Key benchmark indices edged lower in what was a volatile trading session as investors remained cautious ahead of consumer inflation and industrial output data, which are slated to be released by the government after market hours. Weakness in European stocks also weighed adversely on sentiment. The rupee further weakened against the dollar. Rupee depreciation fuels inflation, increases import bill and current account deficit. It also increases the government's spending on fuel subsidies, potentially widening the fiscal deficit. The S&P BSE Sensex and the 50-unit CNX Nifty, both, settled at their lowest level in nearly five weeks. The Sensex was down 209.05 points or 1.02%, off 302.31 points from the day's high and up 19.69 points from the day's low. The market breadth, indicating the overall health of the market, was negative.
Index heavyweight and cigarette major ITC gained in volatile trade. Britannia Industries jumped after declaring strong Q2 result after market hours on Monday, 11 November 2013. Most auto stocks declined. Metal stocks dropped. Hindalco Industries edged lower after the company reported net profit declined slightly in Q2 September 2013. Bank stocks declined.
Indian stocks fell for the sixth day in a row today, 12 November 2013. The Sensex has fallen 957.45 points or 4.51% in six trading sessions from a record closing high of 21,239.36 which it had attained during the special Diwali Muhurat trading session held on Sunday, 3 November 2013. The index has fallen 882.61 points or 4.17% in November so far (till 12 November 2013). The Sensex has garnered 855.20 points or 4.4% in calendar 2013 so far (till 12 November 2013). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 2,833.20 points or 16.24%. From a record high of 21,321.53 on 3 November 2013, the Sensex has fallen 1,039.62 points or 4.88%.
The market edged higher in early trade. It regained positive terrain after slipping into the red and hitting fresh intraday low in morning trade. It weakened and hit fresh intraday low in mid-morning trade. It recovered and hovered between positive and negative terrain after hitting fresh intraday low in early afternoon trade. Key benchmark indices once again weakened in afternoon trade amid volatility. It hit fresh intraday low in mid-afternoon trade. It further weakened and hit fresh intraday low in late trade.
In the foreign exchange market, the rupee edged lower against the dollar as investors remained cautious ahead of consumer inflation and industrial output data. The partially convertible rupee was hovering at 63.6250, compared with its close of 63.24 on Monday, 11 November 2013.
The S&P BSE Sensex was down 209.05 points or 1.02% to 20,281.91, its lowest level since 10 October 2013. The index dropped 228.74 points at the day's low of 20,262.22 in late trade, its lowest level since 10 October 2013. The index rose 93.26 points at the day's high of 20,584.22 in early trade.
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The CNX Nifty was down 60.75 points or 1% to 6,018.05, its lowest closing level since 9 October 2013. The index hit a low of 6,011.75 in intraday trade, its lowest level since 10 October 2013. The index hit a high of 6,108.70 in intraday trade.
The total turnover on BSE amounted to Rs 1888 crore, lower than Rs 1897.72 crore on Monday, 11 November 2013.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,471 shares declined and 989 shares gained. A total of 130 shares were unchanged.
The BSE Mid-Cap shed 0.78% and the BSE Small-Cap index declined 0.76%. Both these indices outperformed the Sensex.
Among the 30-share Sensex pack, 26 stocks fell and rest of them rose.
Index heavyweight and cigarette major ITC gained 0.54% to Rs 318.70 in volatile trade. The stock recovered from day's low of Rs 317.
Reliance Industries lost 1.47% to Rs 851.
Britannia Industries jumped 3.65% after consolidated net profit jumped 65.7% to Rs 97.60 crore on 12.8% increase in revenue to Rs 1740 crore in Q2 September 2013 over Q2 September 2012. The result was announced after market hours on Monday, 11 November 2013.
L&T fell 1.44%. The company said during market hours today, 12 November 2013 that L&T Infrastructure Development Projects (L&T IDPL) has been awarded a contract by the government of Odisha for developing a road project estimated at a total cost of Rs 1293 crore.
The road project issued by the Odisha Works Department, will be built under the Public-Private-Partnership model. L&T IDPL had bid for a grant of Rs 465.30 crore, for four-laning the Sambalpur -Rourkela section of the state highway. The stretch extends for 161.73 km and has been offered for a concession period of 22 years, including the construction period of three years. This will be L&T IDPL's first road project in Odisha to be executed on a build-operate-transfer basis. The concession agreement for the project was signed between L&T Sambalpur Rourkela Tollways Limited, a special purpose vehicle formed for the project by L&T IDPL, and the Government of Odisha.
Currently, the road has two lanes and has to be widened to four lanes along with other facilities such as flyovers, underpasses, bridges, bus bays, rest areas and service roads. The project shall have state-of-art facilities such as advanced Highway Traffic Management Systems, Highway Patrolling Service and Accident Vehicle Recovery Service. The concessionaire shall be entitled to collect appropriate tolls after completion of construction, based on a pre-determined toll policy issued by Government of Odisha.
Reliance Capital fell 4.07%. On a consolidated basis and excluding one-time capital gains on stake sale in Reliance Capital Asset Management last year, the company reported 201% surge in net profit to Rs 181 crore on 20% rise in total income to Rs 1869 crore in Q2 September 2013 over Q2 September 2012. The result was declared after market hours today, 12 November 2013.
Reliance Communications slipped 5.8%. The company after market hours reported 129.4% jump in consolidated net profit to Rs 234 crore (excluding provision write back of Rs 441 crore) on 3.7% rise in operating revenue to Rs 5394 crore in Q2 September 2013 over Q2 September 2012.
Most auto stocks declined. Car major Maruti Suzuki India shed 0.23%. But, M&M rose 0.71%.
Tata Motors lost 4.07%, with the stock extending Monday's 2.04% fall. The company's consolidated net profit surged 70.7% to Rs 3542 crore on 31.1% rise in revenues to Rs 56882 crore in Q2 September 2013 over Q2 September 2012. The company said revenues grew despite weak operating environment in the India business which was more than offset by increase in wholesale volumes and richer product and market mix at Jaguar Land Rover (JLR). The result was announced after market hours on Friday, 8 November 2013.
Ashok Leyland lost 4.63% to Rs 15.45 after a block deal of 1.20 crore shares was executed on the counter at Rs 15.60 per share at 11:19 IST on BSE today, 12 November 2013.
Shares of two-wheeler makers dropped. Hero MotoCorp (down 0.6%) and Bajaj Auto (down 0.88%), declined.
Oil India rose 0.29%. The company during market hours reported 5.33% fall in net profit to Rs 903.64 crore on 9.27% rise in total income to Rs 3183.78 crore in Q2 September 2013 over Q2 September 2013 over Q2 September 2012.
Metal stocks dropped. Jindal Steel & Power (down 0.34%), Bhushan Steel (down 0.87%), JSW Steel (down 2.63%), Tata Steel (down 1.82%), Sail (down 1.7%), and Hindustan Zinc (down 1.81%), declined.
Sesa Sterlite shed 2.27%. The Supreme Court gave the go-ahead on Monday for the auction of around 11.46 million tonnes of iron ore already mined in Goa state, potentially doubling the country's exports this year to top market China if overseas sales are allowed.
However, the Supreme Court has maintained a 14-month ban on iron ore mining in top producing state Goa. Sesa, India's top private-sector mining company, would be the biggest beneficiary if mining resumed in Goa, as it is the largest producer in the state.
The leading foreign bank said there is limited upside potential for the company from the apex court order as the decision reiterates concerns that mining resumption in Goa is likely to take time, and could be significantly lower than before ban.
Hindalco Industries fell 0.49% after the company's net profit declined slightly in Q2 September 2013. The company during market hours reported 0.49% fall in net profit to Rs 357.11 crore on 4.58% rise in total income to Rs 6584.67 crore in Q2 September 2013 over Q2 September 2013 over Q2 September 2012.
Hindalco's EBITDA (earnings before interest taxes depreciation and amortization) rose 4.85% to Rs 540 crore in Q2 September 2013 over Q2 September 2012.
Hindalco said that the Q2 result included a non-recurring income of Rs 61 crore and a dividend income of Rs 100 crore from subsidiary companies.
Other income surged 111.39% to Rs 279.82 crore in Q2 September 2013 over Q2 September 2012. It slumped 34.61% over Q1 June 2013. The company said that other income was impacted by lower treasury yield due to liquidity tightening.
Finance costs surged 557.47% to Rs 183.17 crore in Q2 September 2013 over Q2 September 2012. It jumped 23.16% over Q1 June 2013. Hindalco said that finance costs were higher, given higher average borrowing.
The average Aluminium LME in Q2 September 2013 dropped by around 3% and 7% respectively from the levels seen in Q1 June 2013 and in Q2 September 2012. The decline was offset by the depreciating rupee. The performance of copper business has improved significantly compared to Q1 June 2013, the company said in a statement.
In its outlook, Hindalco said the long spell of subdued LME has adversely affected the global aluminium industry and its margins and production levels significantly. Greenfield projects are ramping up as planned, however, EBITDA streams will take time to scale up with delayed access to captive coal. With improving TcRc, copper business is expected to have a stable outlook despite a sharp drop in by-product realization, the company said.
Novelis, the US subsidiary of Hindalco Industries on Monday, 11 November 2013 reported net income attributable to its common shareholder of $23 million for the second quarter of fiscal 2014. Excluding certain tax-effected items, net income was $37 million for the quarter.
Adjusted EBITDA for the second quarter of fiscal 2014 was $228 million compared to $277 million reported for the same period a year ago. Sequentially, adjusted EBITDA improved 12% compared to the $204 million reported in the first quarter of fiscal 2014, in part due to initial success from the company's rolling expansion in South America. Excellent project execution allowed Novelis to meet strong market demand and puts the South America region on track to achieve record shipments this fiscal year.
"We are nearing an inflection point in the transition of our business from investment to growth," said Phil Martens, President and Chief Executive Officer for Novelis. "We have invested heavily in expanding our rolling, recycling and automotive finishing assets over the last three years to solidify our leadership position ahead of the strong market growth we expect, and we are beginning to see these results materialize. In fact, with the contribution from our expansions in South America and Asia, we expect results in the second half of fiscal 2014 to be stronger than the first half."
Martens also highlighted the company's stable business performance in North America, despite the challenging dynamics related to overcapacity in the North American can market which affected year-over-year results. "The reallocation of some hot mill capacity towards high-growth, high-margin automotive sheet in this region is not only a key piece of our growth strategy, it also will help rebalance the North American can market," said Martens. "We are aggressively increasing finishing capacity globally to support strong growth in the automotive flat rolled products market. Our two North American finishing lines are on track to produce commercial product by the end of this fiscal year and we are already evaluating additional investments."
Shipments of aluminum rolled products totaled 713 kilotonnes for the second quarter of fiscal 2014, down one percent compared to 719 kilotonnes for the same period last year but up one percent from the first quarter. Net sales for the second quarter of fiscal 2014 were $2.4 billion, flat compared to both the prior year and prior quarter.
For the second quarter of fiscal 2014, Novelis reported liquidity of $843 million. Free cash flow was $178 million for the second quarter of fiscal 2014 and capital expenditures totaled $184 million. "As expected, we generated positive free cash flow in the second quarter despite meaningful investments in growth, primarily due to significant improvements in working capital," said Steve Fisher, Chief Financial Officer for Novelis. "We will continue this diligent focus on cash generation and expect to drive positive free cash flow in the second half of this fiscal year as a result of working capital efficiencies and other cash improvement actions."
National Aluminium Company rose 3.68% on strong Q2 result. The company's net profit surged 3648.33% to Rs 179.17 crore on 6.50% increase in total income to Rs 1861.07 crore in Q2 September 2013 over Q2 September 2012. The company announced the result after market hours on Monday, 11 November 2013.
Bank stocks declined. ICICI Bank dropped 2.66%. HDFC Bank declined 1.3%.
State Bank of India fell 1.94%.
But, Canara Bank rose 1.64% after the board of directors of the bank at its meeting held today, 12 November 2013, has approved the proposal regarding raising of capital by way of preferential allotment of equity shares in favour of Government of India amounting to Rs 500 crore.
Further, the board has delegated the authority to the Chairman & Managing Director of the bank to do all the necessary / relevant acts/things and to decide on the matters connected with or incidental thereto.
The state-run bank during market hours reported 5.3% fall in net profit to Rs 625.94 crore on 13.3% rise in total income to Rs 10427.48 crore in Q2 September 2013 over Q2 September 2013 over Q2 September 2012.
Canara Bank's asset quality improved during Q2 September 2013 from Q1 June 2013. Gross non performing assets (NPA) declined to 2.64% in Q2 September 2013 from 2.91% in Q1 June 2013, but rose marginally from 2.58% in Q2 September 2012. Net NPA ratio reduced to 2.3% in Q2 September 2013 from 2.48% in Q1 June 2013, but rose from 2.12% in Q2 September 2012.
Provisions and contingencies rose 60.06% to Rs 674.03 crore in Q2 September 2013 over Q2 September 2012. However, it declined 26.43% to Rs 674.03 crore in Q2 September 2013 over Q1 June 2013.
HPCL fell 0.78%. The company's net profit declined 86.29% to Rs 318.92 crore on 5.42% rise in total income to Rs 52103.66 crore in Q2 September 2013 over Q2 September 2012. The company announced result during market hours.
Wockhardt rose 1.66% after the company said its board has endorsed the decision of its Switzerland-based arm Wockhardt Bio AG to undertake a European listing. The announcement was made after trading hours on Monday, 11 November 2013.
"In order to meet long term aspirations of the company and its group, the board of directors of Wockhardt have endorsed the decision of the board of Wockhardt Bio AG, Switzerland to undertake a European Listing with a relatively modest dilution of approximately 5% of the shareholding of Wockhardt Bio AG, Switzerland," Wockhardt said in a filing to BSE.
"Wockhardt is a global pharmaceutical and biotechnology major and has a business of over 75% outside India. The holding company, for undertaking this is primarily Wockhardt Bio AG, Switzerland," it added.
The plan to list its overseas holding company comes at a time Wockhardt has been facing regulatory scrutiny for some of its plants in India. In May, the US FDA had issued an import alert against the Waluj facility, which makes injectables and solid dosages.
Subsequently, the Medicines and Healthcare Products Regulatory Agency, the drug regulator in the UK, withdrew its GMP (good manufacturing practice) certificate issued to the company's manufacturing facility at Kadaiya in Gujarat. The regulator also withdrew the good manufacturing certification granted to the Chikalthana facility in Maharashtra.
The UK regulator had also imposed an import alert against Wockhardt's export-oriented plant at Waluj in Maharashtra and issued a precautionary recall for 16 medicines made by the company at the unit.
However, the UK MHRA has recently communicated to Wockhardt that it can manufacture and supply most of the products manufactured at the Kadaiya facility assessed to be critical to public health.
Wockhardt says that because of this development, the net impact on the annualised consolidated revenue is expected to be less than 1 million pounds, out of the total annual consolidated revenue of approximately 18 million pounds, from the facility.
Asian Paints lost 3.3%. The company said after market hours on Monday, 11 November 2013 that it has closed its open offer for buying the shares of Berger International, Singapore (BIL) and has acquired 96.48% stake in the latter.
The open offer made by its Mauritius-based wholly owned subsidiary Asian Paints International (APIL) was closed on November 8, Asian Paints said in a filing to BSE.
"The total numbers of shares owned, controlled, acquired or agreed to be acquired by APIL together with valid acceptances of the offer, amounts to an aggregate of 100,242,365 shares, representing approximately 96.48% of the total number of issued shares of BIL as at the date of this announcement. Further the offer is no longer for acceptances," Asian Paints said.
On October 1, Asian Paints had said that it has increased holding in BIL to 90.44 per cent through its ongoing open offer. The offer would close on October 9, 2013 or such later date as may be announced from time to time by APIL.
"APIL owns and holds approximately 90.44%, of the total number of issued shares of Berger International, Singapore - indirect subsidiary of Asian Paints, as at the date of this announcement, together with the valid acceptances received in terms of the aforesaid Offer," it had said.
On August 21, APIL, which already held 50.1 per cent stake in BIL, raised it to 75.82 per cent by buying shares for Singaporean dollar (SD) 0.25 (Rs 12.66) per share, totalling SD 6.68 million (Rs 33.81 crore).
After that it had announced to come out with a voluntary cash offer to acquire the balance 24.18 per cent shares of BIL with an intention to make BIL a wholly-owned subsidiary of APIL and delist from Singapore Exchange Securities Trading Ltd.
APIL had said the delisting of BIL would provide greater flexibility to manage, develop and optimise the use of the management and capital resources and facilitate the implementation of any operational change. Asian Paints said it has no present intention to introduce any major changes to the businesses of Berger.
Godrej Industries fell 3.38%. The company's consolidated net profit rose 22% to Rs 94 crore on 2% growth in total income to Rs 2083 crore in Q2 September 2013 over Q2 September 2012. The result was announced after market hours on Monday, 11 November 2013.
Godrej Industries' consolidated profit before depreciation, interest, taxation (PBDIT) rose 31% to Rs 191 crore in Q2 September 2013 over Q2 September 2012. Profit before tax (PBT) rose 38% to Rs 139 crore.
Commenting on the company's Q2 performance Mr. A. B. Godrej, Chairman, Godrej Industries said, Our results for the second quarter have demonstrated the strength of our business model which captures a diverse range of businesses in some of the key growth sectors of the economy. In a challenging environment, our overall performance has been encouraging as some of the core operations registered sustained growth. Our agri businesses registered sustained momentum in revenues and marked improvement in profitability driven primarily by the agri-inputs segment and our agri joint ventures. The aqua feed business continued to record strong volumes in Q2 September 2013 followed by robust growth in layer feed volumes. The oil-palm segment has been incrementally adding acreage under cultivation each quarter. Overall, the outlook for all the agri. businesses is extremely favourable and we are positioned well to tap the prospects in the agri. sector in India. Godrej Properties has witnessed strong growth, a successful capital raise and the expansion of their development portfolio by adding joint venture projects in key markets across India. Godrej Properties continues to place tremendous emphasis on execution at all on-going projects and we are happy to deliver Phase 1 of Godrej Garden City, Ahmedabad on time in Q2 September 2013. In a challenging environment, Godrej Consumer has delivered 23% growth well ahead of FMCG industry growth. Along with healthy top line growth, we have also delivered good operating profit growth with 20% EBITDA growth. We continue to be aggressive in launching new innovations that have been well accepted by our consumers. We are backing our new launches with strong investments. At the same time, we continue to intensify our efforts in enhancing our distribution and improving productivity through technology. Our Chemicals business performance continues to reflect the impact of an adverse global economic environment and increasing price of natural gas. While we remain cognizant of the challenges, we believe that the tide should turn and the business will again be in a position to deliver healthy performance.
Reliance Power (RPower) dropped 3.07%. The company's consolidated net profit rose 4% to Rs 251 crore on 23% growth in total income to Rs 1457 crore in Q2 September 2013 over Q2 September 2012. The result was announced after market hours on Monday, 11 November 2013.
RPower's consolidated operating revenue rose 22% to Rs 1321 crore in Q2 September 2013 over Q2 September 2012. EBITDA (earnings before interest, taxation, depreciation and amortization) rose 10% to Rs 431 crore.
RPower said it has maintained its growth momentum by registering strong operational and financial performances in Q2 September 2013.
RPower said that the progress at the second unit of 660 megawatts (MW) of Sasan ultra mega power project (UMPP) of 3,960 MW is on track and the unit is likely to be commissioned in November 2013. The work at 100 MW Concentrated Solar Power (CSP) project in Dhursar, Rajasthan is on stream and the project is expected to be commissioned in the current financial year, it said.
Reliance Infrastructure (RInfra) lost 5.57%. The company's consolidated net profit rose 11.78% to Rs 427 crore on 9.05% decline in total income to Rs 5273 crore in Q2 September 2013 over Q2 September 2012. The result was announced after market hours on Monday, 11 November 2013.
As on 30 September 2013, the consolidated networth of the company stood at Rs 26110 crore and is conservatively financed with debt to equity of 0.79, RInfra said.
NHPC fell 1.64% on weak Q2 result. The company's net profit fell 9.67% to Rs 707.58 crore on 3.13% decline in total income to Rs 1950.23 crore in Q2 September 2013 over Q2 September 2012. The result was announced after market hours on Monday, 11 November 2013.
Shalimar Paints rose 1.72% on strong Q2 result. The company's net profit rose 48% to Rs 4.1 crore on 6% increase in revenue to Rs 122.20 crore in Q2 September 2013 over Q2 September 2012. The company announced the result after market hours on Monday, 11 November 2013.
Shalimar Paints said that the improvement in profit after tax (PAT) margins was driven by lower material costs as a percentage of sales and lower trade discounts, partially offset by higher employee costs and other operating expenses.
Mr Sameer Nagpal, MD & CEO, commented, "Our growth this quarter has been in line with expectations and reverses the de-growth trend of the last quarter. Our efforts to improve product mix are paying off and helping us build a platform for profitable scaling up of the business."
Mr Girish Jhunjhnuwala, Chairman, commented, "We are focussing on building a strong foundation for the company to ensure sustainable growth in future. We expect to see continuous improvement in sales growth and margin profile from here on."
On macro front, the government will unveil industrial production data for September 2013 today, 12 November 2013. Industrial output is projected to jump 3.7% in September 2013, as per the median estimate of the poll carried out by Capital Market. Index of industrial production (IIP) rose 0.6% in August 2013, showing moderation in growth from 2.8% growth recorded in July 2013.
Data on inflation based on the consumer price index (CPI) for October 2013 will also be unveiled today, 12 November 2013. The headline CPI inflation (combined) is projected to increase to 10% in October 2013, as per the median estimate of the poll carried out by Capital Market. The headline CPI inflation (combined) for September 2013 was placed at 9.84% (y-o-y), which came in higher than 9.52% (y-o-y) seen in August 2013.
European stocks edged lower on Tuesday after equities yesterday extended a five-week rally, as investors weighed corporate earnings reports. Key benchmark indices in France and UK and Germany shed 0.24% to 0.33%.
Most Asian stocks edged higher on Tuesday. Key benchmark indices in China, Taiwan, Japan and South Korea rose 0.16% to 2.23%. Key benchmark indices in Singapore, Hong Kong and Indonesia shed 0.2% to 1.38%.
President Xi Jinping and Chinese Communist Party leaders today, 12 November 2013 conclude a four-day gathering aimed at mapping out a blueprint for reform, after data yesterday showed the nation's broadest measure of new credit fell by more than estimated in October.
Indonesia's central bank unexpectedly raised its benchmark interest rate as policy makers intensify efforts to narrow a current-account deficit that has weighed on the rupiah. Governor Agus Martowardojo and his board increased the reference rate by 25 basis points to 7.5%, the central bank said in Jakarta today.
Trading in US index futures indicated that the Dow could rise 13 points at the opening bell on Tuesday, 12 November 2013. US stocks rose on Monday, with the Dow Jones Industrial Average extending a record, as investors awaited retailer earnings reports to gauge the strength of consumer demand and the likelihood of cuts to monetary stimulus.
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