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Markets extended losses in noon deals pulled down by Information Technology behemoth Tata Consultancy Services (TCS) among some banking and financial heavyweights. TCS posted its third quarter results yesterday.
India’s largest IT services provider Tata Consultancy Services (TCS), continued to reiterate its stand that FY15 will be a better year than FY2014.
Though the December quarter numbers were in line with expectations, volume growth of 1.8% was disappointing.
TCS reported net profit of Rs 5,314 crore for the quarter ended December 31, 2013 up 49.6% year-on-year and 13% sequentially (quarter ended September 30, 2013). Net profit for the quarter were aided by a forex gain of Rs 299 crore, compared to a forex loss last quarter.
Revenue for the quarter was up 32.5% year-on-year at Rs 21, 294 crore; sequentially too the company saw its revenue go up by 1.5%, ahead of Bangalore based Infosys, but lower than HCL Technologies.
TCS down almost 5%, HDFC down 2.4%, Coal India down 9.5%, ICICI Bank down 1.22%, HDFC Bank down 0.73% are the top Sensex losers at this hour.
At 1:05PM, the 30-share Sensex was down 134.91 points at 21,130.27 and the 50-share Nifty was down 32.90 points at 6,286.
The Indian rupee was trading slightly higher at Rs 61.35 compared with Thursday's close of Rs 61.53. During January so far, foreign institutional investors have made investments in the debt market to the tune of $2 billion, with fresh inflows into Indian banks.
Markets in Asia were trading mixed after a subdued start tracking tracking weak global cues. Shanghai Composite was down 0.9% while Straits Times eased 0.1%. Among other major indices, Hong Kong's Hang Seng was up 0.8% while Nikkei was up 0.1%.
The BSE IT index was the top loser among the sectoral indices on the BSE down 1.6% followed by Bankex among others. Oil and Gas was up 1.1% while Healthcare index was up 0.5%.
Among the index heavyweights, Reliance Industries was up 1.2% ahead of its third quarter results due for release after market hours today.
Infosys was trading at a new high up 1% at Rs 3,758. Infosys had recorded a margin expansion of 150 bps quarter on quarter (qoq) in December quarter was ahead of street expectations. The company had also improved its revenue guidance for the financial year from 9-10% to 11.5-12%.
Increase in guidance suggests that management is incrementally positive about demand environment. Management commentary also turns positive on health of demand for Indian IT industry, says analyst at JP Morgan.
In the defensive space, Hindustan Unilever was up 1.4%, Sun Pharma gained 1.1% and Cipla was up 1.4%.
Other Sensex gainers include, Hindustan Unilever, Tata Motors, Sun Pharma and M&M.
Financials which had gained recently on hopes that the RBI will keep policy rates steady post the decline in December WPI also witnessed profit taking. HDFC, HDFC Bank,ICICI Bank and SBI were down 0.1-2% each.
Coal India was down 9% after the stock turned ex-dividend today. The board annouced an interim dividend of Rs 29 per share.
In the broader market, the BSE Mid-cap index was down 0.3% and the Small-cap index was down 0.2%.
Market breadth was weak with 1,187 losers and 921 gainers on the BSE.
Results corner
In line with street expectations, ITC today reported a jump of 16% in its third quarter net profit at Rs 2,385.34 crore.
The tobacco to hospitality giant had reported a net profit of Rs 2051.85 crore during the same period last fiscal.
The new FMCG business registered a profit of Rs 10.35 crore in the quarter under review as against a loss of Rs 23.98 crore in a year ago period.
Net sales from the new FMCG business rose to Rs 2,077.82 crore compared to Rs 1,782.70 crore in year ago period.
Profits from the hotel business improved to Rs 62.20 crore third quarter against Rs 55.49 crore in a year ago period.
Post the results announcement, ITC scrip is trading 0.17% down at Rs 325.15 on BSE.
Other shares
Ranbaxy Laboratories has dipped 4% to Rs 400 extending its past four days fall after the pharmaceutical company’s manufacturing facility in Toansa, Punjab received a Form 483 warning from the US Food and Drug Administration (US FDA).
The Toansa facility, which supplies 70-75% of pharma ingredients, is Ranbaxy's main active pharmaceutical ingredient (API) factory.
Wipro was down nearly 3% ahead of its results today.
