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India's Third Giant Leap

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Indian Indices Open Flat
Tue, 5 Jul 09:30 am

Barring China, major Asian stock markets have opened the day on a negative note. Stock markets in Hong Kong and Japan are trading lower by 0.8% and 0.7% respectively.

Benchmark indices in Europe ended their previous session on a negative note with stock markets in UK ending the day lower by 0.9%. The rupee is trading at 67.18 per US$.

Indian stock markets have opened the day on a flattish note. The BSE Sensex is trading marginally lower by 18 points (down 0.1%) and the NSE Nifty is trading lower by 15 points (down 0.2%). Stocks from small cap and midcap spaces have opened marginally up. BSE Mid Cap is trading lower by 0.1%, BSE Small Cap is trading higher by 0.1%.

Major sectoral indices have opened the day on a mixed note with stocks from pharmaceutical sector witnessing maximum selling pressure. While, stocks from telecommunication sector are in demand.

As per an article in Livemint, Tata motors plans to launch a new micro sports utility vehicle. The concept is similar to the newly launched Mahindra KUV 100. The company is working on its design and the production is expected to commence by FY18.

Further, the company's recently launched Tiago has received positive response from the buyers. The company has been selling 3000-plus units of Tiago every month since its launch in the month of April. The model's success has reflected in the company's sales, which grew by 22% YoY in the month of June.

Further, the company is also planning to launch a bunch of new models by 2020. This includes a sedan based on the Tiago platform, a compact sports utility vehicle called the Nexon and Hexa, and a crossover.

Provided, the company replicates the success in its new model like Tiago, it will be able to regain its lost market share which fell to 5.35% from 6.22% a year earlier in FY16. Further, traction from its new models will also help to improve its Indian operation. The stock of Tata Motors is trading down by 0.8%.

In another news update, National Thermal Power Corporation (NTPC) reported 10% growth in the electricity generation for the June quarter. This is the fastest quarterly growth in last two years. This hints that the electricity consumption is on a recovery mode.

Further, Plant Load Factor (PLF) too indicated the utilization level of the plant is also on an improving trend. Reportedly, PLF expanded by 1.8% YoY to 81.4% in the first two months of the current fiscal year. A further rise in the PLF to 85%+ will enable the company to earn incentives. This will have positive impact on the company's earnings.

The company is also making mammoth investments. Nearly half of NTPC existing capacity is under construction phase. Thus, improvement in utilization levels will be the key things to watch out for going forward as the company increases its capacities.

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