s services sector expanded at its fastest pace in three months in October, thanks to stronger new business, a private survey showed on Wednesday, easing concerns over persistent weakness in the economy as the manufacturing sector falters.

The Caixin/Markit Purchasing Managers’ Index(PMI) rose to 52.0 in October from September’s 14-month low of 50.5, hitting the highest level since July 2015.

Back home, the BSE Sensex and NSE Nifty swung between gains and losses on Tuesday as concerns about earnings continued to weigh, although higher Asian shares supported sentiment. Sensex closed 31.44 points up at 26,590.59 and snapped its 6-day losing streak. Similarly, Nifty closed 9.90 points up 8,060.70.

Tech Mahindra’s stocks will be in focus as country’s fifth largest IT services firm on Tuesday reported 9.1 per cent increase in consolidated net profit to Rs 785.63 crore for the quarter ended September 30.

Companies such as Voltamp, Bajaj Hind, Neyveli Lignite, KSB Pumps, Pricol, Omaxe, SCI, Bata India, Punjab Chemicals, Canara Bank, JK Lakshmi, Sparc, Century Ply and JB Chem Pharma may announce their earnings on Wednesday.

(With inputs from agencies)