SAIL achieves best ever Q 2 sales

The July-September quarter of 2010 has been the best-ever Q2 for Steel Authority Of India with sales of 3.17 million tonnes (MT) achieved during the period, sources in Rourkela Steel Plant said Saturday.

In comparison to sales in Q1 SAIL achieved a growth of 30 percent. The previous best Q2 in respect of sales was 3.08 MT achieved in 2009-10, they said.

During this year's Q2 SAIL sold 8.5 lakh tonnes of special and value-added steel products, showing a growth of 10.1 percent over the corresponding period last year. Special steel constituted 30 percent of the total domestic sales achieved in Q2.

Sales growth in Q2 was mainly due to higher intake by construction and manufacturing sectors. This was reflected in higher sales of products such as wife rods, rounds and bars, structurals, CR sheets/coils and galvanised items, the sources added.

Maruti sees Sept vehicle sales rising 32-33%

Top Indian car maker Maruti Suzuki expects September vehicle sales to rise an annual 32 to 33%, bolstered by robust domestic demand, its chairman said on Thursday.

RC Bhargava said the company, 54.2% owned by Japan's Suzuki Motor, expects to sell 1.2 million vehicles in the current fiscal year that ends next March from 1.02 million in the previous year.

India is one of the world's fastest growing market for cars as a rapidly expanding economy boosts incomes and consumer spending.

"Clearly, the market continues to hold firm. There is no softening," Bhargava said. "We are now looking fairly optimistically at the rest of the year."

Beginning October, Maruti will increase its annual car-making capacity to 1.3 million units from its current capacity of 1.2 million units, he said.

Maruti plans to invest USD 1.3 billion over the next three years on manufacturing plants to boost capacity, it had said earlier this month.

The company would build its fourth auto plant in India, boosting its output to 1.5 million units a year. The new factory would start operations in 2013, with annual output capacity of 250,000 cars.

Bhargava said September sales would be higher than in August, when they rose 24% from a year earlier to a record for any month.

Maruti's share of the Indian car market at the end of August was 51.8%, he said. This is down from 53.2% in the previous fiscal year and 55.1% in 2008/09.

"We are not focused fundamentally on retaining market share. It's not a worry because we know we have capacity constraints, we have a waiting list," Bhargava said. He also said Japan's Nissan Motor Corp would source less than 30,000 cars this fiscal year from Maruti, compared with 51,072 cars last fiscal year, primarily due to a decline in European demand.

Maruti currently has a contract with Nissan to make and export the Pixo hatchback to European markets.

Shares in Maruti, which has a market value of USD 9.2 billion, were trading up 1% by RS 1,445 at 2.29 pm (0859 GMT) in a subdued Mumbai market. The stock is, however, down 7.4% this year versus a 14% rise in the index.

KRBL: Stock that gained 54% in 5 days

The catastrophic floods which have destroyed Pakistan's rice crop seem to have opened doors for India's Basmati rice producers. One of the beneficiaries has been Basmati rice exporter KRBL. Its stock price gained 54% over the last five days. Today, however, it managed just 1.80% or Rs 0.65 to end at Rs 36.80. It touched an intraday high of Rs 38.50 and an intraday low of Rs 36.05 and touched a 52-week high of Rs 38.50.

Why the run-up?

The most devastating floods in Pakistan’s history has destroyed crops and damaged infrastructure severely. A rice exporters’ group in Pakistan has forecast that exports may plunge significantly for the year.

In an interview, Anil Mittal, CMD, KRBL said, "The rice prices have increased by about USD 100 in the last 10-15 days. This is primarily because Pakistan floods have helped India to boost their prices. Since Pakistani prices have also increased by USD 100-150 in the last one month, that is the reason Indian prices have been boosted by USD 150 per tonne.

India, the second largesst producer of rice, had put into practice a trade ban on non-Basmati rice in April 2008 to increase the country's domestic supplies. The drought in 2009 further compounded issues for the government with a double-digit fall in rice production forcing it to continue with its restrictions in 2009.

Mittal however expects relaxations on export parameters for non-Basmati rice any time soon. "Looking at the monsoons and looking at the prospects of non-Basmati crop, I am quite confident that by October, the government will take the position of the crop and will definitely open the exports of non-Basmati rice."

As compared to about 2.8 million tonne of the total Indian export, KRBL's export this year is about 140,000 tonne. "We are expecting a 20% rise overall. The Indian exports of Basmati will jump by 20% this year because of the Pakistani floods," said Mittal.

What experts said during the week:

Rahul Mohindar, viratechindia.com told, "KRBL is pretty good from a long term count. But the stock has obviously run up to a good degree. It had a significant price and volume breakout over the last couple of weeks, which certainly makes this very potential longer run. But again if you are worried about the short term, Rs 36 to Rs 38 is a resistance area. We are still sitting in that zone where we might knock off 8% or 10%. So unless you are really worked out about the very short term I would still recommend holding on to the stock. We see this as a candidate for about Rs 52 and one has to be prepared that the stock can correct to something like Rs 31–32. So keeping that downside cushion, one should continue holding on to KRBL. It has made a case with the kind of volumes and price breakouts that we have seen over the last week where it shows that there is a lot more potential to come."

He added,"I am obviously looking at a timeframe of about 6 months plus. It’s a stock which can give you one of those sudden momentum moves. But again one should keep a timeframe of approximately 6 months in mind."

Mitesh Thacker, Technical Analyst, miteshthacker.com said, "We have seen a strong run-up in all the rice stocks. KRBL though it is difficult to give a price target on it, because it has broken into all time highs, but if we look at the momentum and the technical setup, there is at least a 15% upside, and Rs 40-42 should be easily tested probably even higher."