India sees fall in air traffic demand this February

India is the only domestic market in the world to see a decline in air traffic demand this February compared to last year, even as global traffic continued to show "solid" growth in the same month, IATA said today.

India's domestic air traffic fell 1.8 per cent in February compared to the same month in 2013, making it "the only domestic market to see a contraction in demand," the International Air Transport Association (IATA) said on the latest global air traffic figures.

 "Subdued consumer sentiment ahead of the upcoming election as well as elevated fare levels compared to a year ago, are likely to be exerting downward pressure on demand," it said in its analysis of the data for February 2014.

Indian carriers' revenue per kilometre (RPK), which measures the volume of passengers carried by the airlines, declined by 1.8 per cent, while its average seat per km (ASKM), measuring available passenger carrying capacity of airlines, stood at 6.6 per cent.

Passenger load factor or the average space filled in an aircraft stood at 73.2 per cent, the IATA data showed.  While global passenger traffic showed a demand growth of 5.4 per cent compared to February 2013, Asia Pacific carriers together recorded an increase of four per cent, mainly due to related developments in China.

 Middle Eastern carriers had the strongest year-over-year traffic growth at 13.4 per cent, as airlines there continued to benefit from the strength of regional economies and solid growth in business-related premium travel, the IATA said.

Its Director General and CEO Tony Tyler said the strong demand was consistent with "the pick-up in global economic growth, particularly in advanced economies."

But, governments which "treat aviation as if it were a luxury item -- or a necessary evil -- are depriving their populations of a key engine of growth and job creation," he added.

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Coal India hikes price of certain grade of coal

"The CIL board in its 306th meeting held on March 20, 2014 has approved fixation of add-on price in respect of coal produced from Rajmahal mine of Eastern Coalfields Ltd at Rs 390 per tonne in place of existing Rs 300 per tonne.

State-owned Coal India (CIL) has increased the price of a certain grade of coal from one of its mines in Godda district of Jharkhand.

The increase has been with effect from April 1 as per the decision taken by the Coal India board, sources said.

"The CIL board in its 306th meeting held on March 20, 2014 has approved fixation of add-on price in respect of coal produced from Rajmahal mine of Eastern Coalfields Ltd at Rs 390 per tonne in place of existing Rs 300 per tonne.

"This is in order to rationalise the price of coal produced from Rajmahal mine of Eastern Coalfields due to reclassification of Grade of Rajmahal mine of Eastern Coalfields Ltd and price adjustment," according to a CIL Official.

Also read:  Coal India sets December deadline to firm up power biz

Coal India had in December last year hiked prices of non-coking coal produced by its subsidiary Western Coalfields by 10 percent.

"...Last time, during rationalisation in the end of February 2011, there was a substantial cut. In the process, it had some impact. So, now we have increased it by 10 percent on WCL (Western Coalfields)," Coal India CMD S Narsing Rao had said earlier.

On account of increase, Western Coalfields will earn additional revenue of Rs 139.84 crore for 2013-14, CIL had said in a filing to BSE.

Minister of State for Coal, Pratik Prakashbapu Patil, had said in a written reply to Lok Sabha in December 2013 that Coal India Ltd may get additional revenue of Rs 2,119 crore in FY'14 on account of revision in dry fuel prices.

CIL had revised the prices of all grades of coal, barring three, for all its eight producing subsidiaries with effect from May 28, 2013.

CIL accounts for over 80 per cent of the domestic coal production.

Coal India stock price

On April 03, 2014, Coal India closed at Rs 280.85, down Rs 6.35, or 2.21 percent. The 52-week high of the share was Rs 330.65 and the 52-week low was Rs 238.35.

The company's trailing 12-month (TTM) EPS was at Rs 26.41 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 10.63. The latest book value of the company is Rs 32.48 per share. At current value, the price-to-book value of the company is 8.65.

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SAIL keeps prices unchanged in April

India's largest steel maker  SAIL has kept its prices for the current month unchanged amid weak demand and appreciation in the value of the rupee.

The move is in line with other leading steel producers, which kept their prices either unchanged or went in for up to Rs 750 per tonne cut. SAIL Chairman C S Verma told PTI: "Yes, we have rolled over (the prices). The reason is our assessment of demand supply forces."

Also read: JP Associates to sell 74% SAIL JV stake to Dalmia Bharat

He said there is no overcapacity yet in the Indian market and all domestic steel firms are able to sell their products. The situation is completely different from global scenario, which is witnessing 20-22 percent surplus capacity and stagnant price levels, he added.

JSW Steel , which is second largest domestic producer in terms of capacity, has already reduced prices for HR-coil in the range of Rs 500-750 per tonne for April.

Some steel makers like Essar have kept their prices unchanged for most of the products. State-owned Rashtriya Ispat Nigam Ltd has however increased its prices by around Rs 750 per tonne due to its low inventory levels.

At present, ex-factory prices of long products like TMT bars and structures are hovering in the range of Rs 37,000- 39,000 per tonne, while prices of flat products like HR-coil and CR-coil are at about Rs 39,000 and Rs 43,000 per tonne, respectively.

An analyst, who tracks the sector closely, said that continuing weak demand and sharp appreciation of the rupee against the US dollar seen last month forced steel makers to put a pause on price hikes, done thrice in last 3 months.

He also said that if rupee continues to appreciate in the coming months, steel makers will be forced to reduce their prices further to avoid cheaper imports.

In last one month, rupee has appreciated by about 3 percent and is currently hovering around 60 per US dollar. When asked about market conditions, Verma said these are challenging times for the steel industry and he expects prices to continue at present levels in the immediate future.

"I expect prices to continue at these levels only and I don't see any steep rise or fall in prices in the coming months. They will hover around the same level," he said.

Talking about SAIL's performance in the just concluded fiscal, he said that the company has reported 7 percent growth in its dispatches in terms of tonnage, while production of saleable steel has risen by 4 percent. Its exports stood at 0.5 million tonnes in the last fiscal.

Verma was speaking on the sidelines of an awards function organised by Dalal Street Investment Journal on Wednesday evening. SAIL and N MDC , the two firms headed by him, bagged two awards in different categories.

SAIL stock price

On April 03, 2014, Steel Authority of India closed at Rs 72.15, up Rs 0.50, or 0.70 percent. The 52-week high of the share was Rs 75.35 and the 52-week low was Rs 37.65.

The company's trailing 12-month (TTM) EPS was at Rs 6.32 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 11.42. The latest book value of the company is Rs 99.32 per share. At current value, the price-to-book value of the company is 0.73.

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Competition Commission rejects complaint against SBI

A complaint filed with CCI had alleged that SBI was abusing its dominant position by not informing car loan borrowers in advance about papers required to be signed for availing a loan and compelling them to sign various standard forms which contained one-sided terms.

Fair trade watchdog CCI has dismissed allegations that public sector lender  SBI abused its dominant market position by imposing unreasonable and unfair conditions on car loan borrowers.

A complaint filed with CCI had alleged that State Bank of India was abusing its dominant position by not informing car loan borrowers in advance about papers required to be signed for availing a loan and compelling them to sign various standard forms which contained one-sided terms.

In an order dated April 2, the Competition Commission of India held that as prima facie SBI did not appear to be in a dominant position in the relevant market (the market for vehicle loans in India) "the question of abuse of dominant position by it does not arise".

The Commission noted that vehicle loan market in India is largely competitive with the presence of many big players from public sector banks, private sector banks and foreign banks besides, non-banking finance companies and co-operative banks.

"In a highly competitive vehicle loan market, the presence of many large players itself indicates existence of enough competitive constraints to the opposite party (SBI) so as to exercise its dominance," CCI said.

The complained was filed by one Ashok R Mansata, who is the President of Concern for Citizens, a non-profit voluntary organisation.

According to the complainant, the borrowers of car loans had to sign standard forms in the presence of its officials within its premises.

It was stated that since a copy of the loan documents and forms, to be signed for availing a loan, is not given to the borrowers in advance, it was not possible for them to understand all the papers in front of SBI officials as a result the borrowers had no choice but to agree to the terms and conditions of the bank.

It was also alleged that SBI did not give the borrowers a copy of the documents signed by them.

SBI stock price

On April 03, 2014, State Bank of India closed at Rs 1895.35, down Rs 38.15, or 1.97 percent. The 52-week high of the share was Rs 2469.25 and the 52-week low was Rs 1452.90.

The company's trailing 12-month (TTM) EPS was at Rs 149.34 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 12.69. The latest book value of the company is Rs 1325.34 per share. At current value, the price-to-book value of the company is 1.43.

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Economic policies cannot be dealt with court: Govt to SC

The argument was not made by the Solicitor General Mohan Parasaran but by additional Solicitor General, who said that the courts domain is not to get into economic policy or the fixation of gas price, subject to there being no collusion between Reliance Industries and the government.

In the latest development on gas pricing tussle at the Supreme Court, the additional Solicitor General Thursday argued that economic policies cannot be dealt with the court.

The argument was not made by the Solicitor General Mohan Parasaran but by additional Solicitor General, who said that the courts domain is not to get into economic policy or the fixation of gas price, subject to there being no collusion between  Reliance Industries and the government.

Also Read: Won't sign new gas pact sans govt nod: Fertilizer union

He said the alleged collusion is incorrect and he will continue to prove that and once he proves it, there is no merit for the court to get into the gas price fixation or any form of economic policy. To lend weight to his argument, the additional Solicitor General read out several clauses of many acts on this.

The Solicitor General Mahon Parasaran finished his argument by lunch time, once again trying to present a case that there is no form of collusion. The gas price hike is good for the country as it will increase energy security. There will be surety of gas because the E&P activity will go up and there will be incentive for companies to come to the country and carry out exploration activities.

In another significant development, the SC bench allowed government to rely and have Joint Secretary of Exploration from the oil ministry Giridhar Aramane for talking to the SC bench if there is technical aspect of the production sharing contract and the KG-D6. The next hearing will now be on April 9.

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In-principle nod to IDFC, Bandhan for bank licences: RBI

The Reserve Bank of India (RBI) has given in-principle approval to IDFC and IDFC and Bandhan Financial Services for new bank licences.

IDFC  and Bandhan Financial Services have emerged winners among a list of 25 hopefuls, with the RBI giving the two NBFCs in-principle nod for a bank licence.

A day after the Election Commission permitted it to go ahead with the issue of new banking licences, the Reserve Bank of India gave in-principle approval to infrastructure finance company IDFC and Kolkata-based microfinance firm Bandhan to comply with the requirements of a fledged bank in 18 months.

The RBI originally received 27 applications in July 2013, after which Tata Sons and Videocon Group withdrew, leaving 25 contenders in the fray.

Besides India Post, the other applicants included state-run IFCI and private sector Anil Ambani group and Aditya Birla group, Bajaj Finance, Muthoot Finance, Religare Enterprises and Shriram Capital.

With regard to the application of the Department of Posts, the RBI accepted the recommendation of the high-level screening committee to take further action in consultation with the government.

At present, there are 27 public sector banks and 22 private sector banks in the country.

The RBI has issued bank licences after a gap of a decade. It last awarded licences to Kotak Mahindra Bank and Yes Bank in 2003-04.

(With inputs from PTI)

IDFC stock price

On April 02, 2014, IDFC closed at Rs 128.00, up Rs 4.90, or 3.98 percent. The 52-week high of the share was Rs 165.45 and the 52-week low was Rs 76.25.

The company's trailing 12-month (TTM) EPS was at Rs 12.79 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 10.01. The latest book value of the company is Rs 88.76 per share. At current value, the price-to-book value of the company is 1.44.

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Sugar prices unlikely to rise despite El Nino risk: Sakthi

In an interview to CNBC-TV18, M Manickam, Executive VC,  Sakthi Sugars said sugar prices are unlikely to go up despite the threat of El Nino. Weather forecasters have said India should brace for a weak monsoon season as El Nino conditions are likely to develop, but before rains dry up, the ongoing wet spell will continue until June.

Meanhwhile, India Ratings has revised its outlook for the sugar sector from negative to 'negative-to-stable' on improvement in the credit profiles of millers based in South India from FY14 levels. It, however, says that UP-based mills may continue to struggle with higher leverage.

"For UP based mills, we could see that the profitability may not see as much of an improvement if we assume that 15-16 cents per pound prices prevail," Janhavi Prabhu, Senior Analyst, India Ratings told the channel.

Below is the transcript of Janhavi Prabhu and M Manickam's interview to CNBC-TV18's Ekta Batra and Sumaira Abidi.

Reema: There are reports that El Nino could favour the sugar sector. If that happens, we could see a production cut, which would result in sugar prices going up. Could you give us your thoughts on the same and the impact El Nino will have on the industry prices as well as production?

Manickam: Assuming that El Nino is on track, and the Indian monsoon gets affected, then we have to look at production cut. We have a lot of stock in hand. We may not have a crisis.

Sumaira: How much of a rise do you think we could see in sugar prices in that case? Is there any sort of a ballpark figure that you guys are working with?

Manickam: Our breakeven is about Rs 34, which I have been maintaining for long time. At current cane prices, our breakeven is Rs 34. We definitely need Rs 34. How much further it is going to go? I don't know because the world is oversupplied and there is enough stock in the country. I don't think it is running away.

Reema: What could be the extent of production cut that you anticipate as things stand now and how would the demand supply then stand at?

Manickam: Right now we have got Maharashtra and Karnataka supporting production quite a bit. What we expect is if there is a failure of monsoon then you could see drop in production maybe 1-1.5 million tonne.

Sumaira: You have recently upgraded your FY15 outlook for the sugar sector from negative to 'negative to stable' that you had earlier. What is this predicated on and how much of an impact are you sensing from the El Nino impact on the sugar sector?

Prabhu: The reason that we have upgraded our view on the sector to negative to stable from negative is because we sensed that southern-based mills are going to see an improvement in the overall operating profitability, especially in the sugar segment, which will see profitability in the range of 60 paisa to Re 1. This is considering the fact that for global sugar year 2014, we are seeing that the supply and the production—the global surplus is going to be in the range of around 5 million metric tonnes.

For the next year, which is sugar season 2015, because when we are looking at 2014 we are looking at typically two seasons to play with. So, in the second season of sugar season 2015 we could see that this global surplus is going to come down significantly and we also have industry sources which indicate that and because of which this is expected to provide support to international sugar prices in the range of 15-16 cents.

If you are looking at 15-16 cents of international sugar prices minimum for sugar season 2014 then in that case you could see that considering the cost of production as indicated for most Maharashtra based mills which could be around Rs 30-31 you could see an improvement in the overall profitability over there. However, as regards UP is concerned, we have assumed that the difference between the Fair and Remunerative Price (FRP) as well as the UP state advisory price (SAP) prices would continue to remain in the 33 percent range.

For UP based mills, we could see that the profitability may not see as much of an improvement if we assume that 15-16 cents per pound prices prevail. However, if there is an El Nino and the surplus contracts significantly then we could see a sugar price rallying of higher than this price. However, if you are looking at a price above 19 cents per pound internationally then that is when it would benefit the Indian sugar companies.

Reema: Janhavi has said, according to their study, South India-based mills will turn profitable in FY15, by say half to Re 1 per kilogram in FY15. Do you think it is likely?

Manickam: We will see the profitability coming back because I see the prices going above Rs 34. So, we will be profitable in FY15 from what it looks like.

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Airtel signs five-year deal with IBM for IT infrastructure

Airtel and IBM have partnerships for IT infrastructure and services across Airtel's international operations spanning 19 countries, including Africa, Sri Lanka and Bangladesh.

Bharti Airtel  has extended a contract with IBM to manage its IT infrastructure and application services in the country for five years, scaling down the deal with the US company as it embarks on the next phase of growth.

Airtel said it will build in-house capabilities and indicated that it might bring in more partners for its IT needs.

"As part of the new vision, Airtel is also building in-house capabilities and a strong partner eco-system, and has selected IBM to manage the IT infrastructure and applications for its operations in India," the company said in a statement.

Also read:  Airtel, Safaricom get conditional nod to buy yuMobile

IBM managed all of Airtel's information technology services for the past 10 years and the contract has now been restructured and extended for five years.

The earlier agreement was based on revenue sharing and was worth USD 2 billion but now, sources said, the value of the deal is USD 500-USD 550 million. The company refused to comment on financial details of the accord.

"As we embark on the next phase of Airtel's growth journey, I am confident that the agreement with IBM will help us offer innovative and cutting edge products and services to our customers," Bharti Airtel Managing Director and Chief Executive Officer (India and South Asia) Gopal Vittal said.

According to the statement, the new model offers Airtel greater flexibility to scale services and adapt in real-time to changing market dynamics.

"IBM's global expertise to manage large infrastructure operations and application management, coupled with the new IT capabilities we are developing in-house, is the latest milestone in our strategy to build a world-class IT services platform," Airtel Chief Information Officer Harmeen Mehta said.

Airtel and IBM have partnerships for IT infrastructure and services across Airtel's international operations spanning 19 countries, including Africa, Sri Lanka and Bangladesh.

Bharti Airtel stock price

On April 02, 2014, Bharti Airtel closed at Rs 326.10, up Rs 10.55, or 3.34 percent. The 52-week high of the share was Rs 373.50 and the 52-week low was Rs 266.95.

The company's trailing 12-month (TTM) EPS was at Rs 14.07 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 23.18. The latest book value of the company is Rs 135.70 per share. At current value, the price-to-book value of the company is 2.40.

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SC withdraws Spigelman as arbitrator in RIL-Centre dispute

Justice SS Nijjar, who had appointed Spigelman, agreed to withdraw his name after the Centre contended that the name of ex-Chief Justice of New South Wales was mentioned in the list of names proposed by the Reliance group for appointment as AN independent arbitrator.

The Supreme Court today withdrew the name of James Spigelman, ex-Chief Justice & LG of New South Wales, Australia, who was appointed by it as third arbitrator to resolve the dispute between Centre and  RIL on KG basin.

Justice SS Nijjar, who had appointed Spigelman, agreed to withdraw his name after the Centre contended that the name of ex-Chief Justice of New South Wales was mentioned in the list of names proposed by the Reliance group for appointment as an independent arbitrator.

The apex court had on March 31 named Spigelman as the third Arbitrator who shall act as the Chairman of the Arbitral Tribunal whose two other members are former Chief Justices of India - SP Bharucha and VN Khare.

While Mukesh Ambani-led RIL has nominated former Justice Bharucha as its arbitrator, the Centre chose Justice Khare as its nominee. Justice Nijjar had said that both, the Centre and RIL provided the list of eminent foreign arbitrators but he preferred to do his own survey for maintaining neutrality and chose the name of Justice Spigelman.

"Although two lists have been duly supplied by the learned counsel for the parties, I am of the opinion, in the peculiar facts and circumstances of this case, it would be appropriate if an individual not named by any of the parties is appointed as the third arbitrator. I have discretely conducted a survey to find a suitable third arbitrator who is not a National of any of the parties involved in the dispute," he had said.

Reliance stock price

On April 02, 2014, Reliance Industries closed at Rs 956.95, up Rs 15.80, or 1.68 percent. The 52-week high of the share was Rs 959.80 and the 52-week low was Rs 765.00.

The company's trailing 12-month (TTM) EPS was at Rs 67.89 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 14.1. The latest book value of the company is Rs 556.94 per share. At current value, the price-to-book value of the company is 1.72.

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To start working on biz recast as early as April 3: IDFC

IDFC Chairman Rajiv Lall said that their goal is to build a 'universal banking franchise'.

The Reserve Bank of India has granted an in-principle nod for banking licence to IDFC .

The "in-principle" approval will be valid for a period of 18 months during which the applicant has to comply with the requirements under the RBI guidelines.

Welcoming the news, IDFC Chairman Rajiv Lall said that their goal is to build a 'universal banking franchise'. He expects the company to comply with all RBI conditions.

Speaking to CNBC-TV18, Lall said IDFC already has 21 percent Tier-1 capital and he believes it 'will be the best capitalised start-up bank in India'. IDFC has 18 months to start banking operations.

Elated by the news, Lall hopes to start working on the business restructuring as early as April 3. The company has already prepared a detailed financial plan to kick start operations and wants to 'get ready with branch network'.

Lall said though the company is looking at organic growth entirely for the banking franchise, yet it would be premature to speak of its business model currently. He sees the lack of branches as an opportunity and not a constraint.

IDFC stock price

On April 02, 2014, IDFC closed at Rs 128.00, up Rs 4.90, or 3.98 percent. The 52-week high of the share was Rs 165.45 and the 52-week low was Rs 76.25.

The company's trailing 12-month (TTM) EPS was at Rs 12.79 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 10.01. The latest book value of the company is Rs 88.76 per share. At current value, the price-to-book value of the company is 1.44.

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