Key benchmark indices edged higher in early trade on firm Asian stocks. The barometer index, the S&P BSE Sensex, was up 56.25 points or 0.25%, up close to 20 points rom the day's low and off about 30 points from the day's high. The market breadth, indicating the overall health of the market was strong.
TCS declined amid initial volatility after the announcement of Q4 March 2014 results after trading hours on Wednesday, 16 April 2014. Wipro rose ahead of its Q4 results today, 17 April 2014. HCL Technologies gained after strong Q3 results.
Foreign institutional investors (FIIs) sold shares worth a net Rs 44.69 crore on Wednesday, 16 April 2014, as per provisional data from the stock exchanges.
The stock market remains closed tomorrow, 18 April 2014, on account of Good Friday.
At 9:32 IST, the S&P BSE Sensex was up 56.25 points or 0.25% to 22,333.48. The index gained 87.67 points at the day's high of 22,364.90 in early trade. The index rose 34.96 points at the day's low of 22,312.19 in early trade.
The CNX Nifty was up 19.60 points or 0.29% to 6,694.90. The index hit a high of 6,701.80 in intraday trade. The index hit a low of 6,686.90 in intraday trade.
The BSE Mid-Cap index was up 40.99 points or 0.57% at 7,273.75. The BSE Small-Cap index was up 57.18 points or 0.77% at 7,475.40. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market was strong. On BSE, 859 shares gained and 307 shares fell. A total of 39 shares were unchanged.
Tata Motors (up 1.4%), Axis Bank (up 1.15%) and Mahindra & Mahindra (M&M) (up 0.99%) edged higher from the Sensex pack.
Wipro rose 1.24% ahead of its Q4 results today, 17 April 2014.
HCL Technologies gained 1.34% on good Q3 results. The company before market hours today, 17 April 2014, said that its consolidated net profit as per US accounting standards rose 8.5% to Rs 1624 crore on 2% rise in revenue to Rs 8349 crore in Q3 March 2014 over Q2 December 2013. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 5% to Rs 2232 crore in Q3 March 2014 over Q2 December 2013. EBITDA margin edged up to 26.7% in Q3 March 2014, from 26% in Q2 December 2013.
HCL continues to push the pedal on its new generation propositions including Digital System Integration while maintaining its profitable growth trajectory, the company said in a statement.
Shiv Nadar, Chairman & Chief Strategy Officer, HCL Technologies said: "Our leadership has been driven by our commitment towards sustainability, diversity and trust through transparency. With an emergence of an increasingly positive macro environment these values will continue to be HCL's key differentiators and provide an impetus to our future growth".
Anant Gupta, President & CEO, HCL Technologies said: "We continue on our growth momentum with a strong revenue growth of 3% QoQ along with 10th straight quarter of margin expansion. Our EBIT has registered an impressive expansion of 7.1% sequentially and 44.5% YoY resulting in a healthy EBIT margin of 24.6%. The Application Services business registered a robust performance led by Digital Systems Integration proposition on the discretionary side and ALT ASM on the non-discretionary side this quarter. Infrastructure Services have continued to punch their weight in the market. We continue on our journey of making significant investments in talent acquisition by on-boarding several senior leaders representing a mix of industry and skill profiles to exponentially multiply our capability in the emerging Digital Systems Integration space".
Anil Chanana, CFO, HCL Technologies said: "Our success with the industrialized delivery model, increasing number of contracts moving into steady state, savings on G&A front, helped in improved net income margin of 19.4% this quarter, up from 15.9% in the corresponding quarter of last year. This has provided us more room for making relevant investments in a rapidly changing market landscape. Our focus on generating higher free cash flow continued during the quarter with free cash flow as percentage of EBITDA reaching 73%, up from 61% in the corresponding period last year. The return on capital employed (LTM basis) was at 38%, higher than 32% achieved in the corresponding quarter last year".
HCL Tech said that the board of directors of the company at its meeting held on 17 April 2014, inter alia, has declared an interim dividend of Rs 4 per share of Rs 2 each of the company for the financial year ending 30 June 2014 (FY 2014).
TCS declined 1.14%. TCS' consolidated net profit rose 2.3% to Rs 5297 crore on 1.2% growth in revenue to Rs 21551 crore in Q4 March 2014 over Q3 December 2013. The results are as per International Financial Reporting Standards. Net profit jumped 37.5% to Rs 19117 crore on 29.9% growth in revenue to Rs 81809 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).
Commenting on the company's FY 2014 performance, N. Chandrasekaran, CEO and MD, TCS said: "We have delivered strong growth and strengthened our competitive positioning in the market. We have maintained our momentum, improved our quality of growth, deepened our relationship with customers and expanded our presence in newer markets like Europe during the past 12 months. Our strategic investments including those in Digital Technologies are providing a compelling value proposition as well as helping us anticipate and shape new market trends successfully".
Looking forward to financial year 2014-15, Mr Chandrasekaran added: "We are upbeat that the next 12 months will bring many more opportunities for growth across multiple industries and markets. As an organization, we remain focused on disciplined execution of our strategy as well as on energizing 300,000 TCSers to ensure they make a difference to their customers, their colleagues and the community".
Rajesh Gopinathan, Chief Financial Officer, TCS said: "Our focus has been to stay disciplined in operations while supporting business growth across multiple markets, industries and technologies. We enhanced our profitability to industry leading levels despite macro and currency volatility through the year. We are continuously investing to stay ahead of the curve".
TCS said that there was holistic growth across markets and industries during the financial year. Europe led growth in major markets, while UK and North America continue to grow in line with the company average, the company said. All major industry verticals grew in double digits led by Retail, Manufacturing, Life Sciences & Healthcare and BFSI during FY 2014, the company said in a statement.
TCS' full service capabilities continue to be leveraged by customers with new service lines growing at a fast pace led by Infrastructure Services, Assurance Services, Global Consulting and Enterprise Solutions, the company said in a statement.
TCS' board of directors at its meeting held on Wednesday, 16 April 2014, recommended a final dividend of Rs 20 per share for FY 2014.
The United States on Wednesday, 16 April 2014, urged the Indian government that emerges from ongoing elections to follow economic policies that encourage investment, saying Washington would like to see bilateral trade grow to $500 billion a year. Nisha Biswal, U.S. assistant secretary of state for South and Central Asia, said future economic growth in South Asia hinged on India as the region's growth engine. However, Biswal said that while Indian leaders had targeted $1 trillion in infrastructure investment over five years to close gaps preventing growth in manufacturing, policies still inhibited foreign investment. She said India ranked a poor 134 out of 189 countries as a place to invest and start a business.
Biswal said India had the potential to exceed all expectations economically, but needed to adopt investment and tax policies designed to lure, not deter, capital flows and a system of timely regulatory approvals and contract enforcement. It also needed to protect intellectual property rights, she said. "The more integrated India is into global markets and into the economic architecture of Asia, the more India's economy will grow and benefit the entire global economic system," she said. Biswal said the United States wanted to see bilateral trade grow to $500 billion a year. It is about $100 billion currently.
Biswal also said an improved climate between India and Pakistan could "pay enormous economic dividends."
The Reserve Bank of India (RBI) next undertakes monetary policy review on 3 June 2014. The RBI left its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review on 1 April 2014, as consumer-price inflation eased to a two-year low and as the rupee firmed up against the dollar.
A major near term trigger for the stock market is the outcome of the upcoming Lok Sabha elections. Voting in Maharashtra in the crucial fifth phase of the Lok Sabha elections takes place today, 17 April 2014. Nineteen seats are going for elections in this phase. Voting has also begun in Madhya Pradesh with 142 candidates in the fray in 10 Lok Sabha constituencies. The 36 days long voting process began on 7 April 2014 and will conclude on 12 May 2014. The results will be declared on 16 May 2014 after which India will get a new government. The term of the current Lok Sabha expires on 1 June and the new House has to be constituted by 31 May.
Asian stocks edged higher on Thursday, 17 April 2014, after US industrial production increased more than forecast in March and Federal Reserve Chair Janet Yellen said the central bank remains committed to supporting the economic recovery. Key benchmark indices in China, Indonesia, Hong Kong and Taiwan were up 0.01% to 0.49%. Key benchmark indices in South Korea, Japan, and Singapore were off 0.05% to 0.36%.
Premier Li Keqiang said China isn't considering strong stimulus, and reiterated that economic growth a bit higher or lower than 7.5% is a reasonable range, according to a statement posted on the central government's website. The government said it will lower reserve ratios at some rural lenders.
US stocks rose to their highest level in a week on Wednesday, 16 April 2014, encouraged by a crop of corporate earnings and reassuring US and Chinese economic data.
The US economy continued to expand in most regions as businesses benefited from a rebound from harsh winter weather earlier in the year. Eight of 12 Fed districts characterized growth as modest or moderate, the Fed said in its Beige Book business survey, based on reports gathered before April 7. Industrial production rose more than forecast in March after a February gain that was twice as big as previously estimated. A Commerce Department report showed the pace of US home construction rebounded less than forecast in March.
In her first major speech on her policy framework as Fed chair, Janet Yellen said US central bankers must be mindful of how short the Fed is of its goals of full employment and price stability. The larger the shortfall of employment or inflation from their respective objectives, and the slower the projected progress toward those objectives, the longer the current target range for the federal funds rate is likely to be maintained, Yellen said to the Economic Club of New York.
The gap, in both cases, is large, with a jobless rate of 6.7% more than a percentage point higher than the top end of the Federal Open Market Committee's estimate of full employment. Inflation, by the Fed's preferred measure, is more than a percentage point below its 2% goal. It will take more than two years for the economy to close in on the Fed's goals, she said, adding that the Fed's forecasts in the past were disrupted by negative surprises, not positive ones.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 decided after the conclusion of a monetary policy review to trim its monthly bond purchases by $10 billion to $55 billion.
Meanwhile, Ukraine accused Russia of fueling terrorism in its eastern regions as a move against separatists in the town of Kramatorsk stalled on the eve of an international conference aimed at defusing the crisis. Ukrainian government troops attempted to press on with an anti-separatist offensive that freed an airfield near Kramatorsk. Authorities sent armored vehicles into the Donetsk region town, only to have some of them seized by pro-Russian activists who also disarmed a number of soldiers. NATO is strengthening its military footprint along its eastern border immediately in response to Russia's aggression in Ukraine, the alliance's chief said on Wednesday.
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