Mumbai property tax: BMC extends deadline till 30th September

Following an uproar about the flawed methodology of calculating property tax, the BMC has now extended the last date for paying tax by three months

Municipal Corporation of Greater Mumbai (MCGM) or BrihanMumbai Municipal Corporation (BMC) has extended the last date to file property tax to 30th September. As per the previous order, the last date for paying property tax was 30 June 2013. When contacted, the official at the public relations department at BMC confirmed the extension.


As reported earlier, Moneylife Foundation has conducted several seminars and counselling sessions on the property tax issue affecting Mumbaikars, ever since the MCGM sent out demands for its hefty revised property taxes with arrears for the past three years. Anomalies in computation and the hefty new taxes have caused serious concern for home and property owners. The new taxes carry the threat of hefty penalties for non-payment; however after public outrage over the short time allocated to pay up, the MCGM deferred tax payment deadline from March to June.


Several persons had called us at Moneylife and were calling property experts to find out whether they are obliged to pay by 30 June 2013. All such people can now pay the tax until September end.


When the revised property tax notices were sent out, several organisations, including the Property Owners Association had announced plans to move court, but we find that none of the cases has been filed yet.


Sensex, Nifty in a strong rally mood: Friday Closing Report

The market is likely to remain bullish for the next few days

The economic reforms, which were announced on Thursday, and the strengthening rupee helped the market settle over 2.5% higher and in the green for the second day. The market is likely to remain bullish for the next few days. The National Stock Exchange (NSE) registered a volume of 68.27 crore shares and advance-decline ratio of 1023:382.


The market opened higher on support from the oil & gas sector following the Cabinet Committee on Economic Affairs approving a hike in gas prices with effect from April 2014. Support from the Asian markets which were in the positive in morning trade also boosted investor sentiment.


The Nifty opened 68 points higher at 5,750 and the Sensex started the day at 19,093, a jump of 217 points over its previous close. The opening figures on the Nifty and Sensex were their intraday lows. Gains in oil & gas stocks and the strengthening of the rupee against the dollar pushed the benchmarks higher as trade progressed.


The upmove continued in the noon session on a rally in metal, capital goods, power, PSU, banking, auto and oil & gas stocks. A positive opening of the key European markets also supported the sentiments back here.


Economic reforms announced on Thursday, the lower CAD and the strengthening rupee led the market to its high in the last half hour of trade. The Nifty rose to 5,853 and the Sensex climbed to 19,433 at their respective highs.


The market settled marginally off the highs and in the green for the second day in a row. The Nifty closed 160 points (2.81%) at 5,842 and the Sensex jumped 520 points (2.75%) to 19,396.


In line with the Sensex, the broader indices also ended higher. The BSE Mid-cap index surged 2.26% and the BSE Small-cap index climbed 1.37%.


Today’s rally saw all sectoral gauges settling in the green. The top gainers were BSE Metal (up 4.70%); BSE Power (up 4.15%); BSE Capital Goods (up 4.03%); BSE PSU (up 3.52%) and BSE Oil & Gas (up 3.37%).


Out of the 30 stocks on the Sensex, 29 stocks settled higher. The chief gainers were Jindal Steel & Power (up 7.89%); BHEL (up 6.90%); Tata Power (up 5.71%); Coal India (up 5.58%) and Sterlite Industries (up 5.23%). Hindustan Unilever (down 0.67%) was the lone loser on the index.


The top two A Group gainers on the BSE were—IFCI (up 17.79%) and Piramal Enterprises (up10.81%).

The top two A Group losers on the BSE were—Gitanjali Gems (down 9.99%) and MMTC (down 4.99%).


The top two B Group gainers on the BSE were—Simran Farms (up 20%) and Indo Borax Chemicals (up 20%)

The top two B Group losers on the BSE were—JMD Telefilms (down 19.82%) and Unisys Softwares & Holding Industries (down 19.78%).


Of the 50 stocks on the Nifty, 47 ended in the in the green. The major gainers were JSPL (up 7.40%); BHEL (up 7.33%); Reliance Infrastructure (up 6.53%); BPCL (up 6.32%) and Tata Power (up 6.20%). The losers were HCL Technologies (down 2.81%); Ranbaxy Laboratories (down 2.39%) and Hindustan Unilever (down 0.54%).


Markets across Asia settled firm on positive economic news from Japan and speculations that the US Fed will not take a decision of scaling down its bond buying programme any time soon.


The Shanghai Composite advanced 1.50%; the Hang Seng surged 1.78%; the Jakarta Composite climbed 3.06%; the KLSE Composite advanced 1.25%; the Nikkei 225 jumped 3.51%; the Straits Times gained 1.04%; the Seoul Composite surged 1.56% and the Taiwan Weighted settled 2.26% up.


At the time of writing, the key European indices pared initial gains and were in the red while the US stock futures were trading with small gains.


Back home, foreign institutional investors were net sellers of shares totalling Rs1,043.27 crore on Thursday. On the other hand, domestic institutional investors were net buyers of equities amounting to Rs358.38 crore.


Hyderabad-based Suven Life Sciences has secured two product patents, one from Japan and another from the US, corresponding to its new chemical entities (NCEs) for the treatment of neurodegenerative diseases. The patents are valid through 2028 and 2029. The stock surged 5.36% to Rs24.55 on the NSE.


State-run power producer NTPC has tied up with German entity KfW for a fixed interest term loan facility of Euro 95 million (about Rs 738 crore). The loan facility would be utilised to part-finance the capital expenditure on renovation and retrofitting of electro static precipitators at various generation stations of NTPC to reduce the fly ash emissions. The stock gained 2.67% to close at Rs144.05 on the NSE.


McNally Bharat Engineering on Friday said that it received an order worth Rs265 crore from National Buildings Construction Corporation for the construction of housing units at NTPC’s Pakri project in Hazaribag district of Jharkhand. McNally Bharat surged 5.41% to close at Rs45.75 on the NSE.


Bajaj Auto not optimistic on the Indian economy, finds Nomura

Bajaj Auto expects the Indian automotive industry to go through turbulent times in the coming year while Nomura’s outlook on the company is ‘neutral’ and believes that the stock is worth Rs1,966

Bajaj Auto, even though fundamentally strong, expects the two-wheeler industry to remain under pressure, according to Nomura Equity Research (Nomura), in its annual report analysis to clients. Even its exports have been flat, with increased sales to Africa offset by lower sales in Asia, especially in Indonesia, and the Middle-East. According to the Nomura report, “The company is not so optimistic on India’s economic growth in FY14F and believes that though growth has possibly bottomed out, incremental growth will be very modest.” The brokerage is currently ‘neutral’ on the company’s prospects in the next 12 months and believes Bajaj Auto is worth Rs1,966 per share.

Bajaj Auto’s year-on-year (y-o-y) net sales have been weak in the last three quarters, growing by a mere 2% average. According to the annual report, Bajaj Auto sold 4.24 million units versus 4.35 million units in the previous year. Yet, according to Nomura, the company expects 8%-10% volume growth in FY14. Bajaj Auto’s operating profit dipped by 2% in the latest quarter, while its three-quarter y-o-y average growth rate is just 1%. Indeed, it is a difficult environment. However, its return on net worth and return on capital employed continue to remain very high, at 39% and 43% respectively. Nomura has stated: “We note that RoEs are suppressed by increasing cash balances—core RoEs are much higher. FY13 EBITDA margin dipped by around 70 basis points (bps) due to negative operating leverage.” According to Moneylife research, Bajaj Auto’s valuation is pricey, with its market capitalisation quoting at over 15.46 times operating profit.

With a deteriorating rupee, Bajaj Auto will expect some incremental revenue from exports but also has to protect its downside. It has hedged foreign exchange contracts worth $900 million as on 31 March 2013, which translates to 60% of its revenues, according to Nomura. Nomura expects that exports to Africa will be the key to Bajaj Auto’s performance in FY14, given that much of the Western world and Asian markets are already under pressure. Africa accounts for nearly half of Bajaj Auto’s total export volumes, surprisingly with a volatile Nigeria being a key market. The report also stated: “Volumes in Asia and the Middle East region declined by 22% y-o-y in FY13 led by a sharp decline in the Sri Lanka market due to increase in import duties. Meanwhile, volumes in the Latin American market (largely Columbia) increased by 9% y-o-y helped by the launch of Pulsar 200NS and Discover 125ST.”

However, a worrying point is Bajaj Auto’s performance in Indonesia, which has taken a hit as sales volumes declined 50% to 11,000 units in FY13. The report said, “Consequently, PBT (profit before tax) loss of the subsidiary increased to Rs24 crore in FY13 from Rs12 crore in FY12.

Nomura also finds that the company’s cash flow has become a little tighter, but not anywhere near unmanageable levels. Its analysis of the company’s annual report yielded the following observations:

  • Operating cash flows in FY13 were around Rs2,100 crore, down from Rs3,200 crore in FY12 due to increase in working capital;
  • Working capital days (ex-provisions) increased to 8 days in FY13 as compared to negative 2 days in FY12;
  • During the year, the company incurred capex of around Rs510 crore (Rs170 crore in FY12) largely due to Rs270 crore spend in vehicles & aircraft segment. Capex in plant & machinery was Rs130 crore. Nomura expects annual capex of Rs300 crore in FY14-15F.

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