Key indices languished in the red and continued to hover in a narrow range in negative terrain in early afternoon trade. At 12:20 IST, the barometer index, the S&P BSE Sensex, was down 88.24 points or 0.3% at 29,558.40. The Nifty 50 index was down 24.10 points or 0.26% at 9,179.35. Sentiment was subdued after data showed after market hours yesterday, 12 April 2017 that industrial production contracted in February and consumer price inflation edged up in March.
Infosys declined after announcing Q4 results. Metal and mining stocks dropped. Most realty stocks gained.
The BSE Mid-Cap index was up 0.12%. The BSE Small-Cap index was up 0.61%. Both these indices outperformed the Sensex.
The breadth, indicating the overall health of the market, was positive. On the BSE, 1,509 shares rose and 1,071 shares fell. A total of 124 shares were unchanged.
Metal and mining stocks dropped. Jindal Steel & Power (down 2.48%), Vedanta (down 3.62%), Tata Steel (down 1.55%), NMDC (down 2.28%), Hindalco Industries (down 3.13%), Steel Authority of India (down 0.78%), JSW Steel (down 2.11%), and National Aluminium Company (down 0.75%) edged lower. Bhushan Steel (up 2.29%) and Hindustan Zinc (up 0.37%) gained.
Most realty stocks rose. DLF (up 0.13%), D B Realty (up 0.66%), Sobha (up 4.56%), Indiabulls Real Estate (up 1.42%), NBCC (up 0.84%), and Housing Development & Infrastructure (HDIL) (up 0.88%) edged higher. Unitech (down 0.53%), Godrej Properties (down 0.13%) and Oberoi Realty (down 0.72%) declined.
IT major Infosys fell 2.19% after the company reported weak Q4 March 2017 results before market hours today, 13 April 2017. Infosys' consolidated net profit fell 2.8% to Rs 3603 crore on 0.9% decline in revenues to Rs 17120 crore in Q4 March 2017 over Q3 December 2016. Consolidated operating profit fell 2.8% to Rs 4212 crore in Q4 March 2017 over Q3 December 2016.
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The company said its consolidated revenue is expected to grow 6.5%-8.5% in constant currency terms in the fiscal year ending 31 March 2018, under IFRS.
The company said its revenue is expected to grow 2.5%-4.5% in Rupee terms in the fiscal year ending 31 March 2018, under IFRS, based on the exchange rates as of 31 March 2017.
The company said its revenue is expected to grow 6.1%-8.1% in Dollar terms in the fiscal year ending 31 March 2018, under IFRS, based on the exchange rates as of 31 March 2017.
Infosys' CEO, Dr. Vishal Sikka, said that unanticipated execution challenges and distractions in a seasonally soft quarter affected the company's overall performance. At the same time, Infosys continued to see many positive signs of its strategy execution; its software-led offerings continued to show strong momentum and client success, with continued adoption of Mana, AI platform; Zero Distance marked its 2-year anniversary as a grassroots cultural movement for innovation with IFRS - INR strong client resonance, and the company's employee engagement continued to drive down attrition, especially with top performers.
Attrition declined during the quarter reflecting the company's focus on better employee engagement. Utilization during Q4 reached 82% which is the highest in Q4 over the past several years, said U. B. Pravin Rao, COO.
In FY2017, operating margins were steady as the company continued its sharp focus on operational efficiencies. Cash provided by operating activities during the year was robust and exceeded $2 billion, a new high, said M. D. Ranganath, CFO. The company's capital allocation policy is aimed at balancing the strategic and operational needs of the company as well as enhancing shareholder returns.
The board reviewed and approved a revised Capital Allocation Policy of the company after taking into consideration the strategic and operational cash requirements of the company in the medium term.
The key aspects of the Capital Allocation Policy are that the company's current policy is to pay dividends of up to 50% of post-tax profits of the financial year. Effective from financial year 2018, the company expects to payout up to 70% of the free cash flow of the corresponding financial year in such manner (including by way of dividend and/or share buyback) as may be decided by the board from time to time, subject to applicable laws and requisite approvals, if any.
In addition to the above, the board has identified an amount of upto Rs 13000 crore ($2 billion) to be paid out to shareholders during financial year 2018, in such manner (including by way of dividend and/or share buyback), to be decided by the board, subject to applicable laws and requisite approvals, if any.
The board appointed Ravi Venkatesan, Independent Director as Co-Chairman of the board.
Heritage Foods rose 1.71% after the company said that it has received approval from Competition Commission of India and completed the process of acquisition of dairy business of Reliance Retail. The company is taking control of entire dairy business of Reliance Retail with effect from 12 April 2017, Heritage Foods said. Post the transaction closure, Reliance Retail will continue to trade in dairy products including Heritage dairy products through its retail and wholesale channels, it added. The announcement was made after market hours yesterday, 12 April 2017.
On macroeconomic data front, industrial production declined 1.2% in February 2017 over February 2016, snapping 3.3% growth recorded in January 2017. The manufacturing sector's production dipped 2% in February 2017, mainly contributing to the dip in industrial production.
The inflation based on consumer price index (CPI) increased to 3.81% in March 2017 (new base 2012=100), compared with 3.65% in February 2017. The corresponding provisional inflation rate for rural area was 3.75% and urban area 3.88% in March 2017 as against 3.67% and 3.55% in February 2017. The core CPI inflation rose marginally to 4.79% in March 2017 from 4.75% in February 2017. The CPI and IIP data was announced after market hours yesterday, 12 April 2017.
Overseas, Asian stocks were mixed. China's exports rose 14.8% in the first quarter from a year earlier in yuan terms, extending an 11% increase in the first two months, official data showed. Imports in the January to March period increased 31.1% in yuan terms from a year earlier, compared with a 34.2% rise in the first two months, the General Administration of Customs said in a release.
China's trade balance returned to a surplus in March, helped by renewed strength in exports after a surprise deficit in February. The balance between exports and imports came to a surplus of $23.93 billion in March, compared with a deficit of $9.15 billion in February, the General Administration of Customs said. Exports rose 16.4% in March from a year earlier, following a 1.3% drop in February. Imports continued to expand rapidly, growing 20.3% in March compared with February's 38.1% increase.
US stocks closed modestly lower yesterday, 12 April 2017 led by industrial and materials companies on another day of subdued trading ahead of the long Easter holiday weekend.
Meanwhile, US Secretary of State Rex Tillerson met with the Russian counterpart Sergei Lavrov to discuss the civil war in Syria and nuclear capabilities of North Korea. In recent days, the trading mood has been dented by heightened geopolitical tensions.
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