Key benchmark indices trimmed initial gains in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 59.15 points or 0.29%, off close to 80 points from the day's high and up close to 5 points from the day's low. The market breadth, indicating the overall health of the market, was strong. Gains in Asian stocks and rally in US stocks overnight underpinned sentiment on the domestic bourses.
Pharma stocks gained. Aurobindo Pharma surged on strong Q3 results. Steel stocks were in demand.
The market edged higher in early trade on firm Asian stocks. The 50-unit CNX Nifty hits one-week high. Firmness continued on the bourses in morning trade. Key benchmark indices trimmed initial gains in mid-morning trade.
Asian stocks rose on Friday, 7 February 2014, as US jobless claims fell and investors weighed company earnings.
At 11:20 IST, the S&P BSE Sensex was up 59.15 points or 0.29% to 20,369.89. The index jumped 139.77 points at the day's high of 20,450.51 in early trade, its highest level since 3 February 2014. The index rose 52.84 points at the day's low of 20,363.58 in mid-morning trade.
The CNX Nifty was up 19.05 points or 0.32% to 6,055.35. The index hit a high of 6,079.95 in intraday trade, its highest level since 31 January 2014. The index hit a low of 6,051.05 in intraday trade.
The BSE Mid-Cap index was up 45.07 points or 0.72% at 6,344.66. The BSE Small-Cap index was up 40.94 points or 0.65% at 6,349.95. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,267 shares rose and 729 shares fell. A total of 131 shares were unchanged.
Among the 30-share Sensex pack, 21 stocks rose and rest fell. Tata Power Company (up 1.79%), Maruti Suzuki India (up 1.24%) and AXIS Bank (up 1.02%) edged higher from the Sensex pack.
Pharma stocks gained. Cipla (up 0.95%), Dr Reddy's Laboratories (up 1.13%), Lupin (up 0.73%), and Sun Pharmaceutical Industries (up 2.24%) gained. But, Ranbaxy Laboratories fell 0.92%.
Aurobindo Pharma rose 4.59% on strong Q3 results. The company's consolidated net profit jumped 354.8% to Rs 417.50 crore on 36.3% growth in total operating income to Rs 2140.60 crore in Q3 December 2013 over Q3 December 2012. The Q3 result was announced after market hours on Thursday, 6 February 2014.
Aurobindo Pharma's consolidated EBITDA (earnings before interest, taxation, depreciation and amortization) before forex surged 148.5% to Rs 643.80 crore in Q3 December 2013 over Q3 December 2012. EBITDA margin before forex increased to 30.1% in Q3 December 2013, from 16.5% in Q3 December 2012.
Formulation sales rose 57.5% to Rs 1436.10 crore in Q3 December 2013 over Q3 December 2012. Formulation sales constituted 65.9% of gross sales in Q3 December 2013 (58% in Q3 December 2012). API sales rose 12.8% to Rs 744.50 crore in Q3 December 2013 over Q3 December 2012. API sales constituted 34.1% of gross sales in Q3 December 2013 (42% in Q3 December 2012).
Commenting on the company's financial performance, Mr. N. Govindarajan, Managing Director, Aurobindo Pharma said, "We have had a robust quarter driven by our sustaining base business along with successful launches in US, translating into better top and bottom line. We are confident to sustain the momentum as we foray into strengthening our access into markets, products and technology platforms where we are not dominantly present as we consolidate on our existing businesses".
Jubilant Life Sciences surged 6.08% after the company at the time of announcement of its Q3 December 2013 results said that revenue and EBITDA are expected to improve in the coming quarters. The Q3 result was announced after market hours on Thursday, 6 February 2014.
Jubilant Life Sciences' consolidated net profit surged 437.39% to Rs 143.43 crore on 10.44% growth in total income from operations to Rs 1442.78 crore in Q3 December 2013 over Q3 December 2012.
The profit after tax (PAT) during the quarter was boosted by exceptional items.
Consequent to reevaluation of certain tax provisions pertaining to earlier years (including deferred taxes), tax benefit (net of reversal of deferred tax assets and true up of current tax) amounting to Rs 78.96 crore and Rs 56.35 crore has been recognized in the current quarter and nine months ended 31 December 2013 respectively, the company said.
Amortization of debit balance in foreign currency monetary items translation difference account (FCMITDA) of Rs 25.40 crore, Rs 38.74 crore, Rs 22.45 crore, Rs 89.65 crore, Rs 45.60 crore and Rs 63.16 crore for the quarter ended 31 December 2013, 30 September 2013, 31 December 2012; nine months ended 31 December 2013, 31 December 2012; and year ended 31 March 2013 respectively, representing exchange difference on long-term foreign currency monetary liabilities which has been used for the purpose other than acquiring fixed assets, Jubilant Life Sciences said. The remaining amount of exceptional items for all periods primarily represents foreign exchange difference for the period (excluding portion included in finance cost) and mark to market gain/loss (net of related contractual recoveries) in respect of currency and interest rate swap contracts, the company said.
Commenting on the company's performance, Mr. Shyam S Bhartia, Chairman & Managing Director and Mr. Hari S Bhartia, Co?Chairman & Managing Director, Jubilant Life Sciences said, "The performance of Q3 FY 2014 reflects the strengths of our diversified portfolio of businesses. We are strengthening our quality systems to ensure flawless compliance and deliver better value to our stakeholders. We expect to perform better going forward due to new product launches under Solid Dosage Formulations, scale up in Speciality Pharmaceuticals and higher volume in Vitamins and Acetyl businesses".
With regard to future business outlook, Jubilant Life Sciences said the revenues and EBIDTA are expected to improve in the coming quarters led by improved capacity utilisations in Sterile Injectables and OCL, Nutrition Ingredients, Symtet and 3CP and backward integration of Pyridine and expansion to newer markets. The company said it expects revenue growth due to strong pipeline in APIs and Solid Dosage Formulations, new product launches, expansion in newer geographies in API and Formulations, and robust order book in Sterile Injectables.
Steel stocks were in demand. Tata Steel (up 3.97%), Steel Authority of India (Sail) (up 1.61%), JSW Steel (up 1.58%), Jindal Steel and Power (JSPL) (up 0.6%), and Bhushan Steel (up 0.15%) gained.
Among metal stocks, Sesa Sterlite (up 2.28%), National Aluminum Company (up 0.61%) and Hindustan Zinc (up 1.27%) gained.
Hindustan Copper (down 0.16%), and Hindalco Industries (down 0.57%) declined.
Patel Engineering jumped 7.68% after the company said its consortium has emerged as the lowest bidder for the 1,000 megawatts Pakal DUL Hydroelectric Project. The company made the announcement after trading hours on Thursday, 6 February 2014.
Patel Engineering announced that the company in consortium with Limak of Turkey and state-owned Bhel has emerged as the lowest bidder for the 1,000 megawatts (MW) Pakal DUL Hydroelectric Project, one of the largest hydropower project in the country.
The project 1000 MW (4 x 250 MW) hydropower project is being set up in the District of Doda, Jammu & Kashmir. The project is to be completed in 66 months and when completed will meet the annual energy generation for 90% dependable year is 3387.47 MU. Four parties participated in the bidding process wherein consortium of Patel Engineering and Limak of Turkey and Bhel quoted lowest price of Rs 8904 crore. Bids quoted by Samsung-Coastal-Alstom, Impregilo-Gammon JV and Soma-Song Da-Power Machines were much higher, the company said in a statement.
Chenab Valley Power Projects, a joint venture floated by NHPC, JKSPDC and PTC India had invited tenders to implement Pakal Dul Hydroelectric Project. The project consists of over 160m high concrete faced rock-fill dam, large size 20 km of head race tunnel by TBM and underground power house. Bhel shall design, manufacture and commission 4 x 250 MW francis turbine generator units. Pakal Dul Hydroelectric is one of the three major power projects to be constructed by J&K State Power Development Corporation, National Hydroelectric Power Corporation and Power Trading Corporation of India in joint venture under Chenab Valley Power Projects. As per the agreement reached between the partners the share of JKSPDC, NHPC and PTC in the company shall be in the ratio of 49:49:2 respectively and of the total power generated from the projects, the share of JK shall be 62%, the company said.
Meanwhile, Patel Engineering said it has bagged new construction projects amounting to Rs 1110 crore. The new projects bagged the company includes the Rs 473.31 crore EPC contract and allied construction work for the 37.5 MW (3X12.5 MW) Parnai Hydro Electric project of Jammu & Kashmir State Power Development Corporation (IKSPDCI).
The company said it has also bagged Rs 66.64 crore construction work from the Metro Link Express for Gandhinagar & Ahmedabad (MEGA) Company for construction of retaining wall along the Sabarmati River bed. Other projects bagged by the company includes an Rs 307 crore irrigation project for Rapti Nahar Nirman Mandal -I, Irrigation Department, Balrampur, Uttar Pradesh. This project will be executed in joint venture with APCO. Further, the company has bagged an Rs 151.31 crore project for the construction of college administrative building for Indra Gandhi Institute of Medical Science in Patna. This project will be executed in joint venture with CICO. The company has also bagged a Rs 111.15 crore project in Bhilwara to construct offices for the Collectrate and Zilla Parishad.
In the foreign exchange market, the rupee edged higher against the dollar on global risk-on sentiment. The partially convertible rupee was hovering at 62.315, compared with its close of 62.365/375 on Thursday, 6 February 2014.
The government will announce the advance estimate of GDP for 2013-14 at around 17.30 IST today, 7 February 2014. The GDP grew 4.6% annually in the first half of the current fiscal year, down from 5.3% in the corresponding period a year ago. Growth slowed in almost all sectors, including services such as tourism, transport and telecoms.
Last week, the Statistics Ministry revised down GDP growth for the previous fiscal year to 4.5%, from an earlier estimate of 5%.
Finance Minister P Chidambaram will present the Vote-on-Account or interim budget on 17 February 2014. The objective of a Vote-on-Account is to get Parliament's nod for expenditure to be incurred in the months prior to elections. The next full-fledged budget will be presented by the new government which comes to power after the Lok Sabha polls in April-May 2014.
The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Sighting elevated consumer price inflation, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
Asian stocks rose on Friday, 7 February 2014, as US jobless claims fell and investors weighed company earnings. Key benchmark indices in Indonesia, South Korea, Japan, Hong Kong, Singapore and Taiwan rose 0.64% to 2.02%.
China's Shanghai Composite Index lost 0.24% as China's markets opened after Lunar New Year holidays. China's services sector grew at its slowest pace in almost 2-1/2 years in January after firms secured a smaller volume of new business, a private survey showed, adding to growing signs of slackening in the Chinese economy. The HSBC/Markit Services Purchasing Managers' Index (PMI) retreated to 50.7 in January, a low last seen in August 2011 though still above the 50-point level that demarcates growth and contraction. December's PMI was 50.9.
Trading in US index futures indicated that the Dow could advance 15 points at the opening bell on Friday, 7 February 2014. US stocks surged on Thursday, 6 February 2014, as investors welcomed a larger-than-expected drop in weekly jobless claims and upbeat earnings from companies including Walt Disney Co.
Initial jobless claims dropped for the first time in three weeks, falling 20,000 to 331,000 in the period ended Feb. 1, according to the Labor Department.
The influential monthly US jobs data for January 2014 will be released today, 7 February 2014.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion. The Fed also signaled that it is likely to keep reducing bond purchases in the coming months, citing a pickup in US economic activity and improvement in the US labor market.
In Europe, the European Central Bank kept interest rates unchanged on Thursday as officials chose to set aside concerns that inflation may stay low for too long. The 24-member Governing Council, convening in Frankfurt Thursday, left the main refinancing rate at 0.25%. The ECB also held the deposit rate at zero and the marginal lending rate at 0.75%. ECB President Mario Draghi said at a news conference that medium- and long-term inflation expectations remain well-anchored, with no real deflation risk.
The Bank of England kept its benchmark rate at a record-low 0.5%, while its bond-purchase plan stayed unchanged at 375 billion pounds ($611 billion) on Thursday.
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