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Despite the promise of the dedicated freight corridor (DFC) helping it to stay ahead of competition, Container Corporation of India (Concor) could face a tough time if its recent performance and the market share gains for the road players is anything to go by. Earlier this month, the government had highlighted plans to set up an integrated transport and logistics framework helping create a hub-and-spoke model, lower logistics cost and setting up 35 multi-modal logistics parks (MMLP). Analysts at Antique Stock Broking believe that though the rollout of the infrastructure projects (including DFCs) and implementation of the goods and services tax or GST (with increased share of third party logistics) would help logistics companies, it could also potentially increase competitive intensity for industry leaders (like Concor), which arealso looking to aggressively expand presence through MMLPs.The bigger worry are doubts on the shifting of cargo from rail to road players once the DFC is ...
Rising demand for piped natural gas (PNG) from industrial users augurs well for Gujarat Gas. The company derives about 72 per cent of its sales volumes from the industrial segment as against 12 per cent for Indraprastha Gas (IGL) and 14 per cent for Mahanagar Gas (MGL) and hence is best placed to benefit from higher growth of industrial volumes. Falling liquefied natural gas (LNG) prices globally will expedite the shift towards LNG from other coal-based fuels, believe analysts. Analysts at Elara Capital expect industrial PNG volumes could double to about 10 million metric standard cubic metre per day (mmscmd) by FY22 from 4.5 mmscmd in FY16 and aid prospects of all the above three city gas distribution companies. Gujarat Gas has also witnessed rising volumes in Morbi - particularly from ceramic plants. In fact, the Morbi industrial segment has already added volumes of about 0.5 mmscmd to the 5.3 mmscmd volumes reported by Gujarat Gas in the latest December quarter. This has triggered .
Aviation stocks shot up between 4.5 per cent and11 per cent on Thursday on tailwinds that include robust passenger growth traffic in February month, a weakening dollar and lower crude oil prices. Fuel, maintenance, lease costs are dollar denominated and any weakness in the greenback versus the rupee benefits airlines. The benign cost environment, according to ICICI Securities, has received fresh impetus with crude oil and dollar declining by 10 per cent and 4 per cent, respectively so far in 2017. Ansuman Deb of ICICI Securities believes that currency is the biggest variable in earnings sensitivity for airlines and sustained strengthening of the rupee will lead to earnings upgrades in this space. The favourable impact would be visible in the March quarter results which is expected to come in better than initial estimates. Mayur Milak of Anand Rathi Research believes that with yields (average fare paid per mile by passengers) improving and declining crude oil prices (on rupee ...
Cairn India has got a big relief as the Production Sharing Contract (PSC) of its Rajasthan Block, which is a 70:30 partnership with ONGC, can now be extended beyond 2020. The government allowed companies to extend the PSC by increasing the profit-sharing ratio by 10 percentage point. And this should be a major worry, given the larger benefits for Cairn.For long, the company has been taking efforts to extend the contract, since its major oil and gas producing fields are located in this block. The extension is important as it paves the way for the company to concentrate on increasing production and committing fresh capex for the Mangala, Bhagyam, Aishwarya and Raageshwari fields in the Rajasthan block. Without clarity on extension, it would have been a risk for Cairn India to commit investments, which typically run into crores of rupees given the capital intensive nature of the business. Now, with new investments, it can raise the fields' production, which has seen no major increase in .
A few days back when State Bank of India (SBI) announced a one-time settlement (OTS) scheme for tractor and farm equipment loans, it signalled that instalment collections may take some time to recover. While investors in non-banking finance companies (NBFCs) haven't encountered a similar situation over the last few years, there are concerns whether SBI was setting the stage for more of such leeway. Election promises and demands in states such as Uttar Pradesh and Maharashtra which favoured farm loan waiver also increases concerns. A senior executive of a private sector bank states that while a farm loan waiver looks unlikely as state governments don't have the money yet to compensate banks for the loans waived, schemes like SBI's OTS on farm and tractor equipment loans may tempt customers to negotiate with their NBFCs on similar lines. "If it was easy to interpret Reserve Bank of India's 60-day dispensation as loan waiver, OTS scheme may play more on customer sentiment," he states. ...
The Biocon scrip is up about 5 per cent this week after the company announced that its global development and marketing partner, Mylan has announced a settlement with Roche and Genentech who hold the patent for cancer drug, trastuzumab. Since the development is significant and boost Biocon's fortunes, analysts see more gains for the scrip.The drug is estimated to have generated sales of just under $7 billion (about Rs 46,000 crore) largely from developed markets of US and the European Union in 2016. Analysts at Morgan Stanley believe that Mylan and Biocon would be able to generate sales of $200 million in two years of launch assuming a 60 per cent price erosion, and a 15 per cent market share. This should help Biocon generate about $40 million (about Rs 260 crore) in profits assuming a 35 per cent profit share. The upside from the emerging market countries is expected to be over and above this profit estimate.The product is expected to be launched in the second half of 2018 in Europe .