GPPL good quarterly show continues. Positive in short to medium term for GPPL
The company’s top-line increased by 26.3% YoY during 1QCY14 to Rs.1,441mn on account of strong volume pick up in both bulk and container front. During the quarter GPPL had included Rs.146mn as take or pay in the revenues in 1 QFY14. Operating margin improves 1,284bps YoY and 111bps to 58.6% mainly on due to higher coal volumes and higher container volumes.
PAT jumps 101.4% YoY to Rs.712mn on the back of strong operating performance. Reported PAT stood at 610 mn on account of 102mn reported as exceptional item (Capex written off on dredging activity).Overall GPPL’s results were above our as well as street estimates and we recommend “ buy” in the stock from short to medium term perspective.
Mozambique recoverable gas estimates revised upwards. Positive in short term for ONGC, BPCL and Oil India.
The recoverable reserves from the gas fields in Mozambique have been revised 43% upwards from the minimum est imated resources to 50-70tcf.Indian oil companies like ONGC, BPCL, and Oil India hold 16%, 10% and 4% stakes respectively in the gas fields. We believe the upward revision of the estimated reserves will likely bring in higher valuation for their respective stakes and will be positive in short term for these companies.
National Economic News
April services PMI improves but still in negative region
The lingering structural constraints and the weak demand due to the polls have tied the April services PMI in the negative territory, though it is a marginal improvement from the previous month.
“The services PMI improved in April, but the reading for both activity and new business flows remained below 50. The weak growth backdrop is the result of the lingering structural constraints, which may only be lifted very gradually after the elections,” HSBC chief economist Leif Eskesen said.
World Economic News
U.S. Trade Deficit narrows in March amid rebound in Exports
With the value of exports rebounding after showing a notable decrease in the previous month, the U.S. trade deficit narrowed in the month of March to $40.4 billion from a revised $41.9 billion in February. Economists had been expecting a deficit of about $40.5 billion compared to the $42.3 billion deficit originally reported for the previous month. The narrower deficit reflected a rebound in the value of exports, which jumped 2.1% to $193.9 billion in March from $190.0 billion in February.
China Services PMI eases to 51.4 in March
Activity in China’s services sectors continued to expand in April, albeit at a slower pace. The services PMI came in with a score of 51.4 in April, slowing from 51.9 in March. Business activity and new orders were up at service providers, but down at manufacturers. The composite index came in at 49.5, up from 49.3 in the previous month.
OECD Downgrades 2014 Global Growth Outlook
The OECD trimmed its global growth outlook for 2014 and called for urgent action to further reduce unemployment. OECD projected the global economy to expand 3.4% in 2014, weaker-than the 3.6% growth estimated in November. The growth outlook for 2015 was maintained at 3.9%.