Year: 2008

Suzlon Energy A/S, Denmark, the wholly-owned subsidiary of Suzlon Energy, has secured a major contract with Martifer for the delivery of 29 S88-2.l MW turbines, totaling a capacity of 60.9 MW, to projects in Romania.

This order is company’s first wind turbine order in Romania. In addition, the company and Martifer have also signed a contract for wind power development in Portugal, supplying nine S88 turbines between the Baiao and Vila Franca de Xira wind farms for a total 18.9 MW of capacity.

Growth of core sector industries has slowed down to 4.3% in July compared to 7.2% during same month of the last fiscal. For the four month period of April-July 2008, growth was registered at 3.7% compared to 6.6% during the same period last year. The following chart shows the comparison between July-07 and July-08.
However, the growth in July was better than the average growth during the first three months of current fiscal. The main contributor to the growth was coal that grew at 5.5% compared to 1.1% last year. The only other industry to show greater growth on a year-on-year basis was petro products, which grew at 11.8% in July compared to 4.7% last year.

All other core sector industries registered a slower growth compared to July last year, with crude putting the worst show by posting a negative growth of 3% compared to 0.9% last year. Steel was another industry that disappointed with merely 1.9% growth compared to 10.8% last year.

International Crude oil prices have corrected 26% from their July 3 highs on fears of slowing global growth leading to demand destruction.

Subsidies on petrol and diesel are down to Rs2.9/ltr and Rs8.1/ltr, respectively, down from a high of Rs14/ltr and Rs25/ltr. LPG and SKO losses are down 22-25% to Rs262/cylinder and Rs27/ltr. Overall subsidy losses are down 52% from peak level in May-08 to ~Rs91B

If crude stays at US$105-110/bbl for the rest of FY09, annual under-recoveries will come down to Rs1.55-1.60 trillion from over Rs2.0 trillion estimated in early-Jun08, when price hikes and duty cuts were announced. This exactly takes care of Rs400bn unaccounted gap between the Finmin’s bonds allocation vs. Petroleum Ministry’s wish

The rising curve of Inflation for now is moving sideways. For the week ending 23 Aug ’08, headline (wholesale price index, WPI) inflation was 12.34%, in line with market expectations.The decline in the inflation rate this week has been due to w-o-w softening of primary, in particular, vegetable prices. Egg, meat and cereal prices also declined. Within manufactured products, edible oil prices fell.

With inflation softening over the past two weeks and the change of guard at the RBI, expectations have been raised that a rate cut could come soon. However, we do not think so. In over view the RBI should maintain its policy stance until inflation corrects significantly and remains low for a while.