Indian markets close strong

Thu, 14 Aug Closing

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Extending the strong rally in afternoon trade, the Indian benchmark indices closed today on a positive note. Robust momentum in index heavy weights boosted the rally for the day. Except IT, all the other sectoral indices have closed on a firm note with stocks from the realty and capital goods closing the day on a thumping note. Both the BSE Mid Cap and the BSE Small Cap indices gathered steam and were up by 1.16% and 1.14% respectively. The BSE Sensex closed higher by 157 points. The NSE-Nifty too was seen up by 52 points.

On the global front, the Asian indices closed the day on a mixed note. The European indices too are witnessing mixed performance. The rupee was trading at Rs 60.85 to the dollar at the time of writing.

Aluminium stocks such as NALCO has closed the day on a firm note whereas Hindalco has witnessed selling pressures today.

The stock of government-owned aluminium producer National Aluminium Company Ltd (NALCO) has reported a strong performance for the first quarter of FY15. The company's net profit has jumped whopping 69% YoY ; despite moderate improvement in revenue of 8% YoY. This was primarily due to its aluminium segment turning profitable (Rs 31 cr) in the June quarter as against a loss of Rs 53 cr a year ago. The aluminium segment has been loss-making over the last two years. Moreover, healthy other income and lower expenses also boosted the profitability of the company. The company's fuel cost as a percentage of revenue decreased to 27% from 33% compared to the corresponding period last year. Fuel costs had stood lower on account of higher share of alumina sales in the company's revenues.

Barring few such as GVK Power & Infra, Torrent Power ltd and KSK Energy, all the remaining power sector stocks have closed the day on a firm note. Indiabulls Power and Satluj Jal Vidyut have led the pack of gainers for the day.

As per a leading financial daily, Adani Power has acquired Lanco Infratech's 1,200 MW Udupi thermal power plant in a Rs 60 bn transaction. This happens to be the second mega deal in two-and-a-half weeks for the sector that is seeing a spurt of fund-raising and M&A activity after being in slump for years. The deal is one of the largest in thermal power in terms of value and capacity. This would be a huge value add to the Adani Group given that it already stands as India's biggest private sector power producer. Lanco Infratech will receive Rs 20 bn in cash and would transfer debt of about Rs 40 bn to Adani. The primary objective behind the deal is to pare down the debt that had ballooned in recent years when the power sector was in major trouble. However, the sector's outlook has improved significantly after the change in government in May this year. This has also increased the appetite of potential buyers and prompting some sellers to seek higher valuation for their assets.