Key benchmark indices edged higher as Asian and European stocks rose on speculation Federal Reserve policy makers won't announce any major changes to monetary stimulus when they conclude a meeting today, 30 October 2013. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year. The barometer index, the S&P BSE Sensex, was provisionally above the psychological 21,000 mark, having alternately moved above and below that level in intraday trade. The Sensex and the 50-unit CNX Nifty pared gains after hitting their highest level in nearly three years. The Sensex was provisionally up 92.99 points or 0.44%, off close to 65 points from the day's high and up about 85 points from the day's low. The market sentiment was boosted by data showing that foreign funds made substantial purchases of Indian stocks on Tuesday, 29 October 2013. The market breadth, indicating the overall health of the market, was positive.
Indian stocks gained for the second day in a row today, 30 October 2013.
Jindal Steel & Power dropped on weak Q2 result. Grasim Industries was flat after Q2 result. Index heavyweight and cigarette maker ITC gained in choppy trade. Dr Reddy's Laboratories scaled record high ahead of its Q2 result tomorrow, 31 October 2013. Lupin rose on strong Q2 result. Shares of cellular services major Bharti Airtel surged, with the stock shrugging off the company's weak Q2 results. IDBI Bank dropped on poor Q2 result. Oriental Bank of Commerce dropped on weak Q2 result.
The market edged higher in early trade as Asian stocks rose on speculation Federal Reserve policy makers won't announce any major changes to monetary stimulus for the US economy when they conclude a meeting today, 30 October 2013. A bout of volatility was witnessed as key benchmark indices recovered from lower level after giving away almost entire initial gains in morning trade. Key benchmark indices moved in a narrow range in positive zone in early afternoon trade. Key benchmark indices remained range bound in afternoon trade. Key benchmark indices surged and hit fresh intraday high in mid-afternoon trade. The Sensex and the 50-unit CNX Nifty, both, hit their highest level in nearly three years. It pared gains in late trade.
The market sentiment was boosted by data showing that foreign funds made substantial purchases of Indian stocks on Tuesday, 29 October 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 1103.04 crore on Tuesday, 29 October 2013, as per provisional data from the stock exchanges.
The market may remain volatile tomorrow, 31 October 2013 as traders roll over positions in the futures & options (F&O) segment from the near month October 2013 series to November 2013 series. The near month October 2013 derivatives contract expire tomorrow, 31 October 2013.
As per provisional figures, the S&P BSE Sensex was up 92.99 points or 0.44% to 21,021.90. The index jumped 157.58 points at the day's high of 21,086.59 in mid-afternoon trade, its highest level since 5 November 2010. The index rose 8.11 points at the day's low of 20,937.12 in morning trade.
The CNX Nifty was up 27.25 points or 0.44% to 6,248.15, as per provisional figures. The index hit a high of 6,269.20 in intraday trade, its highest level since 11 November 2010. The index hit a low of 6,222.60 in intraday trade.
The total turnover on BSE amounted to Rs 1930 crore, lower than Rs 2243.47 crore on Tuesday, 29 October 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,276 shares rose and 1,154 shares fell. A total of 179 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks rose and rest of them fell. ICICI Bank (up 2.44%), Bajaj Auto (up 2.22%), and Hindalco Industries (up 2.4%), edged higher from the Sensex pack.
Index heavyweight and cigarette maker ITC gained 1.62% to Rs 333.20 in choppy trade. The stock hit high of Rs 333.95 and low of Rs 325.60.
Jindal Steel & Power dropped 0.58% on weak Q2 result. The company's consolidated net profit fell 49.64% to Rs 454.94 crore on 7% increase in turnover to Rs 4983.84 crore in Q2 September 2013 over Q2 September 2012. The result was announced during trading hours today, 30 October 2013.
The company said the drop in earnings were caused largely due to drop of 12-15% in price levels and interest and depreciation burden of investments made in Angul phase - 1 steel plant and upgradation of Raigarh steel plant.
JSPL said it has a positive and optimistic outlook for Q3 December 2013 and Q4 March 2014.
JSPL's said total sale of steel products rose 16% to 7,39,879 MT in Q2 September 2013 over Q2 September 2012. Total sale of pellets increased 47% to 639227 MT in Q2 September 2013 over Q2 September 2012. Total power sales slumped 79% to 116 kilowatt hour (kWh) during the period under review.
JSPL said on the global front, Mazambique mining operations gathered further momentum and is now all set to achieve its rated capacity of 3 MTPA by 31 March 2014. Both Oman and South Africa units also exceeded their performance over the same quarter of the previous year.
The company's subsidiary, Jindal Power, reported a 16% rise in profit after tax to Rs 300.58 crore on 18% increase in turnover to Rs 664.90 crore in Q2 September 2013 over Q2 September 2012. Power generation increased 12% to 2099 million units in Q2 September 2013 over Q2 September 2012. Plant load factor (PLF) rose to 95.07% in Q2 September 2013 from 85.04% in Q2 September 2012.
Grasim Industries was flat after Q2 result. The company's consolidated net profit fell 27.42% to Rs 450 crore on 3.54% increase in revenue to Rs 6849 crore in Q2 September 2013 over Q2 September 2012. The result was announced during trading hours today, 30 October 2013.
Grasim said that its Viscose Staple Fibre (VSF) business recorded a satisfactory performance, given the challenging market conditions. Supported by capacity expansion at Harihar, production increased by 15% over last year. Sales volume at 93,025 MT was up by 9% led by higher exports. Though VSF demand is growing globally, the overcapacity in China created at the time of VSF boom has created pressure on realizations in global markets. The rupee depreciation led increase in pulp cost was offset by decline in caustic and sulphur prices. However, lower realisation resulted in marginal decline in operating profit in standalone business. Sequentially, operating profit rose by 29% with higher volumes as well as better realisation. Consolidated profit before interest, depreciation & taxes (PBIDT) of the business has also improved sequentially by 68% from Rs 161 crore to Rs 269 crore, supported by better performance from pulp units, the company said in a statement.
Grasim said its cement subsidiary, UltraTech Cement's performance was been impacted mainly on account of lower selling prices as well as subdued demand owing to monsoon impact and low offtake from the infrastructure and housing sectors. The benefit of softening in prices of imported coal was largely negated by the devaluation of the rupee. Optimization of the fuel mix helped in power and fuel cost reduction.
With the commissioning of the grinding unit (1.6 million tonnes per annum) at Jharsuguda, Odisha in October 2013, Cement capacity stands augmented to 55.5 million tonnes per annum. On commissioning of all the projects currently under implementation and the acquisition of Gujarat cement unit of Jaypee Cement Corp., UltraTech's cement capacity will increase to 70 million tonnes per annum, Grasim said.
The company said its chemical business reported a 26% rise in production and 20% growth in sales volumes, with uninterrupted operations at Nagda and the commissioning of the Caustic Soda plant at Vilayat (Gujarat) in Q1. Volumes will improve with the gradual ramp up of capacity. ECU realisations saw a correction from the peak level witnessed during fiscal year ended March 2013, even as it rose by 4% quarter-on-quarter (QoQ).
In its outlook, Grasim said that the VSF industry continues to face pricing pressure in the immediate term, given the surplus capacity in China. Capacity addition in China is expected to slowdown because of subnormal returns in industry currently. In Cement, the demand is expected to grow by 5% in the fiscal year ending March 2014 due to the slowdown in the GDP growth rate. It however should recover to over 8% with the improvement in the economic environment.
Capacity expansions in VSF and cement will provide additional volumes, driving growth and further consolidate the Company's leadership. This will enable the company to move forward rapidly, with the recovery in the market, the company said.
Pharma stocks gained. Cipla (up 0.38%) and Sun Pharmaceutical Industries (up 0.2%), gained.
Lupin rose 1.36% on strong Q2 result. The company's consolidated net profit rose 39.8% to Rs 406.20 crore on 16% growth in total revenue to Rs 2667.90 crore in Q2 September 2013 over Q2 September 2012. Operating profit rose 27.8% to Rs 659.60 crore in Q2 September 2013 over Q2 September 2012. Operating profit margin edged up to 24.7% in Q2 September 2013, from 22.42% in Q2 September 2012. The company announced Q2 result during market hours.
Revenue expenditure on R&D for Q2 September 2013 stood at Rs 217.20 crore or 8.3% of net sales, as against Rs 93.50 crore or 4.2% of net sales in Q2 September 2012.
Operating working capital increased to Rs 2674.30 crore as on 30 September 2013, from Rs 2516 crore as on 30 June 2013. The working capital number of days stood at 96 days as on 30 September 2013, compared with 94 days as on 30 June 2013. Debt equity ratio stood at 0.06 as on 30 September 2013.
Commenting on the results, Nilesh Gupta, Managing Director, Lupin, said: "Despite challenges in markets like India, we have had a good first half, driven by strong business growth from markets like US and improved operational efficiencies. Our growth story continues. This consistent performance has led to a sustained EBIDTA and PAT improvement".
Dr Reddy's Laboratories rose 4.21% to Rs 2,531 after hitting record high of Rs 2,540 in intraday trade. The company announces Q2 results tomorrow, 31 October 2013.
Ranbaxy Laboratories rose 2.68%, with the stock reversing intraday losses triggered by the company reporting net loss in Q3 September 2013 after trading hours on Tuesday, 29 October 2013. The company after market hours on Tuesday, 29 October 2013 reported consolidated net loss of Rs 454.16 crore in Q3 September 2013, compared with net profit of Rs 754.17 crore in Q3 September 2012. Total income increased 1.92% to Rs 2827.73 crore in Q3 September 2013 over Q3 September 2012.
Ranbaxy Laboratories said that the depreciation of the rupee against the dollar, though favourable to Ranbaxy's export business had an adverse impact on the company mainly on account of application of the accounting standards that require marking to market the entire derivatives and foreign currency denominated loans outstanding. There was a charge of Rs 360 crore during Q3 September 2013 on account of foreign exchange fluctuations, Ranbaxy said. The company made a provision for Mohali stock write-off and other costs amounting to Rs 70 crore.
Ranbaxy said that its base business sales in Q3 September 2013 continued to grow over the corresponding period of the previous year. Ranbaxy's global sales rose 2.99% to Rs 2750 crore in Q3 September 2013 over Q3 September 2012. The growth in sales was impacted adversely by the new pricing policy and trade concerns in India and the absence of any post exclusivity sales during the quarter, Ranbaxy said.
Commenting on the business results for the quarter, Mr. Arun Sawhney, CEO & Managing Director, Ranbaxy, said: "The company continues to grow in its focus branded markets in Asia, East Europe, CIS and Africa. In India, however, the announcement of the pricing policy caused some uncertainty in the market, during which our sales in the home market faced some disruptions. We are confident that we will satisfactorily address the increasing standards of quality and manufacturing processes to uphold the high level of trust that our doctors, patients, regulators and other stakeholders expect from us".
The board of directors of the company has decided to change the financial year of the company as "April to March" effective 1 April 2014. In view of this, the current financial year will be for a period of 15 months i.e. January 2013 to March 2014.
Ranbaxy said it expects to achieve sales of Rs 13000 crore to Rs 13500 crore for 15 months period ending 31 March 2014. This does not consider any sales accruing from FTFs which shall be accounted for as they materialize.
Bharti Airtel surged 5.22% after reporting Q2 result. The company's consolidated net profit declined 29% to Rs 512 crore on 9.9% increase in total revenue to Rs 21324 crore in Q2 September 2013 over Q2 September 2012. The company announced the result during market hours.
Bharti Airtel's consolidated EBITDA (earnings before interest, taxation, depreciation and amortization) jumped 15.1% to Rs 6832 crore in Q2 September 2013 over Q2 September 2012. EBITDA margin increased to 32% in Q2 September 2013 from 30.6% in Q2 September 2012.
The company said its mobile internet revenues grew more than 100% to Rs 1503 crore in Q2 September 2013 over Q2 September 2012 (year-on-year), accounting for 39.1% of the overall incremental revenue. Revenues were also enhanced by strong growths of 28.8% in Digital TV, 20.8% in airtel business (B2B), and 54.4% in South Asia.
Mobile voice realisation in India improved by 1.31 paise on a year-on-year (Y-o-Y) basis (36.74 paise in Q2 September 2013 vs 35.43 paise in Q2 September 2012), together with an increase in voice usage per customer by 20 minutes per month (up from 417 minutes in Q2 September 2012 to 437 minutes per subscriber in Q2 September 2013). Data usage per customer has gone up by 98 megabytes (MBs) (from 133 MBs in Q2 September 2012 to 231 MBs per customer in Q2 September 2013). Consequently, ARPU has moved up by Rs 15 to Rs 192 in Q2 September 2013.
International revenues grew by 17.9% Y-o-Y and 18.3% quarter-on-quarter (Q-o-Q) in rupee terms with Africa growing by 16.1% Y-o-Y & 18.5% Q-o-Q while South Asia grew by 54.4% Y-o-Y and 16% Q-o-Q. Africa revenue in constant dollar terms grew by 5.4% on sequential quarter basis led by a strong 28.2% increase in data revenues.
Mobile voice pricing in Africa remained stable at 3.30 cents per minute. Net revenue in Africa (after interconnect costs and cost of goods sold) has grown by 20.7% Y-o-Y in rupee terms.
Consolidated EBITDA (earnings before interest, taxation, depreciation and amortization) grew by 15.1% Y-o-Y at Rs 6832 crore with margin expanding to 32% from 30.6% in the corresponding quarter last year, driven by India EBITDA margin improvement from 32.6% to 34.8%.
The much improved operational performance is reflected in earnings before interest and taxes (EBIT) of Rs 2893 crore, representing a 28.7% Y-o-Y growth and 2% EBIT margin improvement.
The continued depreciation of the Indian rupee has resulted in forex restatement and derivative losses of Rs 342 crore (vs. Rs 25 crore loss for Q2 September 2012). Consequently, the consolidated net income came in at Rs 512 crore, as against Rs 721 crore in the corresponding quarter last year. Consolidated Operating Free Cash Flows for the quarter were at Rs 4693 crore, reflecting a robust growth of 117.1% Y-o-Y.
The company's consolidated net debt has reduced to $9697 million resulting in the net debt to EBITDA ratio (USD terms) improving to 2.18 times as compared to 2.59 times at the end of the same quarter last year.
In a statement, Mr. Sunil Bharti Mittal, Chairman, Bharti Airtel, said: "Mobile internet is now a major engine of growth for Airtel across all geographies. Our sustained investment in this segment will further enhance customer experience and seamless coverage. The revenue growth in Africa reflects the inherent potential in the world's most promising continent. I am also pleased to see the evolution of Airtel Money into a significant service in geographies which are relatively under-banked."
IDBI Bank lost 4.52% on poor Q2 result. The bank's net profit fell 60.23% to Rs 192.27 crore on 3.4% growth in total income to Rs 7114.44 crore in Q2 September 2013 over Q2 September 2012. The state-run bank announced the second quarter results during trading hours.
Oriental Bank of Commerce lost 4.26% on weak Q2 result. The bank's net profit declined 16.8% to Rs 251.41 crore on 3.45% growth in total income to Rs 4987.71 crore in Q2 September 2013 over Q2 September 2012. The Q2 result was announced during trading hours today, 30 October 2013.
Oriental Bank of Commerce (OBC)'s ratio of net non-performing assets (NPAs) to net advances increased to 2.69% as on 30 September 2013 as against 2.34% as on 30 June 2013 and 2.04% as on 30 September 2012. The ratio of gross NPAs to gross advances increased to 3.77% as on 30 September 2013 as against 3.36% as on 30 June 2013 and 2.92% as on 30 September 2012.
The bank's Capital Adequacy Ratio (CAR) as per Basel II norms stood at 12.09% as on 30 September 2013 as against 12.02% as on 30 June 2013 and 12.06% as on 30 September 2012. CAR as per Basel III norms stood at 11.43% as on 30 September 2013.
OBC's deposits grew 6.68% to Rs 175153.10 crore as on 30 September 2013 from Rs 164174.50 crore as on 30 September 2012. Advances rose 8.93% to Rs 128353.50 crore as on 30 September 2013 from Rs 117821.40 crore as on 30 September 2012.
OBC's provisions and contingencies rose 19.7% to Rs 550.52 crore in Q2 September 2013 over Q2 September 2012. Provision coverage ratio as on 30 September 2013 works out to 61.48%.
OBC's board of directors at a meeting held today, 30 October 2013, inter alia, has approved the proposal regarding raising of capital by way of preferential allotment of equity shares in favour of Government of India (GoI) amounting to Rs 150 crore.
In the foreign exchange market, the rupee trimmed intraday losses against the dollar. The partially convertible rupee was hovering at 61.34, compared with its close of 61.31/32 on Tuesday, 29 October 2013.
European stocks rose on Wednesday, 30 October 2013, extending their gains this month, as investors awaited a US private payrolls report and the outcome of a two-day Federal Reserve policy meeting. Key benchmark indices in France, Germany and UK rose 0.44% to 0.62%.
Asian stocks rose on Wednesday, 30 October 2013, amid rising company earnings and with the Federal Reserve projected to maintain the pace of its monetary stimulus today. Key benchmark indices in China, Japan, Hong Kong, Taiwan, Indonesia, Singapore, and South Korea rose 0.27% to 2%.
Factory output in South Korea contracted 3.6% last month from a year earlier, after rising 3.3% in August, the government statistician said today.
Trading in US index futures indicated that the Dow could gain 55 points at the opening bell on Wednesday, 30 October 2013. US stocks surged on Tuesday, 29 October 2013, as soft economic data supported expectations the US Federal Reserve will keep its stimulus measures intact for several months. Economic data showed consumer confidence in the US fell and an October 22 report revealed growth in American jobs slowed in September.
The Federal Open Market Committee's (FOMC) two-day policy meeting concludes today, 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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