Companies & Sectors
May auto sales show green shoots of recovery
Sales of India's largest passenger car manufacturer Maruti Suzuki grew by 13.8 percent in its total sales for May which stood at 114,825 units, up from 100,925 units sold in the corresponding month of 2014
 
Recovering from high fuel and interest costs, automobile manufacturers showed healthy sales performances during May.
 
Sales of India's largest passenger car manufacturer Maruti Suzuki grew by 13.8 percent in its total sales for May which stood at 114,825 units, up from 100,925 units sold in the corresponding month of 2014.
 
Domestic sales of the company during the month under review grew by 13 percent at 102,359 units from 90,560 units sold in May 2014.
 
Exports during May zoomed by 20.3 percent at 12,466 units from 10,365 units shipped out during the corresponding month of 2014.
 
Chennai-based automobile manufacturer Hyundai Motor's (HMIL) overall sales including exports grew by 1.5 percent and stood at 52,515 units from 51,718 units sold in the corresponding month of 2014.
 
"In a market experiencing low growth with decreasing contribution of rural and diesel vehicles sales, Hyundai volumes grew to 37,450 units," said Rakesh Srivastava, senior vice president for sales and marketing, HMIL.
 
The company's domestic market sales grew by 3.4 percent and stood at 37,450 units during the month under review from 36,205 units sold in May, 2014.
 
However, the largest passenger car exporter in the country only managed to ship-out 15,065 units in May, 2015, which is a decline of 2.9 percent from 15,513 units being sold abroad in the corresponding month of the previous year.
 
Other major players in the Indian auto market, Tata Motors and Mahindra & Mahindra (M&M) reported a mixed sales results.
 
Tata Motors' overall sales, including exports, during May increased by five percent and stood at 39,496 units from 37,538 units sold during the like period of last year.
 
Mahindra and Mahindra's overall sales including exports during May declined by 3 percent and stood at 36,706 units down from 37,869 units in the corresponding month of 2014.
 
“The auto industry has been showing signs of recovery and it is important that factors like an interest rate cut if considered, would accelerate growth," said Pravin Shah, chief executive of the automotive division, Mahindra and Mahindra.
 
Japanese automobile major Honda's domestic sales during the month under review marginally grew by just one percent at 13,431 units from 13,362 units sold in the corresponding month last year.
 
Two-and-three-wheeler maker TVS Motor Company closed last month with a six percent growth in sales 220,079 units from 206,813 units sold in the corresponding month of 2014.
 
Suzuki Motorcycle India registered a 3.64 percent increase in its May 2015 sales which stood at 33,287 units from 32,117 units sold in the corresponding month of last year.
 
Two-wheeler major Honda Motorcycle and Scooter India's sales grew by three percent and stood at 367,226 units from 355,530 units sold in May, 2014.
 
However, Hero MotoCorp's May sales declined by 5.41 percent and stood at 569,876 units from 602,481 units sold in the corresponding month of last year.
 
According to analyst, the results show conditions for a demand growth getting built. 
 
"Typically, the urban demand for cars is supported by the growth of disposable income being significantly greater than the growth of inflation. What is critical would be the extent to which this is sustained - while inflation may stay low, salary growth will happen if jobs are created," said Kumar Kandaswami, senior director with Deloitte in India.
 
"The other variables that come into play are the household savings that the potential car buyers will want to take back to the levels they were at in the high growth years and the ability of the potential customers to accept the varying fuel prices."
 
He added that any rural slow-down will impact the entry level hatchbacks in passenger cars and SUVs (sports utility vehicles) and the economy motorcycles. 
 
However, the results failed to impress the markets. The automobile index on the Bombay Stock Exchange (BSE) declined by 65.71 points and stood at 19,014.08 points.
 
"Auto industry monthly sales numbers failed to cheer the street," said Gaurav Jain, director, Hem Securities.
 

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Nifty, Sensex, Bank Nifty wait for RBI action – Monday closing report
What will matter is not the RBI policy on Tuesday but the market reaction to it. Nifty will be weak if it closes below 8,350
 
We had mentioned last week that NSE’s CNX Nifty will struggle to head higher. The 50-stock index on Monday witnessed highly volatile session. After trading in the green for major part of the trading session, the benchmark gave up all the intra-day gains and closed marginally lower. 
 
The S&P BSE Sensex opened at 27,771 while Nifty opened at 8,417. Sensex moved from the low of 27,738 to the high of 27,959 and closed at 27,849 (up 21 points or 0.07%) while Nifty reached up to 8,467 before moving to the low of 8,405 and closed at 8,433 (down 0.25 points). Bank Nifty moved gradually lower today. It opened at 18,721 and immediately hit a high at 18,833. From there, it moved to the low of 18,599 and closed at 18,617 (down 104 points or 0.56%). NSE recorded a volume of 63.24 crore shares. India VIX rose 1.53% to close at 16.9125.
 
Market looks ahead to the Reserve Bank of India (RBI)’s second bi-monthly monetary policy review Tuesday. The data released by India's statistics office on Friday showed that the Indian economy grew 7.5% in the fourth quarter of last fiscal ended 31 March 2015 over the year ago period, making it the fastest growing large economy in the world.  The growth last quarter was better than the revised estimate of 6.6% rise in GDP in the third quarter ended 31 December 2014. Meanwhile, it moderated its GDP growth estimate for the full year (2014-15) from previous projection of 7.4% to 7.3%.
 
The seasonally adjusted HSBC India Purchasing Managers' Index (PMI) hit a four-month high of 52.6 in May 2015, from 51.3 in April 2015, Markit Economics said today.
 
Jet fuel price was hiked by a steep 7.5% Monday and rates of non-subsidised cooking gas (LPG) by Rs10.50 per cylinder. Price of aviation turbine fuel (ATF), or jet fuel, in Delhi was raised by Rs3,744.08 per kilolitre (kl), or 7.54%, to Rs53,353.92, oil marketing companies said. The share price of Jet Airways fell by more than 6% on this news and the fall was also due to its poor quarterly results. 
 
The Insurance Regulatory and Development Authority of India (IRDAI) has done away with the capping of insurance business from one insurer by a bank in its latest draft. As compared to the previous draft that mandated banks to cap business from one insurer to 50%, IRDAI has removed this cap.
 
This year's monsoon may arrive on southern Kerala coast in the next five days as the rains have missed their normal start date of 1st June, weather officials said on Monday. The annual infrastructure output fell 0.4% year-on-year in April, its second straight contraction, dragged down by lower production of electricity, crude oil and cement, government data showed on Monday. The output fell by annual 0.1% in March.
 
Coming back to the Indian stock market, Neyveli Lignite Corp rose 14.26% to close at Rs83.75 on the BSE. It was the top gainer in ‘A’ group on the BSE. Adani Enterprises fell 10.41% to close at Rs632.70 on the BSE. It was the top loser in ‘A’ group on the BSE.
 
Larsen & Toubro rose 3.03% to close at Rs1,705.50 on the BSE. It was the top gainer in the Sensex 30 pack.  Sun Pharma fell 8.99% to close at Rs878.95 on the BSE. It was the top loser in the pack.
On Friday, US indices closed in the red mainly on the fresh worries about Greece. The US government reported on Friday that the economy contracted 0.7% in the first quarter. That was worse than its initial estimate of growth of 0.2%.
 
Chicago PMI, a survey of Chicago-area purchasing managers that provides insight into companies' business plans. The Chicago PMI shrank to 46.2 this month from 52.3 in the prior one.
 
A reading on consumer sentiment showed US consumer optimism in May was higher than expected but still down sharply from the end-of-April reading.
 
Asian indices showed mixed performance. Shanghai Composite (4.71%) was the top gainer while Taiwan Weighted (0.78%) was the top loser. Growth in China's giant factory sector edged up to a six-month high in May but export demand continued to shrink. The official manufacturing Purchasing Managers' Index (PMI) edged up to 50.2 from April's 50.1. The non-manufacturing Purchasing Managers' Index (PMI) edged down to 53.2, from April's 53.4.
 
European indices were trading higher. US Futures were trading in the green.
 

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More tests on Maggi, wrong ads can penalise brand endorsers: Government
The food safety watchdog has taken more samples of Maggi noodles across India for testing after certain harmful substances were allegedly found in a batch in quantities higher-than-permissible-limits, the government said on Monday warning that violation of standards will make even brand ambassadors liable.
 
"FSSAI (Food Safety Standards Authority of India) has taken up the case. It will take action. We have already written to the FSSAI," Food and Consumer Affairs Minister Ram Vilas Paswan said at a press conference here on Monday.
 
He did not elaborate.
 
Clarifying the matter, Consumer Affairs Additional Secretary G. Gurucharan said the food safety authority had taken some samples across India for testing. This was after allegations were made over "dangerous levels" of some substances in the popular snack Maggi noodles in Uttar Pradesh.
 
"Some reports are expected today and within two-three days we will get complete reports. All parameters are being tested," Gurucharan said, adding: "If there is any violation, FSSAI will take action."
 
Asked for his comments over Bollywood actress Madhuri Dixit being served notice by the Food and Drug Administration (FDA) of Uttarakhand for endorsing Maggi noodles, Gurucharan said the brand ambassadors will also be liable if advertisements were found to be misleading.
 
Uttar Pradesh Deputy Food Safety Commissioner Vijay Bahadur had said on May 21 that orders had been issued to Nestle to "look into the quality" of batches of Maggi noodles after some samples were reportedly found to contain higher-than-permissible levels of lead and monosodium glutamate.
 
The samples, authorities in Lucknow said, were taken from a lot in Easy Day departmental store at Barabanki, a district adjoining the state capital, in the second week of May. But Nestle said it was confident over these packs being no longer in circulation in the market.
 
"The company does not agree with the order and is filing the requisite representations with the authorities," Nestle said.
 
The company also sought to dispel rumours that orders had been issued to recall all batches of Maggi noodles. In an e-mail statement to IANS, it said the batch in question had already passed the "best before" date in November last year, and was sure that it had automatically been recalled.

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