Citizens' Issues
Petrol price hiked by 70 paise a litre from midnight

The price hike was necessitated as international rate for gasoline, against which domestic petrol prices are benchmarked, has risen from $106.93 a barrel at the time of last reduction to $111.59 per barrel

New Delhi: After two rounds of rate cuts last month, petrol price has been hiked by 70 paise per litre on firming international oil rates, reports PTI.

Petrol in Delhi will now cost Rs68.48 per litre compared to Rs 67.78 a litre earlier, state-owned oil companies announced.

The marginal hike in rate follows reductions last month—Rs2.02 per litre on 3rd June and Rs2.46 a litre on 29th June. The twin price cuts followed the massive Rs7.54 per litre increase in rates, the biggest in the history, effected in May.

The latest increase has been “necessitated due to increasing international oil prices and movement in rupee-dollar exchange rate,” Indian Oil Corporation, the nation’s largest fuel retailer, said in a statement.

Average price of the Indian basket of crude is $101.28 per barrel while international petrol price is $111.59 a barrel. The rupee-dollar exchange rate is around Rs55.36 to a dollar.

“At these levels, the oil companies are incurring losses of about Rs1.41 per litre on petrol sales in the domestic market. However, as the price movement is quite volatile, it has been decided that an increase of Rs0.70 per litre ...” it said.

In Mumbai, petrol price has raised by Rs0.88 to Rs74.24 per litre, while it will cost Rs73.61 a litre in Kolkata from today compared to Rs72.74 per litre earlier. Chennai saw a hike of Rs0.89 per litre in price to Rs73.16 a litre.

State-owned oil firms have now abandoned the practice of revising rates of petrol on 1st and 16th of every month and from now on will do so on a random date so as to deter petrol pump dealers building positions.

Petrol pumps at some places run dry as owners stop taking supplies from companies if a reduction in price is anticipated. Similarly, if an increase in rate is expected, pump dealers start hoarding supplies.

IOC said the three state-owned oil marketing firms are projected to lose a record Rs160,000 crore in revenue on sale of diesel, domestic LPG and kerosene, whose rates have not been revised in over a year now.

The price hike was necessitated as international rate for gasoline, against which domestic petrol prices are benchmarked, has risen from $106.93 a barrel at the time of last reduction to $111.59 per barrel.

Value of rupee against the US dollar has also been a big dampener. The rupee has devalued to Rs55.36 to a dollar from Rs54.96 to a dollar, making imports costlier.

IOC said the company had lost Rs1,053 crore during current fiscal on not being able to raise petrol rates in line with the cost in the first two months of current fiscal.

For industry (IOC plus Bharat Petroleum and Hindustan Petroleum) the loss comes to Rs2,323 crore on a commodity whose pricing was freed by the government in June 2010.

“In addition, oil marketing companies are suffering high level of revenue losses on the three sensitive petroleum products, namely diesel, kerosene and cooking gas (LPG),” IOC said in the statement.

Oil firms are losing Rs10.01 a litre on diesel, Rs27.20 per litre on kerosene and Rs319 per domestic LPG cylinder.

“At these rates, it is estimated that under-recovery (or revenue loss) on sale of sensitive products during 2012-13 shall be around Rs86,000 crore (for IOC) and Rs160,000 crore for the industry,” it added.

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Hindustan Unilever reports robust results with 16% increase in net profit

Despite a challenging economic climate and high inflationary pressures, consumers seems to be spending more which has led to a strong performance from Hindustan Unilever

Fast moving consumer goods (FMCG) major, Hindustan Unilever (HUL) reported 14% increase in net sales to Rs6,378.77 crore for the quarter ended 30 June 2012 compared to the corresponding period last year. The company has been reporting steady sales numbers over the last few quarters despite challenging economic conditions. However, if the numbers are anything to go by, once again the consumers are spending money which is a healthy sign of consumer confidence. The company’s domestic consumer business grew 18.7%, led by 9% volume-led growth. The company’s home & personal care division grew by 20.6% while its foods business grew by 10.6%. The net profit for the quarter increased by 16% year-on-year (y-o-y) after considering exceptional items of Rs607.24 crore as well as restructuring cost of Rs2.55 crore.

The company reported its sales growth rate (14%) on par with its historic three-quarter y-o-y growth rate of 15%. Similarly, its operating profit was very robust, at 28% growth when compared to the three-quarter y-o-y growth rate of 30%. Given that the company has produced strong numbers in some of the most challenging times, its return on equity is massive, at 99%, while its valuations seems to be slightly ever expensive, with its market capitalisation quoting at almost 25 times its operating profit. This might seem expensive, but it is the premium that the company commands for steady performance.

Harish Manwani, chairman of Hindustan Unilever, commented, “We have delivered another quarter of strong volume-led growth with an improvement in margins. The environment continues to be challenging in terms of inflation and a general economic slowdown. In this context, we are implementing our strategy with even greater rigour and managing our business dynamically to remain competitive and cost efficient. We continue to drive innovation and execution to strengthen our core business while leading market development in the emerging categories.”

The company’s soaps and detergents division grew 24% which was led by strong performance of Surf and Rin brands. In the soap segment, Dove and Pears continued to drive the premium category while Lux accelerated category’s growth momentum. The Axe brand was extended with launch of the Axe Bar Soap. The segment contributes to nearly 50% of the revenues, which increased by five percentage points, y-o-y from last year.

Personal products, which include skincare and oral care, grew by 17%, led by double digit volume growth. Fair & Lovely, Ponds and Lakme grew well as did Dove shampoo. In the oral care segment, growth was stepped up to double digits. The Pepsodent Expert Protection range with advanced care benefits around whitening and sensitivity was launched towards the end of the quarter. Personal care segment contributes to nearly 29% of the revenues, which is more or less steady from previous year.

The beverages segment was led by strong growth in coffee, with Bru brand leading the premiumisation. Even the tea brands—Taj Mahal as well as Lipton Ice Tea grew well. Beverages chips in 10% of the company’s segment revenues.

Packaged foods grew by 17% driven by core segment. The growth in Kissan was led by volumes with ketchups posting its 11th consecutive quarter of double digit growth. Kwality Walls was helped by the summer and experienced one of the strongest quarters. Packaged foods is the smallest of the segments and makes up 6.76% of company’s segment topline.

Despite the positivity exhibited by the company, inflationary pressures continued with rupee depreciation while costs were managed dynamically through pricing and distribution. Higher competition also meant higher advertising & promotion spend, which increased by 160 basis percentage points to Ra187 crore for the quarter.

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Sensex, Nifty to fall further: Monday Closing Report

 

If the Nifty closes below today’s low, the next support would be 5,060
 
All the Asian indices opened in the negative after a Chinese central bank adviser forecast an economic slowdown and on renewed concern that Greece may not meet its bailout targets, dampening demand for riskier assets. Back home the benchmarks also opened in the red. The Sensex opened 111 points below at 17,048 while the Nifty opened 42 points down at 5,163. 
 
The opening figure of the Sensex was its intraday high while the Nifty hit that level almost immediately at 5,164. As we had mentioned in our Friday’s closing report that the Nifty has to break the range of 5,190 and 5,340 for a reversal. If the market closes below today’s low, we may see the index finding the next support at 5,060. The National Stock Exchange witnessed a volume of 47.62 crore shares.
 
Greece is in a “Great Depression” similar to the American one in the 1930s, the country's prime minister Antonis Samaras told former US President Bill Clinton on Sunday. Samaras was speaking two days before a team of Greece's international lenders arrive in Athens to push for further cuts needed for the debt-laden country to qualify for further rescue payments and avoid a chaotic default.
 
Back home, investors will closely watch political developments as the Nationalist Congress Party (NCP) holds a party meeting today to decide the future course of action on continuing its alliance with the Congress-led United Progressive Alliance (UPA) government. The NCP is upset over what it says the Congress’ unilateral approach in decision making. Party chief Sharad Pawar will hold consultations with senior party colleagues to decide the future course of action. 
 
The weakness on the European opening pulled down the domestic indices further. The Sensex and the Nifty touched their lowest levels since 26 June 2012. Their intraday low was at 16,849 and 5,108. All Asian indices ended in the red. 
 
On the Sensex it was the maximum percentage loss of 1.64% since 16 May 2012 and on the Nifty it was the maximum percentage loss of 1.67% since 1 June 2012. The Sensex closed 281 points lower at 16,877 while the Nifty closed 87 points lower at 5,118.
 
The advance-decline ratio on the NSE was negative at 369:1553.
 
Among the broader indices, the BSE Mid-cap index closed 1.31% lower and the BSE Small-cap index declined 1.14%.
 
All sectoral indices settled lower. The top losers were BSE Metal (down 3.35%); BSE Realty (down 2.87%); BSE Power (down 2.70%); BSE Auto (down 2.40%) and BSE Capital Goods (down 1.97%.
 
Barring Dr Reddy’s Laboratories (up 1.10%) and Cipla (up 0.43%), the remaining 28 stocks on the Sensex ended lower. They were led by Maruti Suzuki (down 5.65%); Sterlite Industries (down 5.19%); Hindalco Industries (down 4.67%); GAIL India (down 4.52%) and BHEL (down 3.95%).
 
The top two A Group gainers on the BSE were—Shriram Transport Finance (up 3.78%) and Indian Bank (up 3.32%).
 
The top two A Group losers on the BSE were—Crompton Greaves (down 9.19%) and Pantaloon Retail (down 7.89%).
 
The top two B Group gainers on the BSE were—SIL Investments (up 13.11%) and 
Maestros Mediline Systems (up 12.61%). The top two B Group losers on the BSE were—Landmarc Leisure (down 15%) and Globus Corporation (down 12.82%).
 
The gainers on the Nifty were Dr Reddy’s Labs (up 1.19%); Cipla (up 0.91%) and ONGC (up 0.76%). The top losers on the index were Maruti Suzuki (down 5.75%); JP Associates (down 4.69%); Sesa Goa (down 4.67%); Sterlite Ind (down 4.66%) and Hindalco Ind (down 4.46%).
 
On the international front, a Chinese central bank adviser has predicted that the nation's expansion may slow down to 7.4% this quarter, adding to concern that the world's second-biggest economy has yet to bottom out. Song Guoqing, an academic member of the People's Bank of China monetary policy committee, also warned that a decline in producer prices along with consumer inflation may hurt investment returns of industrial companies.
 
Meanwhile, a German report over the weekend said that the International Monetary Fund may cut off aid to Greece. A visit by the inspectors from the European Commission, the International Monetary Fund and the European Central Bank—is set to start on Tuesday—to determine the fiscal position of the debt-ridden nation.
 
There is speculation that Spain’s banking sector bailout could widen to include aid for the government, as well. Spain revised down its gross domestic product (GDP) estimates from this year through 2014. Reports also said Spain's Valencia and Murcia regions may seek financial assistance from the government.
 
Ahead of its quarterly monetary policy review, the Reserve Bank of India (RBI) will hold a meeting tomorrow to firm up the policy action against the backdrop of prevailing macro-economic conditions. The RBI is scheduled to announce first quarter review of monetary policy on 31st July. The central bank is widely expected to maintain status quo as inflation at 7.25% in June is above its comfort level of 5-6%.
 
At the time of writing the European indices and the US stock futures were trading in the red.
 
Back home, foreign institutional investors were net buyers of stocks totalling Rs178.11 crore on Friday, whereas domestic institutional investors were net sellers of shares amounting to Rs84.40 crore.
 
Godrej Industries today said it plans to raise up to Rs 405 crore through a rights issue to institutional players. The company will issue up to 1,56,66,734 equity shares of Re1 each with a right, besides an additional allotment of up to 15,66,673 equity shares in case of over subscription. The stock tanked 5.80% to close at Rs231.50 on the NSE.
 
Aurobindo Pharma has received final approval from the US Food & Drug Administration (US FDA) to manufacture and market Metformin Hydrochloride Extended-Release (ER) Tablets USP 500 mg and 750 mg (ANDA 079118).
 
Metformin Hydrochloride ER Tablets are oral anti-hyperglycemic drugs indicated as an adjunct to diet and exercise to improve glycemic control in patients with type-2 diabetes. The annual sale of the product is approximately $230 million. The stock rose 0.05% to close at Rs108.45 on the NSE.

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"Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse sit amet mauris magna, eget condimentum arcu. Nunc sed lacus eget velit " Dr. Anant Phadke

 

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Choose Carefully
Immediate Annuity Rates (%)
Age in Years Tata AIG(%) LIC(%) Max New York Life(%)
21 7.086 - -
21 7.086 - -
21 7.086 - -
21 7.086 - -
21 7.086 - -
21 7.086 - -
21 7.086 - -
21 7.086 - -
21 7.086 - -
21 7.086 - -
21 7.086 - -
Source: Smaller manufacturers for all drugs will have to rely on higher priced local
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Choose Carefully
Immediate Annuity Rates (%)
Age in Years Tata AIG(%) LIC(%) Max New York Life(%)
21 7.086 - -
21 7.086 - -
21 7.086 - -
21 7.086 - -
21 7.086 - -
21 7.086 - -
21 7.086 - -
21 7.086 - -
21 7.086 - -
21 7.086 - -
21 7.086 - -
Source: Smaller manufacturers for all drugs will have to rely on higher priced local

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