Rs 3 lakh crore investment--POWER!!!

Govt eyes Rs 3 lakh crore investment, reforms to light up power sector

Piyush Goyal has already laid out an ambitious target of the new govt to provide 24X7 power supply to all households in the country by March 2019

Press Trust of India  |  New Delhi  

December 28, 2014 Last Updated at 11:50 IST

With an ambitious target to give 24X7 electricity to all, the government is eyeing Rs 3 lakh crore worth investments in power transmission and distribution business, as it gears up to free the sector from a gridlock of fuel scarcity, regulatory clogs and other issues.

Leading from the front, Power Minister Piyush Goyal is confident that the results would start showing in the new year and a right foundation has been laid to 'power up' thepower sector since a new government took over in May this year.

The ray of hope for 2015 follows a year mostly marked with the drying up of investments, fuel supply bottlenecks and the gnawing transmission problems.

"We are planning investments of Rs 3 lakh crore in the T&D sector and have already started the Deen Dayal Grameen Jyoti Yojana and Integrated Power Development Scheme, with all this I think we will be able to reach the length and breadth of the country and enhance the T&D network and make sure everybody gets adequate power," Goyal told PTI.

The investment banker-turned-politician has already laid out an ambitious target of the new government to provide 24X7 power supply to all households in the country by March 2019 -- a deadline that is little over four years away now.

"We believe our steps to increase coal production are on the right track, our targets are quite doable, whether it is renewable energy, coal production or 24x7 power, we are very confident of our targets," Goyal said.

The mass cancellation of coal mines was a big 'shock' for power sector in 2014, but the sector is hopeful that this thorny issue of fuel supply has been put to rest with the launch of a transparent auction process for coal mines.

"2014 was a turbulent year for the power sector players with Supreme Court cancelling captive coal blocks, inadequate fuel supply to power plants, no long term power procurement bids on offer, plummeting short term power rates and inadequate tariff hikes because of elections," Debasish Mishra, Senior Director, Consulting, Deloitte India said.

However, Goyal differed with this observation and said that the electricity generation has grown in double-digits and coal production has also shown an upswing since he assumed office about six months ago.

BIOSIMILARS...BIG OPPORTUNITY FOR PHARMA...!!!!

Biosimilars are the next big thing for Indian pharma
By: Pallavi Ail | Mumbai | December 27, 2014 1:31 amWhile the US is still ironing out its rules governing generic equivalents of biologic drugs, also known as biosimilars, the Indian market has witnessed nearly 20% annual growth for the year ending November 2014 in the segment.Biologics are drugs whose active ingredients are sourced from living organisms so these products are based on proteins, genes, etc, unlike normal small-molecule drugs where the active ingredient is a chemical.Due to this complex base, biologics are not as easily copied as other drugs and companies that are leading such research in India are the top pharmaceutical firms such as Biocon, Dr Reddy’s,  Lupin and Cadila Healthcare.A recent HSBC report says that biosimilar sales grew 20% annually to Rs 2,000 crore or approximately 2.5% of overall market sales at the end of November 2014. Sales margins on biosimilar drugs range from 20% to 80%, according to analysts. On the other hand, almost 90% to 95% of the innovator price of a drug is eroded when a generic version of a small-molecule drug is launched.With the US drug patent pipeline drying up, it is the high-margin biologics that will sustain sales for Indian companies,  analysts.On December 9, the BSE-listed Cadila announced the launch of a copycat version of AbbVie’s blockbuster biologic, Humira, which targets autoimmune disorders such as rheumatoid arthritis. The drug is touted as world’s top-selling drug with global sales exceeding Rs 1,000 crore in CY13, according to the HSBC report. The biosimilar, named Exemptia, will be marketed as a 40 mg injection administered once every alternate week and launched at one-fifth of Humira’s price of approximately $1,000 per injection.Similarly, in April 2013, Cipla started selling a biosimilar of the rheumatoid arthritis drug Enbrel with a launch price of $100. The price of the drug from the innovator, Amgen, was $133.Biocon’s CANMab, a breast cancer therapy that is a generic of Roche’s Herceptin, was launched in February 2014 with a 25% discount to the innovator price.“While we are excited with novel launches even in emerging markets given better pricing, we believe a significant contribution is far away as the market is still at nascent stage in accepting newer better forms of treatments coming at higher costs,” HSBC analysts wrote.Dr Reddy’s, especially, has the most exposure to biosimilars with approximately 7% or Rs 110 crore of its FY14 India sales originating from biosimilars compared with 3.7% for Cadila and less than 1% for Lupin and Cipla, according to HSBC analysts. “Dr Reddy’s is upping the ante on investing in complex generics as well as more risky areas involving biosimilars and proprietary products,” IDFC analysts wrote in a note dated October 29. “While limited visibility on value unlocking from the aggressive R&D investments in these spaces is a challenge, we see significant value creation possibilities given Dr Reddy’s proven capabilities in these high potential areas.”The European Medicines Agency has approved seven types of biosimilars from 2009 till date, according to data available on its website. None of the companies listed are Indian. In 2014, it approved the a single biosimilar: Sanofi’s insulin glargine therapy for diabetics named Lantus. The US Food and Drug Administration is yet to approve any biosimilar. “Material entry in regulated markets (US, EU) is still 4-5 years away as per our understanding,” HSBC analysts wrote.http://www.financialexpress.com/article/economy/biosimilars-are-the-next-big-thing-for-indian-pharma/23516/

MERRY CHRISTMAS..&..THERMAX

MIND BOGGLING YET…

I WAS AMAZED TO SEE THE PRICE ROCKETED TO CREATE ENOUGH TURBULENCE IN ME.

I BOUGHT 1000 SHARES OF THERMAX FOR Rs 38.65, 15 YEARS BACK,

TODAY, THE PRICE OF THERMAX IS Rs 1050/- OF Rs 2/- FACE VALUE (EQUAL TO Rs 5150/-). IN OTHER WORDS, ONE LAKH INVESTED HAS BECOME MORE THAN 66 LAKHS.

EVEN RECENTLY, 2-3 YEARS BACK, I FOUND MARKSAN AT Rs 2.30 NOW IT IS QUOTING Rs 64/-.

ALSO FOUND MORARJEE TEXTILES AT Rs 7.0 NOW TOUCHED A HIGH OF Rs 61, INDOCOUNT INDUSTRIES AT Rs 7.0 NOW TOUCHED A HIGH OF Rs 390/-.

BUT THE ABOVE THREE WERE JUST MEMORIES BUT NO PARTICIPATION……

===============================================

MERRY CHRISTMAS TO YOU & ALL INVESTORS & TRADERS…

RELIANCE-SHALE GAS- WOES & OPPORTUNITIES

New York fracking ban is bad news for RIL, shale gas producersAnalysts say RIL's venture with Chevron will be impactedDev Chatterjee  |  Mumbai  December 20, 2014 Last Updated at 22:49 ISTA ban on fracking by the New York state is a small setback for India’s largest private firm, Reliance Industries, which has invested $7 billion in US shale gas.  
On Thursday, the New York state banned fracking for health reasons. It said fracking, with horizontal drilling and chemical-laced water, could increase the risk of cancer, skin rashes, and upper respiratory tract problems. If the rest of the states in the US follow, it could put billions of dollars of investment at risk.
Analysts say the falling crude oil price is making shale gasunviable. Oil from shale gas assets costs between $50 and $100 a barrel as compared with $10 to 25 a barrel produced by West Asia from conventional methods of exploration.

EMERGING UNSCATHED

On Thursday, the New York state banned fracking for health reasons. It said fracking, with horizontal drilling and chemical-laced water, could increase the risk of cancer, skin rashes, and upper respiratory tract problems Analysts say Reliance Industries will be affected through its 40 per cent venture in Chevron’s Marcellus shale area that runs through parts of the state. Its other shale assets are in Texas and Pennsylvania

Analysts say Reliance Industries will be affected through its 40 per cent venture in Chevron’s Marcellus shale acreage that runs through parts of the state. Its other shale assets are in Texas and Pennsylvania.
“It will have marginal impact at best as Reliance Industries is yet to roll out its proposed $2-billion capital expenditure in the Marcellus region along with Chevron. Moreover, a moratorium since 2008 in the New York state would have meant that the capital expenditure committed so far would also have been done outside the state. The other two ventures with Pioneer and Carrizo are profitable and face no uncertainty,” says P Phani Sekhar, fund manager with Angel Broking.
Reliance Industries has already put its 45 per cent stake in its joint venture at Eagle Ford with Pioneer Natural Resources on the block at a valuation of $4.5 billion. The sale is targeted for conclusion early next year.
When contacted, a Reliance Industries spokesperson said: "The New York fracking ban (now formalised by the governor) was already in place for the last five years. This has no impact on Reliance Industries' activities. It should be seen in the same context as California and several east coast states having banned drilling for decades but it does not affect the rest of the industry. New York has the luxury of not needing shale gas drilling as nearby states such as Pennsylvania and West Virginia produce large excess volumes of gas."
Another worry for analysts is that the returns on capital employed by Reliance Industries’ shale gas investments were three-four per cent in 2013-14. This is estimated to hit double digits by 2021, but falling crude oil prices may change Reliance Industries’ calculations.  
On Friday, the Reliance Industries’ stock was up 2.7 per cent to Rs 900 a share.
Reliance Industries’ earnings per share from US shale gas assets were Rs 0.7 in 2013-14 and were expected to go up to Rs 11.2 by 2021, according to global bank Barclays.
“Earning from US shale, where Reliance has spent $7.4 billion so far, may rise as output increases, but with the steady returns on capital employed at 11-12 per cent, it may not be a key value driver,” Barclays said in a report dated October 8.  
For the first quarter of 2014-15, Reliance Industries’ revenue and Ebitda from the shale gas business were $270 million and $201 million, respectively. But revenue and Ebitda grew slower than volumes on a sequential basis owing to a weakness in gas prices. Analysts have also lowered production estimates based on the Marcellus project though estimates for Pioneer are higher.
Reliance Industries' total investment in the US till July 2014 has been $7.36 billion. The company invested $2.04 billion in buying stakes in three companies and gaining access to 12 trillion cubic feet of reserves.

http://www.business-standard.com/article/companies/new-york-fracking-ban-is-bad-news-for-ril-shale-gas-producers-114122000112_1.html

BUY..STEEL STOCKS...!!! DOUBLE MONEY...!!!

Over two-thirds of the total steel consumption is in the construction sector

Steel consumption in the country grew at a slower pace during April-July 2014 at 0.6 per cent, but a 30 per cent growth in exports helped swing the demand-supply balance in favour of demand.

Domestic consumption during the first four months of the fiscal 2014-15 stood at 25.72 million tonnes as compared to 25.57 million tonnes in the same quarter last year, data from the Joint Plant Committee, a wing of the Ministry of Steel, showed. In India, over two-thirds of the total consumption of the metal is in the construction sector.

While domestic demand grew slowly, demand for the metal produced at Indian blast furnaces was supported by the growth in exports. During April-July 2014, exports grew nearly 30 per cent to 1.84 million tonne as compared to 1.42 million tonne.

Steel production too kept pace with the consumption growth. During the four months, steel production grew 0.9 per cent to 27.39 million tonnes as compared to 27.15 million tonnes.

More than half of this production came from Steel Authority of India Ltd and Tata Steel’s plants. The two companies had over 15 million tonnes of production during the four months.

The improved market dynamics reflected on the financials. SAIL reported an 18 per cent increase in net profit to ₹529.88 crore for the first quarter of fiscal 2014-15 while JSW Steel reported a net profit of ₹801 crore, turning around a loss in the same quarter last year.

Tata Steel’s business from India also improved with the company’s net profit growing 67 per cent to ₹2,267 crore.

Credit rating agencies expect the performance of steel companies to improve further in the coming months.

“Fitch expects steel demand growth to start to improve from the second half of fiscal 2014-15, supported by a pick-up in consumption following rising consumer sentiments and an expected improvement in economic growth,” said Fitch Ratings in a statement.

Fitch added that the improving consumer sentiment is reflected in the passenger vehicle sales data compiled by SIAM which has shown sales volumes increasing in June and July 2014 as compared to a fall last year. “Steel demand was weak in the last fiscal due to slow growth in the key steel consuming industries of automobiles, infrastructure, construction and engineering,” Fitch stated. In fact, Fitch expects steelmakers to pass on the increased costs due to the hike in iron ore royalty rates to customers because of the improved demand environment. “The higher royalty rates will raise the input costs of Indian steel producers by $2-5 per tonne of steel produced, depending on the type and grade of iron ore used. Fitch expects steel producers to be able to pass on their higher costs to consumers because of a likely improvement in steel demand in India,” the rating agency stated.

Meanwhile, ICRA pointed to the lower international prices of coking coal aiding steel producers. Coking coal is almost entirely imported with very little domestic production. According to the rating agency, coking coal prices have declined by 16 per cent in the first quarter of 2014-15 as compared to the same quarter last year. This drop follows a 13 per cent decline in coking coal prices over the course of 2013-14 fiscal.

“We expect the domestic players producing steel through the blast furnace route to benefit from the continuing weakness in international coking coal prices, a trend which has already been observed in the financial results posted by a number of companies in the first quarter of 2014-15,” said ICRA in a research note.

India’s domestic consumption of steel in 2013-14 was 73.93 million tonnes. Global audit and consultancy firm Ernst & Young expects India’s steel consumption to grow to 83 million tonnes by the end of 2014-15.

(This article was published on August 26, 2014)

http://www.thehindubusinessline.com/economy/macro-economy/steel-industry-back-on-the-growth-path/article6354248.ece?homepage=true

NIFTY AHEAD...

PHENOMENAL RISE&HIGHs but A Denial for NOW….

The Indian markets have performed stupendously, like a race against all ODDs and against all emerging markets. We are the best performing Indices YTD or for the quarter. The Rise is so phenomenal that no-body expected but few could CASH the opportunity. Now many new entrants are making inquiries and many more are looking as a decent opportunity to make HUGE money to meet their DREAMS.

The fact is that, since January-14, Nifty rose by 20%, Mid-Caps by 30% and Small caps by 55%, some Individual stocks rose by 400-700% from their LOWs. The hype generated now is due to change in the Government, a market friendly team at the top. But the fact is that No-body could SELL the National property via LIBERALIZATION for no reason, nor for a simple cause. The National growth based on immediate requirements and will be judged by prioritising/striking a right balance between “NECESSITY & COMMERCIALIZATION”. The Future is GOOD as huge investments will take place and the results will come in due course of time.

As far as the Stock Markets rise is concerned, a dead cheap stocks are at a historic low was one of the major reasons for FIIs relentless investments. The Global markets are also encouraging and FREE Supply/HIGH Liquidity is driving the markets for NOW. Very few are working on the REAL worth for the paper but relying on the PROJECTIONS. The Nifty is POISED for touching 9000+ as experts are working on the next 3-year EARNINGS and P/E that could safely take us above the above said number. I am not pessimistic but play a realistic role for valuing the Available Opportunity. The main reason for Nifty may seek SOUTHWARD JOURNEY because of looming DROUGHT, Poor Investments made by the CORPORATES in the Preceding/Previous 2-3 years, so NO earnings Surprise by the top companies.

So, the scenario is GLOOM in the Short-term, however the POLICY push can give some bounce but for the next ONE year will be very challenging. The Nifty stocks are moving up but the UN-Winding is a concern. The rise from here may not be that much sharp or serious, from here 2-Ups and 4-5 Downs. Because the FUTURE is promising, on any DEEP cut/ steep fall BULLs take charge to make a comeback to take away the Retail Investors most of the STOP-LOSSES.

THE BLOOM and GLOOM story…..THE MOMENTUM IS HIGH….

THE NIFTY MAY TOUCH 8785-8850 RANGE; BUT VERY LIKELY, IN THE SHORT-TERM LOW MAY  TOUCH 7000, NO SURPRISE EVEN IF IT TOUCHES 6600-6400 RANGE

THE BANK-NIFTY MAY TOUCH 20100-22000 RANGE; IN THE SHORT-TERM LOW MAY  TOUCH 12500-800, NO SURPRISE EVEN IF IT TOUCHES 10100-10300 RANGE

THE RELIANCE MAY TOUCH 1450-1550 RANGE;IN THE SHORT-TERM LOW MAY  TOUCH 801-811, NO SURPRISE EVEN IF IT TOUCHES 759-736 RANGE

THE ONGC MAY TOUCH 620-650 RANGE; IN THE SHORT-TERM LOW MAY  TOUCH 311-321, NO SURPRISE EVEN IF IT TOUCHES 270 RANGE

THE SBI MAY TOUCH 3850-3950 RANGE, IN THE SHORT-TERM LOW MAY  TOUCH 1920-1950, NO SURPRISE EVEN IF IT TOUCHES 1450-1430 RANGE

THE ICICI MAY TOUCH 2130-2080 RANGE; IN THE SHORT-TERM LOW MAY  TOUCH 1180-1220, NO SURPRISE EVEN IF IT TOUCHES 970-950 RANGE

THE RELCAPITAL MAY TOUCH 950-1050 RANGE;IN THE SHORT-TERM LOW MAY  TOUCH 440-415, NO SURPRISE EVEN IF IT TOUCHES 330 RANGE

THE RELINFRA MAY TOUCH 1080-1150 RANGE; IN THE SHORT-TERM LOW MAY  TOUCH 520-540, NO SURPRISE EVEN IF IT TOUCHES 440 RANGE

WE CAN EXTEND AND READ MORE NUMBERS… BUT THE DENIAL IS RIDING HIGH EVEN IN MY MIND…

PLS DON’T BUY NOW UNTIL NIFTY TOUCHES 7250-80 RANGE, BUT THE ACTUAL BUYING IN QUALITY STOCKS SHALL EMERGE FROM 7000 ONLY. THOSE WHO ARE COMPULSIVE, SHALL TAKE A STOPLOSS ROUTE RATHER THAN HOLDING FOR LONGER…THW WAIT MAY BE 3 YEARS…!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

NIFTY-MONTHLY MOVEMENTS...!!!!

http://capitalmind.in/wp-content/uploads/2014/02/image.png

NALCO BIG EXPANSION PLANS..!!!!

 

Nalco in search of foreign smelter site, again

Kunal Bose  January 20, 2014 Last Updated at 22:33 IST

Amid a continuous rise in energy costs, persistent low aluminium prices are leading producers in the US and Europe to mothball high-cost smelters. Some are also reducing the amperage used in smelter pots to restrict metal production.

Despite India sitting on electricity-generating coal resources of 260 billion tonnes, smelters here are not spared the pains of high-energy bills. This is because supplies under 'linkage coal' are irregular on occasions and the quality of the fuel is always subpar.

Coal imports could have been the answer, but for their high costs. Ansuman Das, chairman and managing director of National Aluminium Company (Nalco), says "apart from the stubbornly low aluminium prices on the London Metal Exchange, the unremitting coal crisis poses a serious threat to optimising production at our 460,000-tonne smelter." Das remains focused on mining bauxite at the Panchpatmali hills and alumina production at Damanjodi to take care of the profits, under extreme pressure due to low prices.

Considering the experience of running a smelter at Angul, with linkage coal being far from satisfactory most of the time, Nalco will build a second smelter Sundargarh in Odisha, provided it gets an adequately large coal block to feed the power complex upstream. In contrast to the circumspection that marks Das's approach to building new smelting capacity or optimising the use of capacity Nalco has, he remains bullish about the alumina business.

In creating new alumina refining capacity, too, investment will be conditional on the grant of mining rights to new bauxite deposits or firm commitments to supply bauxite from its own deposits by any host government. Das is ready to walk any distance to get the 75-million-tonne (mt) Pottangi bauxite reserve in Odisha, as his agreeing to spend liberally on corporate social responsibility and abide by "new benefits" from the proposed amendments to the Mines and Minerals Development Act bear out. Nalco is committed to investing Rs 4,571 crore in creating the one-mt fifth 'stream' at the existing alumina refinery at Damanjodi. It will also venture into one-mt alumina refinery construction in Gujarat only on the basis of a fail-safe agreement with the state government for uninterrupted bauxite supply. The company's never-ending worries about coal supplies and the harrowing Vedanta Aluminium experience in bauxite procurement have, no doubt, sensitised Nalco to securing a policy of insurance on the availability of raw material before committing investments in any new project.

Faced with the challenge of improving the "viability" of the Angul smelter and choosing the right direction for growth, Das has decided to revisit Nalco's 'vision 2020 document'. While the revision will take time, the company is looking to expand smelting capacity close to cheap energy sources. "Yes, we have been looking at the option to build a smelter abroad where energy costs will not be a concern. To start, Nalco has zeroed in on five countries in the Gulf and southeast Asia to explore the possibility of building a smelter with a local partner. The company will ask commercial attaches of Indian embassies to hand-hold our officers in assessing the comparative business environment in likely host countries. It will appoint consultants only after receiving exploratory reports from its officers."

Nalco's last-attempted foreign outing, under Das's predecessor, had ended in a fiasco, causing much discomfiture to the mines ministry. Perhaps, this could have been avoided, had the then Nalco management conducted a proper recce of the company that was to supply five mt of coal annually to run a 1,250-Mw power complex upstream of a 500,000-tonne smelter Nalco planned to build in East Kalimantan province, Indonesia, at an investment of $4 billion. The project had to be jettisoned, as the company expected to supply coal avoided signing a formal agreement with Nalco.

The setback in Indonesia happened about a year and a half ago and memories are still raw. The fact, however, remains Nalco will stand to gain more by having a smelter in an energy-cheap foreign destination compared to exporting one mt of alumina a year. Indonesia, rich in bauxite and coal, wants to graduate from being an exporter of mineral to a metals producer. China, heavily dependent on Indonesia for bauxite imports, has correctly read the growing Indonesian dislike of remaining an exporter of resources that deny it the benefits of value addition, specially when it is rich in energy. Seeing the writing on the wall, Shandong Nanshan, China's second-largest aluminium group, is to build a complex in Indonesia, including a 2.1-mt alumina refinery and a 570,000-tonne smelter. As Djakarta may discourage bauxite exports to groups not engaging in value addition, China's Hongqiao group is to commission an alumina refinery in Indonesia in 2015. Nalco is revisiting Indonesia at a time when that country is welcoming foreign investment in the metals sector. But remembering the bitter experience of the past, Das will be making his "moves cautiously. Any tie-up will follow our due diligence of the foreign party and satisfying ourselves that the partner will deliver on its commitments".

http://www.business-standard.com/article/markets/nalco-in-search-of-foreign-smelter-site-again-114012001235_1.html