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ITC drops after reporting muted growth in cigarette business revenue

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Capital Market
Last Updated : Jan 21 2015 | 3:45 PM IST

A bout of volatility was witnessed as key benchmark indices recovered from lower level after trimming intraday gains in afternoon trade. Shares of index heavyweight and cigarette major ITC dropped after the company reported a muted sales growth in its main cigarettes business. The market breadth indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, was currently was up 114.56 points or 0.4% at 28,899.23. The BSE Mid-Cap and Small-Cap indices were both in the red. In overseas markets, Chinese stocks led gains in Asian stocks.

Zee Entertainment Enterprises rose after announcing strong Q3 results. Capital goods stocks were mixed. Praj Industries dropped after weak Q3 results.

Earlier, the Sensex and the 50-unit CNX Nifty, had, both surged to record high in morning trade as these key benchmark indices extended initial gains.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 1275.59 crore yesterday, 20 January 2015, as per provisional data.

In the foreign exchange market, the rupee edged higher against the dollar on optimism demand for local assets will increase as plunging oil prices improve India's economic outlook.

Finance Minister Arun Jaitley yesterday, 20 January 2015, said that the success of the Pradhan Mantri Jan Dhan Yojana (PMJDY) is a game changer for the economy as it has provided the platform for direct benefits transfer (DBT) which, in turn, will help in plugging leakages in subsidies and thereby provide savings to the exchequer.

Brent crude futures edged higher amid signs that prices are receiving support around current levels.

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In overseas markets, Asian stocks rose as investors counted on the European Central Bank (ECB) to unveil a government-bond-buying program after a monetary policy review tomorrow, 22 January 2015, aimed at spurring Europe's ailing economy. US stocks eked out small gains after high intraday volatility yesterday, 20 January 2015.

At 13:16 IST, the S&P BSE Sensex was up 114.56 points or 0.4% at 28,899.23. The index jumped 173.43 points at the day's high of 28,958.10 in morning trade, a lifetime high for the index. The index rose 7.90 points at the day's low of 28,792.57 in mid-morning trade.

The CNX Nifty was up 27.10 points or 0.31% at 8,722.70. The index hit a high of 8,741.85 in intraday trade, a lifetime high for the index. The index hit a low of 8,689.60 in intraday trade so far.

The BSE Mid-Cap index was off 26.20 points or 0.24% at 10,701.61. The BSE Small-Cap index was off 39.31 points or 0.34% at 11,406.96. Both these indices underperformed the Sensex.

The market breadth indicating the overall health of the market was negative. On BSE, 1,644 shares declined and 1,148 shares advanced. A total of 104 shares were unchanged.

Shares of index heavyweight and cigarette major ITC dropped after the company reported a muted sales growth in its main cigarette business. The stock was off 2.46% at Rs 362. The stock hit high of Rs 373.60 and low of Rs 360.10 so far during the day. The company's net profit rose 10.46% to Rs 2635 crore on 2.47% growth in total income from operations (net) to Rs 8942.59 crore in Q3 December 2014 over Q3 December 2013. Segment wise results showed that sales of the cigarette division rose 0.62% to Rs 4141.94 crore in Q3 December 2014 over Q3 December 2013. Sales of the FMCG business jumped 11.37% to Rs 2314.12 crore in Q3 December 2014 over Q3 December 2013. ITC announced the third quarter results during market hours today, 21 January 2015.

Capital goods stocks were mixed. ABB (India) (up 0.23%), BEML (up 1.88%), Alstom India (up 0.21%), Havells India (up 0.31%) and Siemens (up 1.4%) gained. Bharat Heavy Electricals (Bhel) (down 0.2%), Thermax (down 1.13%), and Punj Lloyd (down 2.24%) declined.

L&T edged higher on renewed buying. The stock was up 1.9% at Rs 1,659.25. The stock hit a high of Rs 1,665 and a low of Rs 1,632 so far during the intraday trade.

Crompton Greaves rose 0.88% after the company bagged $26 million contract from Indonesia for supplying power equipment. The company announced the order win after market hours yesterday, 20 January 2015.

Praj Industries lost 4.4% on weak Q3 results. The company's consolidated net profit fell 49.3% to Rs 12.30 crore on 18.3% decline in total income to Rs 224.46 crore in Q3 December 2014 over Q3 December 2013. Praj Industries' consolidated order backlog as on 31 December 2014 stood at Rs 1050 crore. The result was announced after market hours yesterday, 20 January 2015.

Zee Entertainment Enterprises rose 1.59% to Rs 397 after announcing strong Q3 results. The stock hit high of Rs 398.70 and low of Rs 384.65 so far during the day. The company's consolidated net profit rose 44.48% to Rs 308.61 crore on 17.73% rise in total income to Rs 1443.90 crore in Q3 December 2014 over Q3 December 2013. The result was announced during market hours today, 21 January 2015.

In the foreign exchange market, the rupee edged higher against the dollar on optimism demand for local assets will increase as plunging oil prices improve India's economic outlook. The partially convertible rupee was hovering at 61.585, compared with its close of 61.70 during the previous trading session.

Brent crude futures edged higher amid signs that prices are receiving support around current levels. Brent for March settlement was up 34 cents at $48.33 a barrel. The contract declined 85 cents, or 1.74%, to settle at $47.99 a barrel during the previous trading session.

Finance Minister Arun Jaitley yesterday, 20 January 2015, said that the success of the Pradhan Mantri Jan Dhan Yojana (PMJDY) is a game changer for the economy as it has provided the platform for direct benefits transfer (DBT) which, in turn, will help in plugging leakages in subsidies and thereby provide savings to the exchequer. As against the original target of opening bank accounts for 7.5 crore uncovered households in the country by 26 January 2015, banks have already opened 11.50 crore accounts as on date 17 January 2015 under PMJDY after conducting survey of 21.02 crore households in the country. Jaitley further said that so far 19 schemes out of 35 DBT schemes have been rolled-out across the country, including MGNREGS in 300 districts. The Finance Minister said that the state governments have also been requested to transfer cash/benefits directly in the bank accounts of beneficiaries thereby cutting layers in the delivery process.

Meanwhile, the Ministry of Commerce & Industry today, 21 January 2015, said that Vietnam's Deputy Prime Minister Hoang Trung Hai while meeting an Indian delegation to Vietnam led by Rajeev Kher, Secretary, Ministry of Commerce, Government of India, has expressed his pleasure at the blossoming of trade and economic relations and his confidence that India and Vietnam would be able to achieve the target of bilateral trade of $15 billion by 2020. He noted that there is great potential for trade and investment cooperation in textiles, agriculture, pharmaceuticals, leather, energy and oil and gas, and invited Indian companies to invest in Vietnam.

Asian stocks edged higher today, 21 January 2015, as investors counted on the European Central Bank (ECB) to unveil a government-bond-buying program after a monetary policy review tomorrow, 22 January 2015, aimed at spurring Europe's ailing economy. Key benchmark indices in China, Hong Kong, Indonesia, South Korea, Singapore and Taiwan were up 0.15% to 4.74%. Japan's Nikkei Average fell 0.49%.

At the end of a two-day monetary policy review, the Bank of Japan (BoJ) today, 21 January 2015, cut its near-term inflation outlook and left its key easing policy unchanged, citing brighter economic growth that could eventually help put prices back on a firm upward path. The BoJ sharply raised its view on growth adjusted for inflation, expecting gross domestic product to rise 2.1% in fiscal 2015 and 1.6% the following year. But it cut its forecast for the year ending in March to a 0.5% contraction from the previous 0.5% expansion.

Trading in US index futures indicated that the Dow could fall 39 points at the opening bell today, 21 January 2015. US stocks eked out small gains after high intraday volatility yesterday, 20 January 2015. In economic news, a gauge of confidence among home builders ticked down this month by one point to 57, staying close to the highest level since late 2005, according to National Association of Home Builders/Wells Fargo data. Readings above 50 signal that builders, generally, are optimistic about sales trends.

In Europe, the governing council of the European Central Bank (ECB) is scheduled to undertake monetary policy review tomorrow, 22 January 2015. The ECB may announce a large-scale bond-buying program tomorrow, 22 January 2015, aimed at spurring Europe's ailing economy.

Meanwhile, uncertainties over the status of Greece including its possible exit from the eurozone are likely to persist until the early election in the country on 25 January 2015. Greece is set to hold snap elections on 25 January 2015 after it failed to elect a new president in a third round of voting late last year. The Greek leftist opposition party Syriza leads opinion polls ahead of national elections on 25 January 2015. Syriza has demanded debt relief from the eurozone and promised to roll back the austerity and reform measures that the country has undertaken in exchange for the international bailout that the government negotiated in 2012.

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First Published: Jan 21 2015 | 1:15 PM IST

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