Cummins India Q1 misses forecast, net falls 8% at Rs 166 cr

Diesel and natural gas engines manufacturer Cummins India  reported a dismal performance on all parameters with the first quarter net profit falling 8 percent year-on-year to Rs 166 crore.

Total income from operations dropped 16.6 percent to Rs 1,049 crore during April-June quarter from Rs 1,259 crore in a year ago period.

Analysts on an average had expected it to report net profit at Rs 172 crore on revenues of Rs 1,258 crore.

Earnings before interest, tax, depreciation and amortisation (EBITDA) plunged 24.5 percent on yearly basis to Rs 176 crore and operating profit margin slipped 180 bps year-on-year to 16.7 percent in the first quarter as against analysts' forecast of 16.8 percent.

Impact of low demand

Revenues were weak on a high base of last year and moderation in South-based demand, which was driving bulk on demand.

Surge in purchase of gensets, driven by power shortage in South India, subsided during June quarter while domestic demand, which has been strong in the last few quarters, moderated during the quarter.

Since the second quarter of previous financial year 2012-13, exports have been showing moderating or declining trend, impacted by slowdown in global demand, particularly in the HHP segment.

Margins were under pressure due to moderating demand in both, domestic and export market, leading to unfavourable product mix.

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Fall in SPDR, Gold spot prices in global market: Mecklai.

Fall in SPDR, Gold spot prices in 

global market: Mecklai

The gold prices in the global markets have seen a steep fall since the beginning of this year (2013) from 1690 levels to a shocking 1180 levels, a fall of 22 percent. This has obviously taken a toll on the largest gold fund ETF SPDR as it also dropped from 1342 in Jan 2013 to 918.6 in Aug (lowest since Feb 2009).

Gold is considered as a safe haven for most investors and the SPDR contributes to the global economy as a strong indicator of its current health in the bullion market. Its fast decline has become a worrisome factor for the global health. Crash in gold prices in April due to euro region was the key reason for fall in ETF SPDR gold asset .The ongoing USD 85 Billion Fed bond buying has increased the supply of dollar in the market which have made investors more aggressive on taking more risks on the back of improving economy. This has made them gold averse, pushing them away from safe havens and towards equities. Hence, the precious metal which was ever chased for its value and safe sentiment has now become less attractive with traders flocking for equities to get better returns.

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MCX Silvermic February contract gains

t 14:02 hrs MCX SILVERMIC August contract was trading at Rs 41992 up Rs 224, or 0.54 percent. The SILVERMIC rate touched an intraday high of Rs 42132 and an intraday low of Rs 41637. So far 25093 contracts have been traded. SILVERMIC prices have moved down Rs 15209, or 26.59 percent in the August series so far.

MCX SILVERMIC November contract was trading at Rs 42777 up Rs 239, or 0.56 percent. The SILVERMIC rate touched an intraday high of Rs 42900 and an intraday low of Rs 42405. So far 2085 contracts have been traded. SILVERMIC prices have moved down Rs 3226, or 7.01 percent in the November series so far.

MCX SILVERMIC February contract was trading at Rs 43504 up Rs 236, or 0.55 percent. The SILVERMIC rate touched an intraday high of Rs 43551 and an intraday low of Rs 43101. So far 60 contracts have been traded. SILVERMIC prices have moved up Rs 1504, or 3.58 percent in the February series so far.

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MCX Zinc news!!!

MCX Zinc negative; support 106 and 105.30
 

MUMBAI :- Zinc futures for June delivery on India's Multi Commodity Exchange (MCX) is negative and intra-day traders are advised to buy on dips for the day, according to our analyst at Commodity Online.

MCX zinc for June delivery was seen trading down by 1.57% at Rs.106.80 per kilogram as of 02.26 PM IST on Monday.

“For intra-day, support for the commodity is seen at 106 and 105.30 levels while resistance is seen at 109.45 and 110.35 levels,” said John Godson, Technical Analyst at Commodity Online.

“Buying sentiments are expected in the range of 106-106.5,” Godson noted.

Zinc prices on London Metal Exchange (LME) closed slightly up by $1809 per ton on Friday.

MCX zinc prices remained under pressure on concerns over economic recovery in China. Chinese HSBC Purchasing Managers' Index declined to 48.3 in June from May's final reading of 49.2, according to the data released by HSBC China last week.

Meanwhile, according to the preliminary data recently compiled by the International Lead and Zinc Study Group (ILZSG), over the first four months of 2013 global supply of refined zinc metal exceeded demand by 48kt. Total reported inventory levels over this period decreased by 111kt.

As in the case of lead, Chinese zinc mine output figures for March and April were estimated as no information was published by the Chinese National Nonferrous Metals Association (CNIA).

In other countries decreases were recorded in Australia, Canada, Ireland and Mexico and increases in India, Peru and Turkey.

A rise in global refined zinc metal production of 3.4% was primarily a consequence of higher output in China, Italy and the Republic of Korea.

Increases in demand for refined zinc metal of 3.7% in Europe, 11.9% in the United States, 10.7% in India and 7.1% in China were partially balanced by declines in Japan and the Republic of Korea resulting an overall increase in global usage of 5.7%.

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Respite for Sterlite; copper smelter online after 3 months.

After 3 months, Sterlite 's copper smelter in Tuticurin is back online. With a clean chit from the National Green Tribunal (NGT), the company's expansion plans have also received a fillip reports CNBC-TV18's Poornima Murali.

This copper smelter, belonging to Sterlite Industries, is India's largest and is crucial to the company's operations and to copper-dependent industries, as it produces close to 30,000 tonnes of copper a month. So when it was shutdown for nearly 3 months following anti-pollution protests, the hit was palpable.

After being shut for 85 days, this copper smelter has now come online. It caters to 45 percent of India's copper requirement and has been a major source for country's infrastructure.

According to experts, the shutdown has not only resulted in a slowdown in pace at which crucial infrastructure projects are coming along, it has also led to the companies having to switch to more expensive imported copper from China. But with the plant up and running, some of this pressure should ease soon.

Despite protestor claims that this smelter is the worst source of pollution in the district, it has received a clean chit from the NGT. So Sterlite, which has lost around Rs 4,000 crores in revenues due to this shutdown, is now eager to embark on plans to expand the plant and double capacity.

P Ramnath, CEO, Sterlite (copper smelter) says that Rs 2500-3000 crore expansion plan will double the capacity sterlite on expansion path

The company also says it has invested Rs 500 crore in addressing pollution-related issues. But residents of the district whose anti-pollution protests have forced the plant to shutdown five times in the last 17 years are not feeling very reassured.

To allay these fears, the authorities have set up a committee to conduct inspections at this and other plants that are coming up.

Aashish Kumar, district collector, member, panel inspecting industries in Tuticorin says “The main problem is pollution. We have formed a committee to inspect industries in Tuticurin.”

But Sterlite maintains that contrary to allegations that it discharges waste water into the sea, this is world's only "zero discharge" smelter. Now the Tamil Nadu Pollution Control Board has moved the Supreme Court against the clean chit given by the NGT. But Sterlite is confident that the case will go in its favour and once expansion is complete, its Rs1,800 crore contribution to the state exchequer will go up further.

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Vedanta Aluminium optimistic of getting bauxite from Odisha...

Days after restarting its refinery in Odisha's Kalahandi district following a seven-month shutdown due to a bauxite scarcity, Vedanta Aluminium Limited is optimistic about getting the ore from the state itself.

"If aluminium industries cannot survive in Odisha, having huge bauxite reserves, then they are not feasible anywhere in the country," Vedanta Aluminium Chief Operating Officer Mukesh Kumar said after meeting Chief Secretary J K Mohapatra here today. "Therefore, we hope that VAL will get the required raw material from the state."

VAL, a unit of Anil Agarwal-led Vedanta Resources, restarted its 1 million tonne per annum alumina refinery at Lanjigarh on July 11. Bauxite for the plant, which is operating at 60 percent capacity, is being procured from Jharkhand, Chhattisgarh and Gujarat.

Kumar's optimism stems from the recent submission of a report of an inter-ministerial committee of the state government to Chief Minister Naveen Patnaik. The report of the panel headed by Finance Minister Prasanna Acharya is on the long-term linkage policy for supply of ore to local industries such as VAL's alumina plant at Lanjigarh. Kumar said the company was hopeful of a positive response from the committee's report.

"In our presentation to the ministerial committee on February 15 this year, we had clearly mentioned about our plans as well as the alternative sources of bauxite to keep alive the refinery. We hope that the committee's report will be positive," Kumar said.

VAL's refinery is adjacent to the Niyamgiri Hills, where the bauxite is proposed to be mined. The Supreme Court had on April 18 directed that the views of the local residents be taken on whether to allow mining on the Niyamgiri hills. Kumar declined to comment about the ongoing Gram Sabhas being held by the state government as per the direction of the apex court.

The tribal residents of Serkapalli village in Rayagada district unanimously rejected mining at the Niyamgiri hills, asserting their religious and cultural rights at the first gram sabha.

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Natural gas production to touch 183 mmscmd by FY20: ICRA

Domestic natural gas production , which has steadily declined in the last two years, is expected to increase from 111 mmscmd in FY13 to around 183 mmscmd by FY20 on the back of future discoveries, rating agency Icra said on Wednesday.

"We expect the domestic natural gas production to increase from 111 mmscmd last fiscal to around 125 mmscmd by FY16, from existing or already discovered fields. This could further increase to around 183 mmscmd by FY20," it said in a report.

"Domestic natural gas production has steadily declined over the last two years to 111 mmscmd in FY13 from 143 mmscmd in FY11 primarily due to fall in production of KG-D6 block from 56 mmscmd in FY11 to 26 mmscmd in FY13. "Factoring in certain production from future discoveries, we estimate domestic production could increase to about 200 mmscmd by FY25 notwithstanding the fall in the production from existing fields," it added.

The report further said the demand potential for natural gas is expected to significantly rise from 250 mmscmd at present to 360 mmscmd by FY20. "While the demand potential for natural gas is high, the actual offtake could critically depend upon the price competitiveness of gas against alternative fuels and timely commissioning of the proposed transmission pipeline infrastructure," it said.

The report also said it sees gas demand rising to 435 mmscmd by FY25. It is to be noted that actual consumption of gas was around 140 mmscmd in FY13, which dipped over the last two years from 177 mmscmd in FY11 due to constrained gas availability.

The study pointed out that despite increase in natural gas production, it is expected to be lower than the demand, which would prompt consumers to look at re-gasified  liquefied natural gas (R-LNG).

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