Gold to shine further on global risk factors -:- Equity Research

Gold prices are likely to stay firm in the range of Rs 30,500-Rs 33,500 per 10 grams in the backdrop of global political and financial risks, says a study by industry body Assocham. The prices are currently ruling at Rs 31,000-31,500 (24 carat purity) in major Indian cities, even as festive demand seems to be picking up, it said. In the backdrop of continuous global political and financial risks coupled with revival in demand in the domestic market, gold prices are likely to stay firm in the range of Rs 30,500 -33,500 per 10 grams despite the yellow metal having had a golden run up of about 25 per cent since January this year, an Assocham paper said. "Going forward, the festive demand will get a further push from the wedding season, which is the main contributor to gold consumption in India. "The upside in the short term of a few months is seen between Rs 1,500-2,000 while the downside could be limited to Rs 1,000-2,000 per 10 grams," it said. While India has been among the two biggest consumers of gold in the world along with China with imports in the past going even up to 1,000 tonnes per annum, inflows this year have been quite low. As per the paper, gold imports between January and September aggregated 270 tonnes this year against 658 tonnes in the corresponding period of last calendar year. Assocham Secretary General D S Rawat said gold is finding strong support levels in the international markets and is expected to stay above USD 1,200 mark, as a starting point for the next possible rally. "All in all, given the state of play in equity, debt and properties, gold would stand out for quite some time," he said. The paper further said that the outlook for the precious metal remains upbeat taking into consideration several factors including reduced pace of the US Fed rate hikes, increased adoption of negative interest rates most recently in Japan , increased inflows in gold ETFs and decline in gold production.

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Deutsche Bank's Asia Pacific wealth mgmt head joining UBS-:- Equity Research

Deutsche Bank's Asia Pacific wealth management head Ravi Raju is leaving to join UBS, a source with direct knowledge of the move told Reuters on Tuesday, the latest senior departure from the bank in the region. The German bank later confirmed Raju's exit in a statement, adding its head of wealth management in North Asia Lok Yim would succeed him with immediate effect. It said Raju was leaving to pursue external opportunities, but gave no further details. It was not immediately clear what Raju's role would be at Swiss bank UBS, where he is expected to start in a few months, the source, who declined to be named, added. Raju, who joined Deutsche in 2007, played a key role in building its wealth management business in Asia, overseeing more than 700 employees in 15 locations. The region has emerged as a battleground for wealth managers as Western markets slow. His departure, the second by a high-profile Deutsche banker in Asia in the last few months, comes as Germany's biggest lender is battling to contain the damage from a US demand for a USD14 billion settlement over the sale of toxic mortgage bonds before the financial crisis. Concerns over Deutsche Bank have also shaken global markets. In June, Gunit Chadha, who joined Deutsche Bank as India CEO in 2003 and became a co-head for Asia Pacific in 2012, quit as regional head and was replaced a month later by the head of its global transaction banking, Werner Steinmueller. A UBS spokeswoman in Asia, and Hong Kong-based Raju declined to comment when contacted by Reuters.

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IIP falls 0.7% in Aug, but hope floats on festival, rain & hikes -:- Equity Research

India’s factory output fell (-)0.7 percent in August, the second successive monthly decline, but revival hopes floated on festive season sales, pay hike for government employees and greater rural spending on the back of good summer rains. Data released on Monday showed factory output growth has recovered marginally from an eight-month low of 2.4 percent in July, but only just, suggesting uneven recovery in the broader economy. The `manufacturing’ sector, which represents more than 75 percent of the index of industrial production (IIP), contracted -0.3 percent in August from -3.5 percent in the previous month. Mining production growth slumped (-)5.6 percent, pulled down primarily by fall in coal (-9.2 percent) and crude oil (-3.9 percent) output. Moreover, capital goods output, a metric to gauge capacity additions by companies, have contracted for 10 successive months mirroring faltering investment activity. It fell 22.2 percent in August from 29.5 percent in July. A pick up in festive season buying, which usually peaks between October to December, may not immediately result in greater investment because of idle capacities and large unsold stock. Banks have started reducing lending rates following last week’s 25 basis point cut in RBI’s repo rate—the rate at which the central bank lends to commercial banks. This should reduce companies’ cost of capital. India’s economy grew 7.1% during April to June, the slowest in 6 quarters, but analysts, policymakers and the RBI expects a revival in the coming months boosted by good rains, a pay bonanza for government employees and festive season buying. Consumer durables output grew 6.3 percent in August from 5.9 percent. It is expected to gather pace in between October to December reflecint greater household spending on goods such as cars, televisions and refrigerators.

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Ashok Leyland to set up Rs 500 crore unit in Telangana -:- Equity Research

Commercial vehicle maker Ashok Leyland today entered into an agreement with the Telangana government for setting up a 'body building unit' in the state with an investment of Rs 500 crore. The unit, to be established in phases with an investment of Rs 500 crore, would provide employment to 1,000 people directly and hundreds of others indirectly, a release from the Chief Minister's Office said. An MoU to this effect was exchanged by Chief Minister K Chandrasekhar Rao's Additional Principal Secretary Santhi Kumari and Ashok Leyland MD Vinod K Dasari, it said. Location of the proposed facility was not mentioned in the release. Speaking on the occasion, Rao said his government would extend all cooperation for the growth of manufacturing sector in the newly formed state. The government has brought out its industrial policy (TS-iPASS) to grant all necessary licences in 15 days to set up a unit, he said. The Chief Minister said the transport sector would continue to grow in the State, the release added.

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Encounter in EDI building in Pampore-:- Equity Research

A soldier was today injured in the exchange of fire between security forces and militants holed up inside a government building in Pampore area of Kashmir which had witnessed a suicide attack in February this year. Two to three militants are believed to have entered into the building of Entrepreneurship Development Institute (EDI) in the wee hours today. "One soldier has been injured in the exchange of fire with militants holed up inside the building at Pampore," a defence spokesman said here. He said further details were awaiting as the operation was in progress to flush out the militants. A building within the premises had caught fire this morning, a police official said. Fire tenders were rushed to the spot, but they were not allowed to enter the building due to security reasons, the official said. Militants had targeted the EDI building in February this year as well. Two soldiers, including an officer, a civilian employee of the Institute and three militants were killed in that operation that lasted 48 hours.

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PNB makes home, auto loans attractive for govt staff-:- Equity Research

To cash in on the 7th Pay Commission payout to government employees, state-owned Punjab National Bank (PNB) is offering them home and auto loans at attractive rates of 9.3-9.8 per cent beginning this month. Besides, the bank said it will offer loans to these segments without any processing or upfront fee and no documentation charges will be levied on them. The rate of interest is with effect from October 1, 2016. The Delhi-based state lender said the objective of the drive -- christened as 'PNB Pride' -- is to "ensure availability of housing and vehicle loan at attractive rates and ensure a house and a car for all government employees". For housing loan, the floating interest rate has been fixed at marginal cost of lending rate (MCLR) for one year at 9.3 per cent. For those availing the housing loan on a fixed rate basis, it will be a floating one of interest plus 0.50 per cent (i.e, 9.8 per cent). For car loan, customers will be charged MCLR of one year plus 0.25 per cent (9.55 per cent) on a floating basis. As for fixed interest rate with a reset clause of 3 years, it will be MCLR of one year plus 0.25 per cent, or 9.55 per cent. Permanent employees of central and state governments, defence personnel and paramilitary forces will be able to avail of the benefits of lower rates under the PNB Pride scheme. All other terms and conditions of the existing housing and car loan scheme will be applicable to the borrowers, PNB said.

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Govt issues demand notes to 7 telcos for spectrum purchase-:- Equity Research

Government today issued demand notes to seven telecom operators to make payment in 10 days for the spectrum they bought in the just-concluded auction. In the five-day spectrum auction that concluded last week, seven telecom companies made commitments of Rs 65,789 crore for buying 964.80 MHz of spectrum in various frequency bands. "The demand note for payment has been issued to all successful bidders via email today evening," sources told PTI. As per the NIA or the bid document, the operators will have 10 days from the date of issue of demand note to make the payment for successful bid amount. Accordingly, they would have to make the payment by October 20. Bids were received for 964.80 MHz of spectrum out of 2,354.55 MHz across seven bands put on offer. Even at the end of the auction, nearly 60 per cent of the spectrum remained unsold, including the expensive 700MHz band, which found no takers. UK-based Vodafone's India unit was the most aggressive, taking home Rs 20,279 crore worth of spectrum. Bharti Airtel, the nation's biggest telecom company, bought Rs 14,244 crore worth of spectrum, while Idea Cellular put in Rs 12,798 crore of bids. Newcomer Reliance Jio spent Rs 13,672 crore on spectrum buying. Other operators who bought spectrum included Tata Teleservices (about Rs 4619 crore), RCom (about Rs 65 crore) and Aircel (Rs 111 crore).

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Dubai begins building 'world's tallest' tower1 -:- Equity Research

Dubai began construction work today on a tower that will stand higher than its Burj Khalifa, which is currently the world's tallest skyscraper. The Gulf emirate's ruler, Sheikh Mohammed bin Rashid al-Maktoum, marked the groundbreaking of The Tower at Dubai Creek Harbour as construction workers laid foundations for the skyscraper at a vast patch of sand. The structure "will be the world's tallest tower when completed in 2020," said a statement issued at the ceremony. Dubai's developer giant Emaar Properties announced plans to build the viewing tower in April, saying it will be "a notch" higher than Burj Khalifa, which stands 828 metres (2,700 feet) high. Emaar has not revealed the exact final height of the tower. It said in April that the structure will cost around USD 1 billion. Designed by Spanish-Swiss architect Santiago Calatrava Valls, the tower will have observation decks providing 360-degree views of the coastal city. Emaar Chairman Mohamed Alabbar said the tower will completed before the Expo 2020 trade fair which Dubai is preparing to host. In April, Emaar said the tower will be slender, evoking the image of a minaret, and will be anchored to the ground with sturdy cables. Dubai has established a reputation for building dozens of futuristic skyscrapers, which have transformed its skyline. Saudi Arabia's Kingdom Holding is building a tower in Jeddah that is planned to surpass the Burj Khalifa, rising more than a kilometre.

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Passenger vehicle sales in India set to cross 3 mn mark in FY17-:- Equity Research

Passenger vehicle sales in India are poised to cross the three million units milestone this fiscal as new models and compact SUVs serve pent up demand from customers with better disposable incomes in both urban and rural areas. Already, in the first six months of the fiscal, passenger vehicle (PV) segment has already witnessed a growth of 12.34 per cent at 14,94,039 units. In the last fiscal, 27,89,678 passenger vehicles were sold in the domestic market. "The way it has been so far in the current fiscal, I expect the passenger vehicles segment to touch 3 million mark. If sales grow as they have grown in the April-September period then we can see this happen," SIAM Deputy Director General Sugato Sen told PTI. Expressing similar optimism, Abdul Majeed, Partner - Price Waterhouse and an auto expert said many favourable factors are pushing passenger vehicles sales in India towards that direction. "We should cross 3 million vehicles (mark). The positive factors essentially include better cash flows in the hands of both urban and rural customers," he said. Majeed further said: "In addition pent up demand and new launches push customers to buy new vehicles, cab aggregators will also generate demand since they are expanding to more number of cities." Overall, industry observers have pegged India to overtake Germany this year as the world's fourth largest automotive market after China, US and Japan. In 2015, China was the leading passenger vehicle market with 21 million units followed by the US at 7.5 million units, Japan stood at third place with 4 million units, followed by Germany at around 3 million vehicles. India stood at fifth position with 2.7 million vehicles followed closely by the UK at 2.6 million units, Majeed said. During the April-September period, utility vehicles segment sales have grown by 40.24 per cent at 3,73,504 units compared to 2,66,339 units in the same period of 2015-16. Car sales on the other grew by 5.11 per cent 10,26,526 units in the April-September period as against 9,76,586 units in the ame period of previous fiscal. Last month domestic passenger vehicle sales grew at 19.92 per cent, touching highest volumes in over four-and-a-half years, led by record sales in the utility vehicles segment. According to the data released by the Society of Indian Automobile Manufacturers (SIAM), PV sales in September stood at 2,78,428 units as against 2,32,170 units in the same month last year.

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'Rs 1,000 cr-Rs 2,500 cr loss each year due to Cauvery crisis'-:- Equity Research

Farmers of the Cauvery delta region today told the Supreme Court-constituted high-level technical committee that they were incurring a loss of around Rs 1,000 crore to Rs 2,500 crore each year due to the Cauvery dispute between Karnataka and Tamil Nadu. The team was formed by the Supreme Court to assess the situation in the Cauvery basin in both the states. The 14-member committee has been in the state since yesterday following its two-day trip to Karnataka. The team, headed by GS Jha, Chairman, Central Water Commission (CWC),visited Karunkanni, Killukudi and Kilvelur villages in the district today. Nagapattinam District Collector S Pazhanisamy and other officials accompanied the team. Farmers showed the team members dry paddy fields and withered crops and explained the need for Karnataka to immediately release more water for their requirements. Jha later told reporters at Karunkanni that the committee would submit a report on the ground realities to the Supreme Court before October 17. Arupathy Kalyanam, general secretary of the Federation of Farmers' Associations of the delta districts, submitted a memorandum to the committee. He said though Mettur Dam was opened for irrigation on September 20, most of the tail-end areas had not received water yet. "As a result, farmers are not able to irrigate even the direct-sown paddy fields," he said. Stating that normally, samba cultivation is completed before the end of September every year, he alleged that for the past three decades, Karnataka had taken "complete control" of the Cauvery flows. During most years, the delta areas did not receive adequate water from Karnataka, resulting in samba cultivation being postponed to October-November. So, when the northeast monsoon becomes severe, paddy crops face inundation in about four lakh acres, Kalyanam said. "Due to this crisis, the delta farmers have been incurring a financial loss of around Rs 1,000 crore to Rs 2,500 crore every year," he said in the memorandum. Kalyanam said this year, around 4.25 lakh acres of direct-sown paddy fields in Thanjavur, Nagapattinam and Tiruvarur districts were affected as Karnataka had refused to release adequate water. In addition, samba transplantation has been completed in 40,000 acres and the crops'were awaiting adequate water flows, said Kalyanam. Yesterday, the team had inspected Mettur Dam, located about 150 km from Coimbatore. It had taken stock of the situation, including the water level, inflow and discharge of Mettur Dam.

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Cairn oil and gas output drops 4% in Q2-:- Equity Research

Cairn India today reported a 4 percent drop in its oil and gas production during the second quarter ended September 30 after eastern offshore Ravva field output dipped by more than a quarter. Daily production of oil and gas in July-September averaged 2,06,230 barrels per day, down 3.7 percent from 2,14,247 barrels of oil and oil equivalent gas in the same period a year ago, the company said in a statement here. Its mainstay Rajasthan block output was marginally lower at 1,67,699 barrels of oil and oil equivalent gas in the second quarter as compared to 168,126 boepd a year ago. Krishna Godavari basin Ravva oil and gas field saw output dip 28 percent to 18,823 barrels of oil equivalent per day (boepd) while its Cambay block production was down 11.5 percent at 9,877 boepd. While Rajasthan production was flat as compared to output in the first quarter of 2016-17 fiscal, Ravva and Cambay output was down 4 percent quarter-on-quarter. Cairn, which is being absorbed by its parent Vedanta Ltd, has three producing oil and gas assets -- Rajasthan block, Cambay block off the Gujarat coast and Ravva in Bay of Bengal. It said Ravva and Cambay have delivered stable performance with combined gross production of 28,700 boepd, lower by 4.1 percent q-o-q. "Ravva witnessed softening of production with volumes averaging at 18,823 boepd. Efforts continued to sustain production rates by targeting incremental opportunities such as optimization of gas lifted wells, addition of new zones, network optimisation and water shutoff by zone isolations, which aided in arresting the natural decline rates," it said. Production from Cambay was at 9,877 boepd as effective reservoir management practices and production optimization measures helped in reducing the impact of natural decline, the company said. Cairn said a strong performance by enhanced oil recovery (EOR) scheme at Mangala - the largest oilfield in the Rajasthan block, helped in maintaining production from Rajasthan. Also, production optimisation and maximisation of liquid handling capacity helped maintain strong performance from Bhagyam and Aishwariya - the other big fields in the Rajasthan block, the company said. "Continued reservoir management practices and targeting incremental opportunities helped in sustaining production rates at Ravva and Cambay," it said. For April-September, average production was down to 2,06,342 boepd as compared to 2,16,081 boepd in the same period in the previous financial year. Rajasthan output fell 1.7 percent to 1,67,323 boepd while Ravva production was down 29.5 percent to 19,228 boepd.

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Vedanta Q2 metal production hit due to snags, power outages-:- Equity Research

Mining conglomerate Vedanta today said its production of zinc, copper and aluminium was affected during the July-September quarter due to reasons such as power outages, technical snags among others. Despite the hurdles, the firm led by billionaire Anil Agrawal posted a record aluminium production of 2.96 lakh tonnes during the September quarter and saw its power sales rise year-on-year (y-o-y) helped by commissioning of additional units at TSPL and BALCO over the last year. The company said copper production from Tuticorin smelter was 97,000 tonnes, marginally lower q-o-q. "During the quarter, production was affected by an unplanned outage for ten days due to a boiler leakage at the smelter," it added. In the aluminium segment, Vedanta said commissioning of pots at first line of the 1.25 million tonnes per annum (MTPA) Jharsuguda-II aluminium smelter was completed at the end of July 2016. "However, it was impacted by a power outage in early August, following which 168 pots were taken out of production. The impacted pots are currently being rectified, and 10 pots have re-started in early October 2016," it added. Similarly its Balco facility too faced issues during the quarter. "BALCO-II smelter was commissioned, with all 336 pots operational in August. However, there was a technical issue in early September, due to which 167 pots were taken out of production. Rectification work is in progress and these pots are expected to be re-started by Q4 2016-17," Vedanta said. In Zinc, the firm's mines metal production increased primarily due to significantly higher production at Rampura Agucha open cast mine compared to Q1, when there was high waste excavation, in accordance with the waste-ore sequence. However, it said: "Refined zinc and lead volumes during the quarter were lower y-o-y and higher q-o-q, in line with the mined metal production,." Commenting on the firm's performance, Vedanta Ltd CEO Tom Albanese said the firm delivered a strong operational performance during the June quarter. "We have progressed on our  ramp-up of aluminium and though we had some operational challenges, our full year volumes are not expected to be materially impacted," he added. Vedanta achieved higher mined metal production at Zinc India and this upward trend is expected to continue in the second half, Albanese noted. "We are extremely pleased that shareholders have approved the proposed Vedanta Ltd, Cairn India merger last month, and we expect the transaction to complete in the first quarter of calendar year 2017. This is an important strategic step in simplifying the Group," he said.

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Tata Motors' global sales up 5% to over 1 lakh units in Sept-:- Equity Research

Tata Motors today reported 5.35 percent increase in global sales at 1,02,289 units, including that of Jaguar Land Rover (JLR) vehicles, for September. It had sold 97,102 units in September 2015, Tata Motors said in a BSE filing. In the passenger vehicles category, global sales stood at 67,895 units last month as against 63,334 units during the same period a year ago, up 7.2 percent. Sales of luxury brand Jaguar Land Rover were up 3.6 percent to 52,914 vehicles units in September compared with 51,074 units in the same month last year. Sales of commercial vehicles were at 34,394 units as against 33,768 units in the year-ago month, a growth of 1.85 percent.

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'China for mechanism with India to share Brahmaputra waters'-:- Equity Research

Refuting reports of China joining water wars between India and Pakistan by blocking a tributary of Brahmaputra river, Chinese official media today said that Beijing is ready for a joint multilateral cooperation mechanism with India and Bangladesh to share the waters. Relations between China and India should not be affected by "imaginary water war", an article in the state-run Global Times said, adding that Beijing is unlikely to use Brahmaputra river water as a potential weapon. The article said China is willing to have multilateral cooperation with India and Bangladesh to share the waters. The proposal is significant as China has no water treaty with India to share the river waters. "It is easy to understand the anger of Indian people as they read recent news reports saying China had blocked a tributary of the Brahmaputra river, which is a trans-boundary river flowing from Southwest China's Tibet Autonomous Region into the northeastern Indian state of Assam and later into Bangladesh, serving as an important water source for the regions," it said. "The move by China to temporarily blockade the tributary to construct a dam sparked widespread concerns in India, but people in the downstream country may be ignoring one thing," it said, adding that the reservoir capacity of the dam on the Xiabuqu river, a tributary of the Brahmaputra, is less than 0.02 per cent of the average annual runoff of the Brahmaputra. "Frankly, there is no need for India to overreact to such projects, which aim to help with reasonable development and utilisation of water resources," it said. However, what is worrying is that some local Indian media outlets linked the blockage with India's recent water dispute with Pakistan, trying to create the false impression that China may be interested in taking part in the "so-called water war between the two South Asian countries to give Pakistan silent support," the article stated adding "However, construction of the dam project on the tributary of the Brahmaputra started in June 2014," it added. "It is clear the blockade to construct the dam does not target India, and relevant countries should not read too much into the move," the write-up maintained. While it is understandable that India is sensitive to China's water exploitation on the Brahmaputra as a downstream country, "China is unlikely to use the waters of the river as a potential weapon," it said.

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Gold demand up on price drop;discounts in India at multi-mth low-:- Equity Research

Demand for gold in Asia edged up this week as prices hovered near their lowest since early June, while discounts in India narrowed the most in 8-1/2 months as a fall in prices prompted buying during the festive season. Gold is on track for its second straight weekly loss, down nearly 5 percent. Gold prices could pull back to as low as USD 1,200 an ounce after breaking out of their 2016 uptrend this week, according to analysts who study past price patterns to determine future direction. "Individuals as well as business were picking up physical gold, as they see this pullback as an opportunity," said Brian Lan, managing director at Singapore-based gold dealer GoldSilver Central. "There were lot of shorts triggered and people were shopping in the market because of the fall below key psychological 1,300 level." Dealers were offering discounts of USD 4 an ounce over official domestic prices this week, the lowest since the week ended Jan. 23. Last week, the discounts were at USD 10. "In the last few days we have seen good retail demand. For consumers 30,000 rupees (per 10 grams) is a psychological level. They are buying since prices have fallen below this level," said Harshad Ajmera, proprietor, JJ Gold House, a wholesaler in the eastern India city of Kolkata. Earlier in the day, gold prices in India touched 29,657 rupees per 10 grams. It had dropped to 29,550 rupees in the previous session, the lowest level since June 8. Demand for gold usually strengthens in the last quarter as India, the world's second-biggest consumer, gears up for the wedding season as well as festivals such as Diwali and Dussehra, when buying the precious metal is considered auspicious. Due to the narrowing discounts, it has been becoming viable for banks and refiners to do business, said a Mumbai-based bullion dealer with a private bank. The country's gold imports in September fell 43 percent from a year ago to 30 tonnes, provisional data from consultancy GFMS showed. Top-consumer China is closed for the week-long National Day holidays,  and traders foresee a good demand once they resume trading on Monday, given the lower prices. Singapore saw a big pick-up in gold demand of about 30 to 40 percent, traders said, adding that prices were at a premium of 50-60 cents. Premiums in Hong Kong were quoted around 60 cents to USD 1 an ounce, while prices in Tokyo were at a premium of 25 cents.

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Prefer KEC International, says Gaurang Shah-:- Equity Research

Gaurang Shah of Geojit BNP Paribas told CNBC-TV18, "Firstly, the Railway Budget and Union Budget clubbed together but it will be somewhere in January 2017, the date is not yet out possibly by end of January is what one expects, both the budget to be out to club together. Secondly, Titagarh Wagons has done some acquisitions in the overseas market as well and historically speaking fertiliser, urea and railway related stocks are only hogging the limelight near about this budget time or railway budget time, now both of them together of course." "If one wants to make a switch from a long term point of view, I would advise to make a switch in KEC International on which we have a positive coverage and we believe that this long term view is much better than a short term view," he added.

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Electronics is the most popular category this festive season-:- Equity Research

The much-awaited e-commerce sales have just concluded, and initial reports suggest an increase of about 40-50 percent over last year’s sales for the major players. More than 50 percent of the spending happened on electronics and home appliances this year, leaving behind other categories like fashion, lifestyle, books, home décor and furniture. Rapid changes in technology, stiff competition between brands and online deals this season have made gadgets the most popular, with many who were baited to replace their old phones, tablets, laptops and televisions. And this is just the first wave of the season, with gifting, and offline sales that have not even taken off as yet. Better Consumer Sentiment At a macro level, there are several reasons why we have seen a jump in spending. Discretionary incomes have gone up with higher salaries and pensions being disbursed under the Seventh Pay Commission. The repo rate cut is also bound to affect interest rates that have led to higher sales. Demand has gone up in the rural market and tier II and III towns due to the good monsoon this year, giving people the purchasing power to upgrade to smartphones for the first time ever. Better infrastructure and connectivity in these areas has also led to higher consumer interest in technology products. E-tailers also give access to brands and models that may not be available at one’s local electronics store. High Visibility Commanding the highest share of voice, electronic products are the most visible with everyone contributing to the noise – brands, e-tailers, store chains, banks, warranty and insurance providers all investing heavily in marketing during September and October. Most big product launches also happen now, with major companies in this sector looking at 30-40 percent growth in their sales during this period. Electronic products and home appliances still take the highest share of a shopper’s wallet. However, over 90 percent of consumers still fail to buy an extended warranty or damage protection plan. Device failure rates have crossed more than 50% in India, and repairs today cost up to as much as the price of a new device. Further, gadgets and appliances usually come with a year of manufacturer’s warranty that does not cover accidental, physical or liquid damages. If you plan to buy a gadget or a home appliance this year, don’t forget to check the coverage terms of the brand warranty. You can ask for or buy an extended warranty or damage protection plan at the e-tailer’s site, app or store, wherever you are purchasing the product from.

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India to seal border with Pak by December 2018: Rajnath Singh-:- Equity Research

India will completely seal the border with Pakistan by December, 2018 by using all effective means including technological solutions, Home Minister Rajnath Singh said here today. Speaking to media after reviewing the security situation on border with ministers and officials of four states, Singh said India is planning to seal the entire border with Pakistan by December 2018 and a proper monitoring mechanism would be in place at the central and state government levels for it. He also mooted setting up a border security grid for which suggestions have been invited from all the concerned stakeholders including the states which share border with Pakistan. "It is a new concept. We will be framing guidelines after getting suggestions from all stake holders," Singh said. The Home Minister said that the government was determined to completely seal the borders with Pakistan by December 2018 and added "this project will be periodically monitored by Home Secretary at the central level, BSF from the security forces perspective and Chief Secretaries at the state level." He said under the action plan of sealing the border, technology will also be used. "Like we have riverine and Sir Creek area in Gujarat, there we will make maximum use of technology for effective sealing of border. Singh chaired the meeting attended by Rajasthan Chief Minister Vasundhara Raje, Deputy Chief Minister of Punjab Sukhbir Singh Badal, Gujarat and Rajasthan's Home Ministers Pradeepsinh Jadeja and Gulab Chand Kataria respectively and Jammu and Kashmir Chief Secretary Brij Raj Sharma, an official said. Senior BSF officials were present at the meeting here which reviewed security arrangements on the border in the wake of tension between India and Pakistan after surgical strike by army on terror camps across the Line of Control in Jammu and Kashmir.

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Two PSU banks cut lending rate by up to 0.15%-:- Equity Research

Two public sector lenders including Oriental Bank of Commerce (OBC) today reduced lending rate by up to 0.15 percent across various maturities a few days after 0.25 percent repo rate cut by RBI. The OBC has reduced marginal cost of funds based lending rate (MCLR) by up to 0.15 percent, OBC said in a statement. Also, the 6 months lending rate has been reduced by 0.10 percent to 9.30 percent, it said. The new rates would be effective from October 10, it added. Another lender, United Bank of India, has reduced MCLR rate by 0.05 percent across all tenures with effect from October 17. Now one-year tenure loan would be available at 9.40 percent as against 9.45 percent, it said. At the same time, 6 month loans would be cheaper at 9.35 percent as compared to 9.40 percent, it added. On Tuesday, RBI lowered the repo rate or the rate at which it lends to banks by 0.25 percent. The 6-member Monetary Policy Committee, which has three members nominated by the government and the rest from the Reserve Bank, lowered repo rate to 6.25 percent from 6.50 percent.

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Flipkart records highest-ever single day sale, grosses $200mn-:- Equity Research

E-commerce firm Flipkart recorded sales worth around USD 200 million on Monday, its highest-ever single-day sale in the company's history, a spokesperson for the company has told moneycontrol.com. The sales are likely the results of a massive advertising campaign run by the company ahead of the upcoming festive season in India. As per market estimates, e-tailers such as Flipkart are expected to spend around Rs 400-Rs 500 crore in advertising during October, more than three times the usual money spent in steady state, according to research and advisory firm RedSeer Consulting. This is the third Big Billion Days sale being run by Flipkart. Analysts say e-commerce sales this season may be a make-or-break for many Indian online retail firms, especially Flipkart, which competes with US giant Amazon. In June, Amazon, Inc announced an additional investment of USD 3 billion into its Indian unit. This comes after it exhausted its investment of USD 2 billion announced in July 2014. This fresh infusion of funds comes at a time when homegrown e-commerce firms are struggling to raise money. So far, Flipkart seems to have trumped peers, at least when it comes to pricing strategy for mobile phones. According to a report by Bangalore-based research firm RedSeer, Flipkart reported lowest median prices across popular non-exclusive mobile stock keeping units listed on its platform compared to Amazon and Snapdeal on Monday. The median price for non-exclusive mobile phone stood at Rs 7,500 on Flipkart compared to Rs 7,900 and Rs 7,800 on Amazon and Snapdeal, respectively. Amazon, however, led the race when it came to consumer, electronics and large appliances segment. The same was reported to be Rs 4,050 for Amazon Rs 4,200 for Flipkart and Rs 4,300 for Snapdeal, RedSeer said. According to RedSeer, television continued to be the primary source that has created awareness about the festive sales to people. Nearly 68 percent of the total people surveyed said they were aware of the ongoing festive sales of at least one of the e-commerce firms. Of it, 64 percent said they got to know about the sales through television ads. Social media followed by making 49 percent people aware of the same, as per the RedSeer survey.

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Hardly any demand for power in country-:- Equity Research

Expressing concerns over lack of demand for power in the country, Coal Secretary Anil Swarup today wondered as to what would the government do with its ambitious 1 billion tonnes of production target for fossil fuel by 2020. "For me the serious concerns are: Number one, there is hardly any demand for power. What we will do? We are planning to produce one billion tonnes of coal by 2020. What will I do with that coal," he said. "Someone has to look into these issues. How to increase this demand of power. It is very important because today per capita consumption of energy in India is equal to per capita consumption of the US in the late 90's. If that is the pace than the demand has to go up," the Secretary said. He further stated that the government is on a sticky- wicket where it doesn't know what to do with the surplus coal. In fact, in the current financial year, there was cut down in coal production so the fossil fuel does not catch fire at the pit heads. "On 31st of March this year we had a balance of 56 million tonnes (MT) as inventory at pitheads and around 32 MT at the power plants. People ask me how do you manage this situation of surplus," Swarup said. He, however, added: "I say I would rather be in this situation then what I was a couple of years ago when everyone was running around ...to reach out coal to these power plants. I am glad we are where we are." Government's focus has now shifted to the quality of coal, he said. He also stated that the Coal Ministry was focusing on the use of technology to ensure that the pilferages declines phenomenally. "Today after initial experimentation every truck of coal India is GPS tracked. There is virtual mapping on the web and you know where the truck is. Each mine is videographed," he said. State-owned Coal India (CIL) which amounts for over 80 percent of domestic coal production is eyeing one billion tonnes of coal production by 2020.

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Ashok Leyland eyes over Rs 2,000 cr from defence biz in 5 years-:- Equity Research

Hinduja group flagship Ashok Leyland expects its defence business to log four-fold jump in revenues at over Rs 2,000 crore in next five years as it gears up to provide an entire range of mobility solutions, including missile carrying vehicles, to the armed forces. "In defence, we have got tremendous growth. We have won 13 out of the last 15 tenders..we are today a Rs 500 crore company in defence and in five years we should be well above Rs 2,000 crore," Ashok Leyland MD Vinod Dasari told PTI. The company aims to accomplish its revenue targets even as it remains entirely focused just on the mobility part, he added. "We are not going to make guns, we are not going to make ammunition. Anything in armed forces that requires movement we will move. This is an extension of our core competency. We are not going to diversify, mobility will be the focus," Dasari said. The company has moved up the value chain from just the provider of 4X4 vehicles to the army and now provides a range of solutions, including products to move large missiles. "We have gone from just making 4X4 vehicles to 6X6 and 8X6. We make bridge launchers on 10X10. We have already won tenders for that, we have 12X12 that can carry a missile," Dasari said. Ashok Leyland Defence Systems (ALDS), a division of Ashok Leyland, manufactures various products catering to all logistics requirements including troop/load carrying vehicle, light recovery vehicles, field artillery tractor and truck fire fighting, among others.

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Expect H2 biz pickup to push up steel demand by 4-5%-:- Equity Research

In a departure from the trend, August core data shows that steel output surged substantially by 17 percent. Jindal Steel and Power's management attributed the rise in steel output to coming into action of secondary units which were stalled earlier. Steel demand, however, is yet to pick up, according to the company. In the first 6 months of the year, steel demand grow by just 0.5 percent, and now with the end of monsoon business activity with pick pace in the second half which is likely to push up steel demand by 4-5 percent for the year, said Ravi Uppal, Chief Executive and Managing Director of JSPL. Uppal said that the company is consolidating its business and is looking divesting non-core assets. JSPL's core assets include steel and power.

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RInfra to sell power transmission biz to Adani for Rs 2,000 cr-:- Equity Research

Anil Ambani-led Reliance Infrastructure today signed an agreement to sell its power transmission assets to Adani Group for over Rs 2,000 crore. Reliance Infra owns two electricity transmission lines spanning Maharashtra, Gujarat, Madhya Pradesh and Karnataka and has a 74 percent stake in another in Himachal Pradesh and Punjab. "Reliance Infrastructure Ltd (RInfra) today announced the signing of a binding term sheet with Adani Transmission Ltd (ATL) for 100 percent stake sale of its transmission assets," the company said in a statement here. While the two companies did not give valuation of the deal, banking sources said the sale consideration was in excess of Rs 2,000 crore. RInfra owns the country's first 100 percent private sector transmission project Western Region System Strengthening Scheme (WRSSS) B & C projects located in the state of Maharashtra, Gujarat, Madhya Pradesh and Karnataka. It also owns 74 percent in Parbati Koldam Transmission Company Limited (PKTCL) located in Himachal Pradesh and Punjab in joint venture with Power Grid Corporation of India Ltd (PGCIL). All three transmission projects are completed and revenue generating. "The entire sale proceeds shall be utilized for debt reduction," the statement said. "The transaction is in line with the strategic plan of monetizing non-core business and focus on major growth areas like defence and EPC business." RInfra has completed monetisation of cement business and is in advanced stage of doing the same for roads and Mumbai power businesses. "The proposed Transaction is subject to due diligence, definitive documentation, applicable regulatory approvals and certain other conditions. Further announcements will be made at an appropriate stage," the statement added. SBI Capital Markets Ltd acted as financial advisors to RInfra for this transaction.

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Amtek Auto jumps 11% as Mahindra CIE in race for co's German biz -:- Equity Research

Amtek Auto shares rose more than 11 percent intraday Tuesday after sources told CNBC-TV18 that Mahindra CIE may also be interested in company's German business. Amtek Auto has also been talking to other players in the market to sell some of its stake in overseas companies, non-core assets and real estate as it is desperately looking for a buyer to pare its Rs 15,000-crore debt, according to people privy to the two companies. The management of Amtek Auto said sale of its European assets has been delayed by a month. The company expects to close the sale of German subsidiary Neumayer Tekfor by end of October. The debt-ridden auto ancillary company has been in trouble since August 2015, especially after it started posting losses in Q1FY16. Amtek has been posting losses for every quarter since then while on other side, interest cost has also been rising due to high debt. In the quarter ended June 2016, it had posted a loss of Rs 320 crore against loss of Rs 529 crore in preceding quarter while interest cost jumped to Rs 328 crore from Rs 290 crore in same period. In order to cut down huge debts, loss making Amtek Auto in last year had appointed Morgan Stanley as advisors to assist in the group’s debt reduction plan.

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RBI cuts repo rate by 25 bps to 6.25% -:- Equity Research

The Reserve Bank of India (RBI) on Tuesday cut its key lending—the repo rate—by 25 basis points to 6.25 percent, as a newly set up panel felt that inflation levels were low enough to reduce loan rates. The decision of the monetary policy committee (MPC), headed by new RBI governor Urjit Patel, will likely cheer business leaders and households as cheaper loans will aid investment and spending. The six member panel, which brainstormed over two days, unanimously agreed that inflation was unlikely to gallop past the tolerance threshold of 6 percent in the near future. The MPC expects retail inflation rates to hover around 5 percent by March 2017, the RBI said in a statement, which is well within the comfort zone. A lower repo rate—the rate at which banks borrow from RBI--would mean households may expect cheaper bank loans to buy houses and goods such as cars, which peak during the festival shopping season in October and November. The BSE Sensex rose 85 points to 28,328 mirroring the stock markets’ heightened expectations about lower rates. Since January 2015, the RBI has cut the repo rate six times. India’s retail inflation has touched a five-month low of 5.05 percent in August, triggering hopes of a rate cut. “The MPC expects that the strong improvement in sowing, along with supply management measures, will improve the food inflation outlook,” the RBI said in a statement. The drop in overall inflation rates has been primarily aided by continuous drop inflation in food inflation. The committee credited the drop in food inflation to recent efforts by the government to keep price growth in check including measures to tame prices of pulses, a common source of protein for most Indians. “Food inflation holds the key to future inflation outcomes,” the RBI statement said. “The government has announced several measures to cool food inflation pressures, especially with regard to pulses. These measures should help in moderating the momentum of food inflation in the months ahead,” it said. India’s economy grew 7.1% during April to June, the slowest in 6 quarters, but the RBI and the MPC expect a revival in the coming months boosted by good rains, a pay bonanza for government employees and festive season buying. The RBI retained its earlier growth projection of 7.6 percent for 2016-17. “The momentum of growth is expected to quicken with a normal monsoon raising agricultural growth and rural demand, as well as by the stimulus to the urban consumption spending from the pay commission’s award,” the RBI statement said. Besides, banks appear to be awash with funds and well equipped to deal with rise in loan growth demand to aid new investments. “The accommodative stance of monetary policy and comfortable liquidity conditions should support a revival of credit to the productive sectors,” the statement said. The spurt in demand could, however, potential push inflation. “The Committee took note of potential cost push pressures that may emerge, including the 7th pay commission award on house rent allowances, and the increase in minimum wages with possible spillovers through minimum support prices. The fuller play of these factors will need vigilance to prevent a generalised cost spiral from taking root,” it said. The RBI and the government have set a retail inflation target of 4 per cent for the next five years with an upper tolerance level of 6 percent and lower limit of 2 per cent.

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Canadian pension fund picks up 20% in Edelweiss ARC -:- Equity Research

North America's largest pension fund managers Caisse de depot et placement du Quebec (CDPQ) and Edelweiss Group signed a long-term agreement to invest USD 600-700 million (Rs 5,000 crore) over the next four years in stressed assets and private debt opportunities here. Under the agreement, CDPQ, which already pumped in around USD 1.5 billion in various domestic companies, will be acquiring a 20 percent stake in Edelweiss Asset Reconstruction Company, which is the largest in the space with around Rs 30,000 crore of assets under management. "Across our whole organisation, one of our top priorities is India as it has growth potential and strong fundamentals. Today, we are making an initial commitment of USD 300 million to this partnership," CDPQ president and chief executive Michael Sabia told reporters here today. "Our goal is to keep growing our relationship and to do that we are ready to invest between USD 600-700 million over the next four years. In other words, roughly double the initial commitment that we are announcing today," he added. Sabia said his fund sees two big opportunities in this partnership. "First, by expanding credit opportunities, access to credit for Indian companies and by building with Edelweiss, a large and a growing platform to take on an important work of asset reconstruction," Sabia said. Edelweiss Group chairman Rashesh Shah said: "We collectively aim to channelise Rs 12,000-14,000 crore, which includes Rs 5,000 crore from CDPQ over the next four years and investments from us and other institutional investors into the private debt and restructuring of stressed assets." He said as part of this partnership, CDPQ will be acquiring a 20 percent stake in Edelweiss ARC. But he did not disclose the value of the 20 percent equity sale to the Canadian fund. In addition to CDPQ's proposed 20 percent stake, other shareholders in Edelweiss ARC will be a Scandinavian insurance company with a 4 percent stake, 16 percent by domestic investors and the balance by the Edelweiss Group. The acquisition and shareholding are subject to approval by regulatory authorities. Sabia said CDPQ had in the past invested in Indian companies somewhere around USD 1.5 billion and is further looking at buying equity stake in more companies.

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IOC lines up Rs 18,000 cr to raise Panipat refinery capacity -:- Equity Research

Indian Oil Corporation , the nation's largest oil firm, plans to invest Rs 18,000 crore to raise capacity of its Panipat refinery in Haryana to 25 million tonnes (mt) by 2020, larger than previously planned. IOC had previously planned to raise capacity of Panipat refinery from 15 mt to 20.2 mt, but now it is looking at raising the capacity straightway to 25 mt, its Director (Refineries) Sanjiv Singh said here. "We have land at Panipat refinery site and so we are looking at going straight to 25 million tonnes," he said. "We have to look at the capacity of the pipeline, which carries crude oil from west coast to the refinery before finalising if the capacity should be expanded to 20.2 million tonnes as planned earlier or go straight to 25 million tonnes." IOC owns and operates 11 out of India's 23 refineries with a combined refining capacity of 80.7 mt per annum. Singh said the company board will shortly take up investment approval for the Panipat expansion as well as that of capacity upgrade at Koyali refinery in Gujarat and Mathura unit in Uttar Pradesh. It is looking to scale up its Koyali refinery capacity to 18 mt from 13.7 mt currently while a 3-mtpa capacity addition is planned at Mathura. "We have land at both Koyali and Mathura, so the expansion would not be a problem," he said. The IOC board had only last week approved over Rs 9,800 crore investment in expansion of its Barauni refinery in Bihar and setting up a petrochemical unit at the Panipat refinery complex. The board, in its meeting on Thursday, approved expansion of the Barauni refinery to 9 mtpa from 6 mtpa. The expansion along with downstream polypropylene unit will cost Rs 8,287 crore, Singh said. "We have three small crude distillation units at Barauni currently. We plan to pull them down and build new crude processing units. The options before us are to set up one big unit of 9 mt or two units of 6 mt and 3 mt," he said. The Barauni expansion will be completed by 2021-22. The expansion would meet rising demand in eastern India, particularly  in Bihar, Jharkhand and eastern Uttar Pradesh, he said. Also, the board accorded "in-principle" approval for implementation of Olefin recovery project along with expansion of existing naphtha cracker unit, MEG (monoethylene glycol) revamp and benzene expansion unit modifications at Panipat at an estimated cost of Rs 1,527 crore", he said. The Panipat refinery was commissioned in 1998 with a capacity of 6 mtpa. The refining capacity was doubled to 12 mtpa in 2006 and then raised to 15 mtpa in 2010. Once expanded, this will cater to fuel needs of north and western India. "We are working on raising fuel quality specifications to meet Euro-VI standards at our refineries and so, the Panipat expansion too is being reconfigured to meet the new specifications," he said.

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Bhushan Steel shareholders approve raising up to Rs 1,155 crore -:- Equity Research

Debt-laden Bhushan Steel today said its shareholders have approved the company's proposal to raise up to Rs 1,155 crore through issue of redeemable cumulative preference shares. The firms shareholders approved the special resolution at its annual general meeting held last month, it said in a regulatory filing. "... approval of the members is hereby accorded to authorise the board to create, offer, issue and allot 38,50,000 redeemable cumulative preference shares of Rs 100 each to be issued at such rate not exceeding Rs 3,000 per share (including maximum premium of Rs 2,900 per share) for an aggregate amount not exceeding Rs 1,155 crore...," it added. dividend not exceeding 12 per cent per annum and the shares shall rank for dividend in priority to the equity shares for the time being of the company, it said. "At the option of board, at any time within 10 years from the date of allotment, the said preference shares shall be redeemed at a premium not exceeding Rs 2,900 per share," Bhushan Steel said in the filing. The shareholders also approved the special resolution of reclassification of status of Sanjiv Garg and Rajiv Garg from promoters to public shareholders. This is being done "...as they are neither related to the promoters nor exercising, directly or indirectly, any control over the affairs of the company... they have no other responsibility or association with the company and they have given their consent in writing for change of status", it added.

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BHEL bags two R&M hydropower orders worth Rs 430 cr-:- Equity Research

State-owned power equipment maker BHEL has bagged two renovation and modernisation (R&M) orders of hydropower plants worth Rs 430 crore, including one from NHPC . "BHEL has secured R&M contracts of hydro electric plants (HEPs). The company has won orders worth around Rs 430 crore, for the R&M of the 6x60 MW Balimela HEP of Odisha Hydro Power Corp Ltd (OHPC) and the 3x60 MW Bairasiul HEP of National NHPC Ltd," the company said in a statement. According to a statement, the units at both Balimela and Bairasiul have been in operation for over 35 years and the R&M of these units will result in restoration of output capacity, improvement in efficiency and reduction in auxiliary power consumption, in addition to leading to better plant availability. BHEL's scope of work for the job orders envisages design, engineering, manufacturing, supply, dismantling, setting up, testing and commissioning of critical parts of turbines, generators, governors, controls and instrumentation, protection and balance of plant (BoP). Major equipment for these contracts will be manufactured and supplied by BHEL's plants in Bhopal, Jhansi and Bengaluru. The normal life expectancy of an HEP is considered to be 30-35 years. In the current scenario of resource constraints, renovation and modernisation of existing HEPs is considered as the best option as this is cost effective and requires much lesser time than setting up of greenfield projects. BHEL's footprint in hydropower accounts for 23 GW of hydro sets commissioned and 6 GW of hydro sets under execution in India and abroad. These sets, aggregating more than 500 at 200 different power stations in India and abroad, are delivering customised solutions in the most challenging of terrains - from the Himalayas in India and Bhutan to faraway lands of New Zealand, South-East Asian countries and Africa.

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Targeting 10-15% volume growth this fiscal-:- Equity Research

After the government cut gas prices to USD 2.50 per MMBTU on Friday, Gujarat Gas says it will try to maximise the benefit of the price cut that can be passed on to the customers. Gujarat Gas is working on gas pricing and will try and pass on benefits as much as possible to customers and will likely revise prices by Monday evening, said Nitin Patil, Chief Executive of the company. Patil said the company expects a volume growth from the revised prices and is targeting 10-15 percent volume growth in FY17. He added that Gujarat Gas has started working on its projects like Dahej and Thane and volumes from such projects will start kicking in from next quarter onwards.

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Only Parliament can form Cauvery Water Mgmt Board-:- Equity Research

The Centre has told the Supreme Court that forming the Cauvery Water Management Board is the sole prerogative of Parliament and that the court can’t order the government on this. The Attorney General Mukul Rohatgi informed the SC on Monday that the constitution of the Cauvery Water Management Board requires the consent of both houses of Parliament and that it cannot be formed on the orders of the apex court. The SC will hear the matter on Tuesday. The Centre's submission has come as a huge relief to Karnataka and Kerala which have been opposing the Board saying that it will take away their rights over the Cauvery reservoirs. On Friday, a two-member bench of the SC, Justice Deepak Misra and Justice UU Lalith, had ordered the Centre to form the board before October 4 to decide future distribution of Cauvery water among all four riparian states – Karnataka, Tamil Nadu, Kerala and Puducherry. The AG had assured the SC that he would inform the Centre to take note of the order. Tamil Nadu and Puducherry have already named their representatives to the board. The Karnataka government had opposed the SC order and even refused to nominate its representative to the board, with Kerala also following Karnataka. Former Prime Minister HD Deve Gowda went on a hunger strike on Saturday opposing it. He called it off only after Prime Minister Narendra Modi requested him to end it. Two weeks ago, the SC had set a deadline of one month to form the board. The Karnataka Assembly has already passed a resolution against the Board saying it would take away Karnataka's right over its dams in Cauvery basin. The Centre's silence over the issue was severely criticised by all political parties except the BJP in Karnataka. But the state BJP has been openly opposing the SC decision on constitution of the Cauvery Water Management Board. The Centre's latest stand is expected to cool tempers in Karnataka, which is facing a severe drought in Cauvery basin districts this year.

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