Key indices close session with small losses

Key benchmark indices settled with small losses after trading in negative terrain for almost entire trading session. The barometer index, the S&P BSE Sensex fell 87.66 points or 0.31% to settle at 28,091.42. The losses for the Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty shed 17.65 points or 0.2% to settle at 8,691.30.

Stocks of public sector banks edged lower. Stocks of private sector banks were mixed. Kotak Mahindra Bank dropped shrugging off strong Q2 September 2016 results announced during trading hours today, 25 October 2016. HDFC Bank fell after announcing Q2 results. Asian Paints edged higher after reporting strong Q2 results. Dr Reddy's Laboratories gained after company's management commenting on the company's results said that its major businesses have shown sequential improvement in Q2 September 2016. Bharti Infratel edged higher after announcing strong Q2 earnings. Idea Cellular lost after announcing weak Q2 numbers. Zee Entertainment Enterprises rose after announcing good Q2 results. Adani Ports and Special Economic Zone jumped after unveiling strong Q2 September 2016 earnings.

 

Shares of Tata Group companies edged lower after Tata Sons, the holding company of the Tata Group, said its board of directors replaced Cyrus P. Mistry as chairman of Tata Sons.

In overseas stock markets, European and Asian stocks witnessed a mixed trend. Meanwhile, German business sentiment rose to a 2.5-year high in October, a sign that Europe's largest economy has started to pick up speed, according to the Ifo institute's monthly survey of about 7,000 companies. The Ifo institute said today, 25 October 2016 that its business climate index rose to 110.5 points in October from 109.5 in September, reaching the highest level since April 2014.

US stocks registered impressive gains yesterday, 24 October 2016, on flurry of M&A deals, part of the single largest week for M&A since the dot-com era. More than five multi-billion dollar deals were announced over the past week. Latest data showed that the Markit flash US manufacturing purchasing managers' index rose to 53.2 in October from 51.5 in September.

The Sensex fell 87.66 points or 0.31% to settle at 28,091.42, its lowest closing level since 21 October 2016. The index rose 32.33 points or 0.11% at the day's high of 28,211.41. The index lost 165.39 points or 0.58% at the day's low of 28,013.69.

The Nifty lost 17.65 points or 0.2% to settle at 8,691.30, its lowest closing level since 19 October 2016. The index rose 13.70 points or 0.15% at the day's high of 8,722.65. The index lost 45.50 points or 0.52% at the day's low of 8,663.45.

The BSE Mid-Cap index fell 0.3%. The decline in this index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index rose 0.13%, outperforming the Sensex.

The market breadth indicating the overall health of the market was negative. On BSE, 1,446 shares fell and 1,344 shares rose. A total of 235 shares were unchanged.

The total turnover on BSE amounted to Rs 2973.77 crore, lower than turnover of Rs 3396.82 crore registered during the previous trading session.

Among the sectoral indices on BSE, the S&P BSE IT index (down 0.84%), the BSE Auto index (down 0.43%), the BSE Capital Goods index (down 0.53%) and the BSE Oil & Gas index (down 0.48%) underperformed the Sensex. The BSE Healthcare index (up 0.46%) and the BSE Telecom index (up 0.76%) outperformed the Sensex.

Stocks of public sector banks edged lower. IDBI Bank (down 3.07%), Canara Bank (down 0.64%), Bank of Baroda (down 0.92%), Bank of India (down 0.7%), State Bank of India (down 0.59%), Punjab National Bank (down 0.44%), Indian Bank (down 0.37%) and Union Bank of India (down 0.24%) declined.

Stocks of private sector banks were mixed. RBL Bank (up 3.05%) and ICICI Bank (up 1.6%) edged higher. Yes Bank (down 0.07%) and IndusInd Bank (down 0.53%) edged lower.

Kotak Mahindra Bank dropped 0.32%, shrugging off strong Q2 September 2016 results announced during trading hours today, 25 October 2016. The bank's net profit rose 42.81% to Rs 813.29 crore on 13.46% increase in total income to Rs 5243.58 crore in Q2 September 2016 over Q2 September 2015.

The bank's gross non-performing assets (NPAs) stood at Rs 3180.66 crore as on 30 September 2016 as against Rs 3058.81 crore as on 30 June 2016 and Rs 2655.38 crore as on 30 September 2015. The ratio of gross NPAs to gross advances stood at 2.49% as on 30 September 2016 as against 2.50% as on 30 June 2016 and 2.35% as on 30 September 2015. The ratio of net NPAs to net advances stood at 1.20% as on 30 September 2016 as against 1.21% as on 30 June 2016 and 1.05% as on 30 September 2015.

The bank's provisions and contingencies (excluding tax provisions) rose 12.11% to Rs 197.76 crore in Q2 September 2016 over Q2 September 2015.

Net Interest Income (NII) rose 19% to 1995 crore in Q2 September 2016 over Q2 September 2015. Net Interest Margin (NIM) was reported at 4.47% in Q2 September 2016, up from 4.30% Q2 September 2015. Advances rose 13% to Rs 126015 crore as on 30 September 2016 compared with Rs 111662 crore as on 30 September 2015.

HDFC Bank fell 1.19% after announcing Q2 results. The bank reported 20.41% rise in net profit to Rs 3455.33 crore on 15.27% growth in total income to Rs 19970.89 crore in Q2 September 2016 over Q2 September 2015. The result was announced during market hours today, 25 October 2016. HDFC Bank's net interest income, the difference between interest earned and interest expended, grew by 19.6% to Rs 7993.60 crore in Q2 September 2016 over Q2 September 2015.

HDFC Bank's gross non-performing assets (NPAs) stood at Rs 5069.04 crore as on 30 September 2016 compared with Rs 4920.89 crore as on 30 June 2016 and Rs 3827.77 crore as on 30 September 2015. The ratio of gross NPAs to gross advances stood at 1.02% as on 30 September 2016 as against 1.04% as on 30 June 2016 and 0.91% as on 30 September 2015. The ratio of net NPAs to net advances stood at 0.3% as on 30 September 2016 as against 0.32% as on 30 June 2016 and 0.25% as on 30 September 2015.

HDFC Bank's total deposits rose 16.7% to Rs 5.91 lakh crore while total advances rose 18.1% to Rs 4.94 lakh crore in Q2 September 2016 over Q2 September 2015. HDFC Bank's provisions and contingencies rose 9.94% to Rs 748.99 crore in Q2 September 2016 over Q2 September 2015.

Axis Bank was up 1.49%. The bank is scheduled to announce Q2 September 2016 results today, 25 October 2016.

Shares of Tata Group companies edged lower after Tata Sons, the holding company of the Tata Group, said its board of directors replaced Cyrus P. Mistry as chairman of Tata Sons. Tata Steel (down 2.51%), Tata Global Beverages (down 2.47%), Tata Communications (down 2.26%), Tata Chemicals (down 2.09%), TCS (down 1.2%), Titan Company (down 1.19%) and Tata Motors (down 1.07%) declined.

The decision was taken at a board meeting held yesterday, 24 October 2016. The board named Ratan N. Tata as interim chairman of Tata Sons. The board has constituted a selection committee to choose a new chairman. The committee comprises Ratan N. Tata, Venu Srinivasan, Amit Chandra, Ronen Sen and Lord Kumar Bhattacharyya, as per the criteria in the Articles of Association of Tata Sons. The committee has been mandated to complete the selection process in four months.

Tata Sons is the promoter of the major operating Tata companies and holds significant shareholdings in these companies. About 66% of the equity capital of Tata Sons is held by philanthropic trusts endowed by members of the Tata family. The largest of these trusts are the Sir Dorabji Tata Trust and the Sir Ratan Tata Trust, which were created by the families of the sons of Jamsetji Tata, the Founder.

Asian Paints rose 1.1% after consolidated net profit after non-controlling interest rose 17.9% to Rs 475.94 crore on 10.2% growth in income from operations to Rs 4232.46 crore in Q2 September 2016 over Q2 September 2015. The result was announced during market hours today, 25 October 2016.

K.B.S. Anand, Managing Director & CEO, Asian Paints said that the decorative business segment in India registered double digit growth in the quarter. However a prolonged monsoon did affect demand in West and Central India. Good demand conditions in the Auto OEM and General Industrial business segment led to improved performance of the Automotive coatings JV (PPG-AP), he said. In the Industrial Coatings JV (AP-PPG), the Industrial Liquid Paints segment continued to grow well in the second quarter, Anand added. The international business reported good numbers specifically aided by contribution from good pick-up in demand in Nepal, Fiji and certain units in the Middle East. The Kitchen business (Sleek) and Bath business (ESS ESS) in the Home Improvement category registered good growth in the current quarter, Anand said.

Asian Paints after market hours today, 25 October 2016 said that its board of directors approved the scheme of amalgamation of Asian Paints (International) Limited, Mauritius, wholly owned subsidiary of the company with Asian Paints. The scheme will come into effect subject to the approval from the stock exchanges, Bombay High Court and such other statutory authorities as may be required in India and Mauritius. It may be noted that the proposed scheme has been reviewed and recommended for approval by the Audit Committee of the Board of the company at its meeting held on 24 October 2016.

Dr Reddy's Laboratories gained 3.59% after company's management commenting on the company's results said that its major businesses have shown sequential improvement in Q2 September 2016. The company's consolidated net profit fell 60.12% to Rs 308.90 crore on 10.57% decline in total income to Rs 3660.10 crore in Q2 September 2016 over Q2 September 2015. The announcement was made during market hours today, 25 October 2016. The results are as per International Financial Reporting Standards (IFRS).

The company's earnings before interest, taxation, depreciation and amortization (EBITDA) declined 43.64% to Rs 642 crore in Q2 September 2016 over Q2 September 2015. EBITDA margin edged lower to 17.9% in Q2 September 2016, from 28.6% in Q2 September 2015.

Commenting on the company's results, Co-chairman and CEO, G V Prasad said that DRL's major businesses have shown sequential improvement in Q2 September 2016 with revenues growing by 11% and EBITDA by 61%. Looking ahead, the company will continue to focus on launching new products in its generics business, improving productivity and strengthening its quality management systems, Prasad said.

Bharti Infratel rose 2.39% after consolidated net profit rose 31% to Rs 774 crore on 8% increase in revenues to Rs 3292 crore in Q2 September 2016 over Q2 September 2015. The result was announced after market hours yesterday, 24 October 2016.

Bharti Infratel's consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) rose 10% to Rs 1454 crore in Q2 September 2016 over Q2 September 2015. The company said it had total tower base of 89,791 in Q2 September 2016 with an average sharing factor of 2.21. The total tower base was 87,184 in Q2 September 2015 with an average sharing factor of 2.15.

Akhil Gupta, chairman, Bharti Infratel, said that with the conclusion of recent spectrum auctions, the Indian telecom industry is gearing up for the next round of network rollouts. 960 MHz of data spectrum was sold in 800, 1800, 2100, 2300 & 2500 MHz bands for a sum of approximately Rs 66000 crore, taking the total investment in spectrum since 2010 to over Rs 358000 crore. The telecom sector is already witnessing big increase in demand for high speed data and availability of this additional spectrum will further spur investments from operators towards data rollouts across the country. Bharti Infratel is well poised to capitalize on this opportunity and to support telecom operators in rollout of 3G and 4G networks.

Idea Cellular lost 2.08% after consolidated net profit slumped 88% to Rs 91.46 crore on 8.05% rise in total income to Rs 9535.01 crore in Q2 September 2016 over Q2 September 2015. The result was announced after market hours yesterday, 24 October 2016. Earnings before interest, taxation, depreciation and amortization (EBITDA) grew 1.8% to Rs 2840.10 crore in Q2 September 2016 over Q2 September 2015 as higher network running expenses due to accelerated expansion, increased subscriber acquisition and servicing cost, and multiple inflationary pressures resulted in overall operating cost increase. EBITDA margin contracted to 30.5% in Q2 September 2016 from 32.2% in Q2 September 2015.

In the recently concluded October 2016 Spectrum auction, Idea acquired 349.2 MHz of spectrum, including 149.2 MHz spectrum in frequency bands of 1800 MHz and 2100 MHz, expanding Idea mobile broadband coverage to Pan India and additional 200 MHz spectrum in frequency bands of 2300 MHz and 2500 MHz to address the future requirement of capacity.

Idea Cellular is gearing to expand its wireless broadband coverage using the spectrum won in recently concluded spectrum auction and plans to spend incremental equipment capex of Rs 1000 crore in FY17. With this, the capex guidance is revised from an earlier level of Rs 6500-7000 crore to Rs 7500-8000 crore, the company said.

Zee Entertainment Enterprises rose 0.59% after consolidated net profit rose 27.05% to Rs 238.38 crore on 19.65% increase in net sales to Rs 1655.77 crore in Q2 September 2016 over Q2 September 2015. The result was announced during trading hours today, 25 October 2016. Zee Entertainment Enterprises' advertising revenues grew by 15.7% to Rs 959.20 crore in Q2 September 2016 over Q2 September 2015. Domestic advertising revenues were Rs 880 crore while International advertising revenues stood at Rs 79.20 crore for the quarter.

Subscription revenues rose 21.7% to Rs 583.30 crore in Q2 September 2016 over Q2 September 2015. During the quarter, domestic subscription revenues stood at Rs 467.50 crore while international subscription revenues stood at Rs 115.80 crore. Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) rose 36.40% to Rs 489.20 crore in Q2 September 2016 over Q2 September 2015. EBITDA margin stood at 28.9%.

Adani Ports and Special Economic Zone jumped 9.43% after consolidated net profit rose 60.97% to Rs 1090.81 crore on 23.56% increase in total income to Rs 2416.77 crore in Q2 September 2016 over Q2 September 2015. The result was announced during trading hours today, 25 October 2016. The company's consolidated operating income rose 21% to Rs 2183 crore in Q2 September 2016 over Q2 September 2015. Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 23% to Rs 1451 crore in Q2 September 2016 over Q2 September 2015. In Q2 September 2016, APSEZ handled cargo of 43 million metric tonnes (MMT), a growth of 17% over Q2 September 2015.

In a separate announcement during trading hours today, 25 October 2016, the company said its board of directors gave in-principle approval for issue of non-convertible debentures for an aggregate amount not exceeding Rs 2000 crore in one or more tranches on private placement basis.

The Sensex has risen 225.46 points or 0.8% in this month so far (till 25 October 2016). The Sensex has risen 1,973.88 points or 7.55% in calendar year 2016 so far (till 25 October 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 5,596.81 points or 24.88%. From a 52-week high of 29,077.28 hit on 8 September 2016, the barometer index has fallen 985.86 points or 3.39%. The Sensex is off 1,933.32 points or 6.43% from a record high of 30,024.74 hit on 4 March 2015.

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