The market may edge higher in early trade on firm Asian stocks. Asian stocks rose on Thursday after the US Congress voted to end the government shutdown and raise the debt ceiling. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 11 points at the opening bell. The domestic stock markets remained closed on Wednesday, 16 October 2013, on account of Bakri Id.
Axis Bank unveils its Q2 results today, 17 October 2013.
HCL Technologies' consolidated net profit rose 18.7% to Rs 1416 crore on 14% rise in revenue to Rs 7961 crore in Q1 September 2013 over Q4 June 2013. The company announced Q1 result before market hours.
The Chairman & Chief Strategy Officer Shiv Nadar, HCL Technologies said "Against the backdrop of encouraging macro economic trends, these results cement HCL's position as a company with a strong and differentiated business model. HCL remains well positioned in both existing and emerging momentum markets - with exceptionally strong customer relationships driving sustainable growth."
The President and CEO, HCL Technologies, Anant Gupta said, "YoY growth of 42.8% in net income and 14.1% in revenues continues the 8 successive quarter of HCL's story of profitable growth. Our focus on Generation 2 propositions like Enterprise of the Future in ITO and ALT ASM in Application Services continues to drive the company's quality of revenue."
Bajaj Auto's net profit rose 13% to Rs 837 crore on 3% rise in turnover to Rs 5299 crore in Q2 September 2013 over Q2 September 2012. The company announced Q2 result on Wednesday, 16 October 2013. The net profit of Rs 837 crore is the highest ever quarterly profit recorded by the firm so far. The company recorded an all time high operating earnings before interest, tax, depreciation and amortization (EBITDA) margin of 23.1% in Q2 September 2013 as against 21.3% in Q1 June 2013 and 18.7% in Q2 September 2012.
After payment of dividend and cash theron amounting to Rs 1518 crore during Q2 September 2013, as on 30 September 2013, surplus cash and cash and cash equivalents stood at Rs 6516 crore. As on 30 June 2013, surplus cash and cash and cash equivalents stood at Rs 6391 crore.
The company said that the outperformance in margins can be attributed to factors including transforming itself into an Indian multi national company with international business contributing 40% of total revenue. Over the last five years, strategic initiatives taken in order to enter into difficult markets like Africa is yielding rich dividends. The benefits are now further enhanced with rupee depreciation, it said. The company has focused on high margin products with 75% of Bajaj Auto's revenue generated by business verticles which operate on EBITDA margins in excess of 20%. The company also said that it operates on an essentially variable cost structure with fixed cost, including depreciation, interest and even employee cost was under 8%. This protects the company from any slowdown in demand as being witnessed in the domestic market over last few quarters.
Hindalco Industries in its reaction to the media reports that the Central Bureau of Investigation has named Hindalco and Aditya Birla Group Chairman Kumar Mangalam Birla in another high profile chargesheet in the coal scam after trading hours on Tuesday, 15 October 2013 said that the FIR seems to be a part of a larger case entailing coal allocation, and being one of the companies, Hindalco is also being investigated. "We wish to state unambiguously that we have followed every process required for allocation of coal completely as stipulated by the government," Hindalco said in a statement.
The company's Managing Director D. Bhattacharya in a separate statement said "On the unfounded allegations, reported by the media, on the CBI FIR against Hindalco and Chairman, Mr. Kumar Mangalam Birla, the reality of the matter is very different from what has been projected".
"In fact, the application for the Talabira II mine was made in 1996 by Indal, the Indian subsidiary of Alcan, the Canadian aluminium major. Indal was acquired by Hindalco in the year 2000, after which Hindalco pursued the matter further. The actual allocation of the mine was done in November 2005, which is nine years after the first application was made".
"In the interim, Hindalco made several representations to the Government as any corporation would normally make in such circumstances, and only through formal channels. To imply that our Chairman, Mr. Kumar Mangalam Birla, managed to overturn the decision of the Screening Committee, is preposterous. The truth of the matter is that the Talabira II and III mines together have been finally allotted jointly to Mahanadi Coal Fields and Neyveli Lignite, both public sector undertakings, with Hindalco having only a 15% stake in the joint venture. The project for which this mine was allocated is ready to commission later this month, whereas the clearances to permit mining have not been received so far. Consequently, no mining has been carried out. This will mean delayed returns from our project, which has been set up on a capex of over Rs 11000 crore".
"We hope this puts in perspective the struggle Hindalco has had to undergo for securing the coal and the irrecoverable economic loss that Hindalco has had to suffer. In the light of these facts, the allegations made are paradoxical" he added.
IT major TCS' consolidated net profit rose 20.7% to Rs 4633 crore on 16.6% growth in revenue to Rs 20977 crore in Q2 September 2013 over Q1 June 2013. Operating margin stood at 30.1% in Q2 September 2013. The result was announced after market hours on Tuesday, 15 October 2013.
Commenting on the Q2 performance, TCS Chief Executive Officer and Managing Director, N Chandrasekaran said: "It has been another great quarter. We have demonstrated all-round strong growth across markets and industries, highlighted by efficient and rigorous execution. Our ongoing investments in industry-led solutions and our efforts to provide insights and articulate the relevance of the digital revolution to business is helping us gain mindshare with customers and differentiate the TCS brand in the market. We continue to see a robust demand pipeline across markets and a unique opportunity to strategically partner and participate with clients as they reimagine their future in multiple dimensions".
TCS Chief Financial Officer Rajesh Gopinathan said: "Strong volumes, currency tailwinds and firm execution helped us post industry leading operating margins in this quarter. Our ability to manage operations with a degree of discipline has helped maintain the tempo of investments needed to sustain growth as well as provide superior shareholder returns".
TCS said that growth in Q2 was broad-based with all industries contributing to this holistic performance. Growth was led by Life Sciences, Media, Energy & Utilities and BFSI. All core markets grew smartly with Europe, North America and UK leading the pack, TCS said. There was balanced growth across IT and other service lines led by Asset Leverage Solutions, Assurance, Enterprise Solutions, Engineering Services and Infrastructure, TCS said.
Bank stocks will be in focus after the latest data showed that the loan as well deposit growth of the banking sector has been slower so far in the current fiscal year than the Reserve Bank of India's full-year projection. Banks' loans grew about 11% to Rs 58.46 lakh crore, while deposits rose 12% to Rs 75.64 lakh crore during the period from 22 March 2013 to 4 October 2013. The RBI has projected loans to grow at 15% and deposits by 14% in the current fiscal year ending in March 2014. Banks' investments in government securities rose 12% to Rs 22.47 lakh crore during the period from 22 March 2013 to 4 October 2013.
Reserve Bank of India Governor Raghuram Rajan on Tuesday, 15 October 2013, said that the economy will pick up by the year-end thanks to the start-up of billions of dollars worth of stalled resource projects and a good monsoon season that will bolster agricultural production. He said about half of the $115 billion worth of stalled projects had been cleared. Rajan also said that the question of using interest rates to address inflation is more complicated in India than in the United States. "In the US you know there is a large interest rate-sensitive sector that is going to be affected when you raise interest rates ... But what if you have a large part of the country that is not connected directly to the financial system?" he said, referring to India's massive rural population.
Key benchmark indices edged lower in choppy trade on Tuesday, 15 October 2013 as inflation rates continued to accelerate in September 2013, adding to concerns that the central bank is likely to increase its main lending rate again. The S&P BSE Sensex shed 59.92 points or 0.29% to 20,547.62 on that day, its lowest closing level since 11 October 2013.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1136.23 crore on Tuesday, 15 October 2013, as per provisional data from the stock exchanges.
Asian stocks rose on Thursday after the US Congress voted to end the government shutdown and raise the debt ceiling. Key benchmark indices in China, Indonesia, South Korea, Japan, Hong Kong and Taiwan rose 0.05% to 1.17%.
US stocks rose on Wednesday after US lawmakers came to an apparent deal to lift the debt ceiling and reopen government operations. The US ended the nation's fiscal impasse as the Senate and the House of Representatives voted to halt the government shutdown and raise the US debt limit as the deadline loomed today. President Barack Obama said he will immediately sign the agreement. The deal concludes a fiscal standoff that began with Republicans demanding the defunding of Obama's 2010 health-care law and objecting to raising the debt limit and funding the government without attaching policy conditions. They achieved almost none of those goals in the agreement.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus amid concerns about the strength of the economic recovery.
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