Picking Stocks: These 7 Examples Show Why Operating Cash Flow Is More Important than Net Profit
Operating cash flow (OCF) is the key to understanding how well a company is doing. It defines whether, and how much of, the revenues are getting converted to cash. However, most investors lean towards net profit (NP) as the primary metric of a company’s performance. Why? 
 
One of the main reasons is that OCF numbers are provided once in a year while the net profit numbers are...
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Nifty, Sensex Under Pressure – Weekly closing report

We had mentioned in last Friday’s closing report that Nifty, Sensex would try to push higher. The major indices of the Indian stock markets closed up over the week. The trends of the major indices in the course of the week’s trading are given in the table below:

 

 
The major indices of the Indian stock market rallied and ended Monday with gains over last Friday’s close. On the NSE, there were 956 advances, 782 declines and 346 unchanged.
 
The key Indian equity indices of the S&P BSE Sensex and the NSE Nifty50 touched fresh record levels Monday, supported by firm global cues and a recovery in the domestic currency. Both the BSE Sensex and the Nifty50 of the National Stock Exchange touched new all-time highs of 38,281.70 points and 11,551.85 points, respectively, surpassing their previous benchmarks of 38,076.23 and 11,495.20 points. Buying activity was witnessed in capital goods, auto and oil and gas stocks.
 
The major indices of the Indian stock markets were range-bound on Tuesday and closed with minor gains over Monday’s close. On the NSE, there were 892 advances, 926 declines and 76 unchanged.
 
The key Indian equity indices ended at fresh record closing levels on Tuesday with nominal gains amid a largely choppy trade. The trade was tepid as traders booked profits after the indices hit record levels earlier in the day, analysts said. Both the S&P BSE Sensex and the Nifty 50 on the National Stock Exchange touched new all-time intra-day highs of 38,402.96 points and 11,581.75 points respectively. However, broadly negative Asian markets along with investors' fears over rise in trade protectionist measures and high crude oil prices subdued the key indices later in the day. Conversely, a strengthened rupee against the US dollar during the intra-day aided the key indices to arrest the slide. It strengthened to an intra-day high of 69.53 to a greenback. Buying activity was witnessed in healthcare, IT (information technology) and capital goods stocks. However, selling pressure on consumer durables and metal stocks limited the gains.
 
The scrip of Jet Airways traded lower on Tuesday after reports claimed that the government has initiated a probe against the airline. However, in a regulatory filing to the BSE, the airline said that it has not received any communication in this regard from the Ministry of Corporate Affairs (MCA). The stock exchange had sought a clarification from Jet Airways on reports which claimed that the MCA has commenced a probe against Jet Airways on suspicion of siphoning off of funds.
 
Wednesday was a stock market holiday.
 
The major indices of the Indian stock markets were range-bound on Thursday and closed with gains over Tuesday’s close.  On the NSE, there were 785 advances, 967 declines and 322 unchanged.
 
The key Indian equity indices - S&P BSE Sensex and the NSE Nifty50 - traded on a positive note on Thursday. However, broadly negative Asian markets due to investors' fears over a rise in trade protectionist measures had subdued the key indices. According to market observers, buying in capital goods, healthcare and IT (information technology) counters arrested the slide and supported the market's upward movement.
 
Jet Airways said that its Board will consider the unaudited financial results for the quarter ended June 30, 2018 on August 27. According to a BSE filing, the "Audit Committee and the Board of Directors" will, inter-alia, take up the matter in relation to the cost reduction initiatives and turnaround plan. The airlines management had earlier sought time and deferred the consideration of unaudited financial results for the first quarter of the current financial year 2018-19. On August 9, the company in a BSE filing said: "...Board of Directors of the Company, at its meeting held today (Thursday), deferred the matter of consideration of the unaudited financial results for the quarter ended 30 June, 2018." "It may be noted that the Audit Committee did not recommend the said financial results to the Board for its approval, pending closure of certain matters," it added. Recently, the airline said that it is regular in all its payment obligations to bank and statutory dues including PF obligations. It had pointed out that no differences of opinion existed between the company and its statutory auditors and that the airline has been working on various cost and revenue initiatives to mitigate the significant increase in fuel rates and depreciation in rupee. 
 
Dr Reddy's received establishment Inspection report (EIR) from the US FDA for its API Srikakulam Plant (SEZ), Andhra Pradesh, indicating closure of the audit. The audit on this facility was conducted by USFDA in June 2018. 
 
The Larsen & Toubro Board approved proposal to buyback six crore equity shares at a maximum price of Rs1,500 per equity share for an aggregate amount of Rs9,000 crore. 
 
Commercial vehicles major Ashok Leyland Ltd announced bagging a defence tender in the tracked vehicle space. In a statement issued here, the company -- the largest supplier of wheeled military vehicles to the Indian Army -- said it will collaborate with the Combat Vehicles Research and Development Establishment (CVRDE), Chennai for the manufacture, assembly and testing of a lightweight clutch for the design and development of weight optimized 1500 hp Automatic Transmission for Main Battle Tanks. According to Amandeep Singh, Head (Defence) in Ashok Leyland, the tender win marks yet another milestone of starting work on tracked vehicles that Indian soldiers use. "We are proud that we are the only vehicle manufacturer in India having indigenously designed, developed and manufactured power packs beyond 350 hp. The tracked combat vehicle opportunity also exists in several other countries which use Russian-made combat vehicles," Singh was quoted as saying in the statement. The statement was silent on the value of the tender.
 
Reliance Communications (RCOM) Bondholders have approved the "Tender and Exchange" offer of $300 million Bonds, the company said. According to the company, the offer got the approval of an overwhelming majority of over 83% of Bondholders at a meeting held in London. "Pursuant to the offer as approved, the Bondholders will receive cash proceeds of up to $118 million," the company said in a statement. "The Bondholders will also get $55 million Bonds to be issued by Global Cloud Xchange Limited (holding Company of GCX), a foreign subsidiary of RCOM."
 
In a partial relief to Cyrus Mistry, the National Company Law Appellate Tribunal (NCLAT) on Friday stated that Tata Sons cannot force him to sell his shares. However, the two-judge bench headed by Justice S.J. Mukhopadhyaya, declined Mistry's appeal to stay the conversion of Tata Sons into a private company. The court said it will decide on conversion of Tata Sons into a private company after the final hearing on September 24. Further, NCLAT has admitted Mistry's appeal against his removal from the post of Tata Sons' Chairman in 2016. The appeal was against the order of the NCLT, Mumbai bench.

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