Budget 2012 have levered strong growth

Budget 2012 have levered strong growth for power sector by proposing
numerous policies in their favor. Giving relief to power producers, FM
Mr.Pranab Mukherjee granted them duty-free imports of coal and LNG,
extended tax breaks for new projects and allowed power projects to
retire part of their rupee debt and replace it with foreign borrowing,
which is much cheaper even after hedging costs. This would also
increase the ability of domestic banks to lend to the sector without
exceeding their exposure limits. Progressive measures, like increasing
the tax-free bond limit for power sector, reduction of withholding tax
from 20% to 5%, exemption on customs duties for import of thermal
fuels for power plants, will go a long way in reducing financial
burden, which will benefit both the suppliers as well as the consumers
of power. The sector has also been allowed enhanced depreciation on
selected items.

With FM Mr.Pranab Mukherjee reviving hopes for power, it is
undoubtedly one of the most promising sectors to look forward to.Insighttechnical recommend it's best picks from power sector for long term investment.

NEYVELI LIGNITE CORPORATION (513683)
Current: 87 Target: 120 in 4 months

NLC is a government-owned power generating company having its own
lignite mining company. It is recently announced as “Navratna” by
Government of India in April 2011. NLC spreads over an area of around
54 square km, comprising Neyveli Township and temporary colonies
around 32 blocks. The company runs the biggest open-pit lignite mines
in India and mines around 2.4 Crore tonnes of lignite annually for
fuel, with an installed capacity of 2490 MW of electricity per annum.
Neyveli Lignite Corporation reported a net profit of Rs 184.94 Crore
in the October-December quarter of FY12, a growth of 92.5% as compared
to Rs 96.07 Crore in a year ago quarter.Net sales rose 20.3% to Rs
1,045.99 Crore from Rs 869.21 crore year-on-year.
The Company has 50% joint venture with Tamil Nadu Electricity Board
and it’s announced its plans to invest about Rs.36, 900 Crore on power
generations and mining capacity augmentation by 2017. The plan also
includes development of power projects using other fuel feed. The
company is also planning to invest Rs.40,200 Crore to build power
plants in Tamil Nadu, Rajasthan and Uttar Pradesh. Strong expansion &
diversification plans to explore coal-based, wind and solar power
generation projects will add on strength to the cashbook. The coal
priced has risen, due to which Central Govt. has forced SEB to
increase Electricity Power tariff by 25-30%. This will directly
benefit NLC for ownership of their mines.
We recommend ‘BUY’ on the stock at CMP Rs. 86 with a target price of
Rs. 120 in 4 months.For more visit http://www.insighttechnical.net or call us on +919822226867

Insightt: EQUITY MARKET UPDATES

Insightt: EQUITY MARKET UPDATES: The year 2012 started on an extremely bullish note and took almost everybody by surprise. After a splendid January, equity markets continue...

EQUITY MARKET UPDATES

The year 2012 started on an extremely bullish note and took almost everybody by surprise. After a splendid January, equity markets continued their climb against the wall of worries right through February. Despite the persistent “Yes”/“No” toggle on the European solution on Greece's bailout and across the- board demotion of Euro-credits by the rating agencies, the markets supported risky assets as the European Central Bank (ECB) and Bank of Japan (BoJ) signaled continued easing and economic data from the US sustained its positive momentum. While the deluge of liquidity has ignited a rally in risk assets, the concerns about solvency crisis and impact of deleveraging process on the real economy and financial markets remain. Economic indicators in India displayed continuation of moderation in the growth momentum: GDP growth for quarter ending December 2011 at 6.1% y-o-y was lower-than-expected. Yet the Sensex rallied and Nifty gained almost 20%. The BSE midcaps and small caps outperformed their large cap counterparts .The liquidity inflows from foreign institutional investors (FIIs) have been a major driver of the current sharp rally in the Indian equity markets. Many measures like PSU disinvestments', increase in Foreign debt limits to attract foreign flows (both equity and debt) were also initiated by the government.

Insightt: RBI has reduced the CRR rate by a steep 75bps to ...

Insightt: RBI has reduced the CRR rate by a steep 75bps to ...: While the CRR cut was much along our expected line the quantum i.e. a 75bps cut (against our expectations of 50bps) has come in as a big +v...

RBI has reduced the CRR rate by a steep 75bps to 4.75%

While the CRR cut was much along our expected line the quantum i.e. a 75bps cut (against our expectations of 50bps) has come in as a big +ve surprise.Through 50bps CRR cut in its third quarter monetary policy review + on-going OMO operations since Nov, 2011, RBI had already infused liquidity to the tune of Rs1.5tn (2.4% of NDTL) into the system. The recent CRR cut would further infuse liquidity by Rs480b.Through 50bps CRR cut in its third quarter monetary policy review + on-going OMO operations since Nov, 2011, RBI had already infused liquidity to the tune of Rs1.5tn (2.4% of NDTL) into the system. The recent CRR cut would further infuse liquidity by Rs480b. A prolonged period of substantially higher WPI inflation had restricted the central bank from easing its monetary stance. This in-turn had affected the non-food credit growth which remained fragile at 15.5% as at Feb 10th, 2012.We do not expect banks to immediately reduce their lending rates as they would like to wait for any reduction in policy rates. Resultantly, this will have positive impact on bank NIMs to the tune of ~7-10bps.
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Insightt: Insight Technical's Latest report on Power Sector

Insightt: Insight Technical's Latest report on Power Sector: After August 2011, the market is back to 18k level with strong  upswing movement.  Factoring the firm global cues with high inflow of inv...

Insight Technical's Latest report on Power Sector

After August 2011, the market is back to 18k level with strong 
upswing movement.  Factoring the firm global cues with high inflow
of investors in market, Sensex is expected to continue this upward rally.
As per research, power sector is a lucrative stream to invest with a long
term view.With Government of India working to boost power sector, 
Coal India will sign by March end agreements for supply of fuel to 
power projects commissioned up to December 2011.The Government 
has forced SEB’s to increase power tariff by 25-30%.This step of Govt
has provided huge relief to companies in power generation companies.
According to sources,there may be another price hike of 20-25% within
a period of 2 years.For the 12th plan, Power companies capital expenditure
is expected to be around Rs.100, 000-120,000 crore in which about 52,000 km of
transmission lines,70 sub-stations and transmission capacity of1,36,000 MVA.
The Government of India being  keen on infrastructural development for economic
development, power is the leading sector to be further developed.Going by the recent 
development, we expect Powergrid, NHPC, REC, Neyveli Lignite to report healthy
set of results on the backof higher capitalization and higher capacity addition. We 
expect an average post of 20-25% increase in revenue and profit Y-o-Y.
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