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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