Weekly Market Recap

Fear of a northward movement of the inflation figure, weak cues
from the European markets and the extant political uncertainty
proved troublesome for the Indian bourses this week. The BSE
Sensex registered a loss of 5.1% while the Nifty registered loss
of 5%. Foreign Institutional Investors (FIIs) were net sellers to the
tune of Rs. 1,047 crore and the Mutual Funds were net buyers to
the tune of Rs. 144.2 crore.
The whole price index rose to 8.24 for the week ended May 24 as
compared to 8.1% in the previous week.
The government hiked the petrol and the diesel prices by Rs.5
and Rs.3 a litre respectively, and that of LPG (cooking gas) by
Rs 50 a cylinder. However, kerosene prices have been left
unchanged. The Union Cabinet has utilized a slew of measures
to offset the effect of surging global oil prices that had put the
national oil companies under pressure. To obviate sharper hikes
the government has brought down the import duty on crude
and products by 5% making duty nil on crude, 2.5% on petrol
and diesel and 5% on jet fuel and other products.
Engineers India declared a considerable rise in standalone net
profit for the fourth quarter ended March 2008. During the
quarter, the profit of the company rose 33.30% to Rs 56.68
crore from Rs 42.52 crore on y-o-y basis. The company posted
earnings of Rs 10.09 per share during the quarter, registering
33.29% growth over previous year. Net sales for the quarter
jumped 49.24% to Rs 242.82 crore, while total income for the
quarter jumped 51.82% to Rs 287.77 crore.
GMR Industries is reportedly investing Rs 800 crore to set up sugar
mills in Karnataka. The company is in the process of setting up two
sugar mills at Ramdurg and Raibag in the Belgaum district of the
state. The company will have a combined capacity of 14,000 ton
crushed per day (TCD) by the end of 2009. It has also taken a semifinished
cooperative sugar factory at Ramdurg from the government
of Karnataka on a 25-year lease, which will have a 2,500 TCD
capacity. It has just completed the acquisition of Alagawadi
Bireshwar Sugars (P) which holds a license to set up and operate a
3,500 TCD sugar mill at Raibagh in Karnataka, for Rs. 17 crore.
DLF Group posted a net profit of Rs 7,812.03 crore for the year
ended Mar. 31, 2008 as compared to Rs 1,933.65 crore for the
year ended Mar. 31, 2007, marking a jump of 4.04 times. Total
income for the year rose 3.62 times to Rs 14,683.91 crore,
compared to Rs. 4,053.01 crore for the last year. On Standalone
basis, DLF reported a phenomenal rise in net profit at Rs 2,574.59
crore for the year ended Mar. 31, 2008 as compared to Rs 406.91
crore for the last year, registering a jump of 6.32 times.
Mercator lines has reportedly acquired a 2006 built double hull -
very large crude carrier (VLCC) of 299, 325 DWT. This is the third
VLCC under control of Mercator Lines, that already has a fleet of
29 vessels. Its net profit jumped 3 fold to Rs. 370 crore supported
by its growing fleet, buoyant shipping demand and firm freight
rates in the dry carrier segment. Its shipping revenue increased
30% to Rs. 1,455 crore.
Punj Llyod said that it has signed an agreement with Singapore
Technologies Kinetics (ST Kinetics) for the manufacture of defence
equipment. Under the agreement, ST Kinetics and Punj Lloyd
would be pooling their resources in the execution of supply
contracts for the Ministry of Defence. It has also bagged a license
for the manufacture of guns, rockets and missile artillery systems
and other equipment as well as Rs 649 crore contract for the
motor spirit quality upgradation project for the Indian Oil
Corporation (for its Barauni Refinery).
On the international front, oil prices maintained their streak of
remarkable intra day volatility, with a US$ 5.4 + rise on Thursday.
This degree of fluctuation indicates the level of entropy in the
crude market, as also the level of edginess vis-à-vis seemingly
minor triggers. Until a long term solution is found to tackle the
issues of supply, alternative energy sources and risk premia, it
seems that the world markets will have to live with such
fluctuations.