A light results season

SMARTSHARE

This is not the usual result season that we customarily see every quarter. Only eight of the 30 Sensex stocks will present their quarterly report card in April. If you extend the list a little further to the F&O segment, then only 22 per cent of the 154 stocks in the list are slated to release their numbers in the April settlement.

Companies that want to present their audited accounts can do so in two months, that is by May 31. And because the majority of the corporates follow the April-March accounting period, companies can seek a further extension to present their results in June along with audited annual accounts. So by the time the last of the March quarter results trickle in by June 30, Gopalakrishnan will be ready with the Infosys June numbers, in a week after that.

Barring the IT companies that habitually present their numbers in April, irrespective of their performance, among the others it can be said that results that line up early are usually good while the laggards like to hide in the crowd. So April could turn out better than March.

Another event that is lined up next is RBI's credit policy. But the remarkable resilience, which the markets demonstrated last Thursday, shows that the markets hope Dr Reddy is not going to further tighten the screws.

I am not very sure whether this assumption is right. But then Dr Reddy is not someone who is ceremonious. Gone are the days when the RBI governor would make his bi-annual speech and then would go into hibernation like a bear.

But then Dr Reddy is a different creature and this is not winter-time either. Some trouble and Dr Reddy might get his scalpel out and do a quick surgery even without caring to apply anesthesia (read: forewarning).

The appreciating rupee has hurt exporters but has helped the cause of the oil marketing companies. Other things being equal, they tend to benefit as their cost of importing crude comes down.

The dollar depreciated from Rs 44.68 on March 5 to Rs 42.07 on April 19. This depreciation was a huge 5.84 per cent. Crude oil, on the other hand, appreciated from $60.07 to $61.81 in the same period. This works out to a little under 3 per cent. That means the cost of crude imports would have been lower as the rate of appreciation in the rupee was higher than the rate of appreciation of crude oil.

But wait before you celebrate.

The cost of the Indian basket, which averaged $56.53 in February, has bloated to $65.92 in April, a rise of 16 per cent. Don't scratch your heads on this one "" here's an explanation.

Unless otherwise specified, crude refers to the WTI (West Texas Intermediate), which is light sweet crude oil with a sulphur content of less than 0.5 per cent. This is traded on the Nymex and serves as a benchmark for all other crude prices.

The Brent Crude Oil refers to the North Sea oil, which has a slightly higher sulphur content than 0.5 per cent and is traded in London. Historically, the Brent has quoted at a discount to the WTI crude of Nymex. The last three years' average discount is around $1.65 a barrel.

From February 13, this discount began to diminish and completely vanished by February 28. And then it started appreciating against the WTI. The crescendo was reached on April 11, when the Brent quoted at a premium of $5.83 to the WTI. On April 19, the premium was still $3.83.The Indian crude basket is more related to the Brent and, therefore, has seen a higher appreciation.

One of the reasons for this reversal of fortunes is that the Cushing area, where the WTI is delivered, has seen stock piling due to seasonal maintenance of the refineries. Is the benchmark losing its place under the sun? At present it does not look like it, as the Open Interest in the WTI has not reduced and Brent OI has not seen a rise.

So far, fortunately, neither Dalal Street nor its usually attentive TV editors have noticed the changing fur of crude.