Monday, April 27, 2009

Closing Bell 27 April 2009

Closing Bell 27 April 2009

The Indian indices managed to end the day marginally above the dotted line as buying activity led the indices to pare off losses during the final trading session. The BSE-Sensex ended the day with gains of around 40 points. However, the NSE-Nifty closed lower by about 10 points. Stocks from the mid-cap and small-cap space however, ended the day on a negative note, lower by 0.4% and 1% respectively. Barring stocks from the banking and capital goods space, selling activity was witnessed in stocks across sectors. The realty and power sector stocks remained the top losers of the day. At the time of closing, the overall decline to advance ratio was poised at 1.2 to 1 on the BSE.

Other Asian markets ended the day on a mixed note. The European indices are currently trading weak. Rupee was trading at 50.12 against the US dollar at the time of writing.

Petronet LNG announced its FY09 results today. The company recorded a strong topline growth of 29% YoY during the year. Sales were higher on the back of better realisations and rupee depreciation. However, on account of a 32% YoY increase in expenses, the company's operating profits grew by a mere 4% YoY. Its operating margins declined to 10.7% from 13.2% last year. Profitability wise, the company recorded a 9% YoY growth in earnings. This is higher as compared to the operating profits on account of higher other income, which grew by 43% YoY. For 4QFY09, Petronet LNG's topline grew by 52% YoY, while its bottom line surged by 70% YoY. The stock along with its peers, GAIL and IGL, ended the day on a weak note.

Pharma stocks ended the day on a mixed note. While Dr. Reddy's and Lupin ended on a firm note, Wockhardt and Ranbaxy ended the day in the red. As per reports on BSE, Glenmark Pharma's US subsidiary Glenmark Generics, has received a tentative approval from the US FDA for marketing the generic version of the cholesterol-lowering drug 'Ezetimibe'. The company has received approval for selling the 10 mg tablet of this drug. 'Ezetimibe' is the generic version of Schering Plough and MSP Singapore Company LLC`s drug 'Zetia'. However, the company will be able to launch the drug only on receiving final approval from the US FDA. The launch is also subject to the resolution of litigation currently pending in the US courts. Once the approval is received, Glenmark will be able to exclusively market the drug for 180 days. 'Zetia' had garnered sales of US$ 1.5 bn during CY08.

Oil consumption figures for FY09 have been published. With the decline in India's GDP growth rate, crude oil imports and domestic off take of refined products have recorded the lowest growth in the last three years. As far as the future is concerned, it is believed that in the short term the election vehicles will help diesel consumption, while the Nano will increase demand over the long term. We believe that the long term trend in oil consumption in India is only going to be upwards given that the carbon footprint of an average Indian continues to be one of the lowest in the world.

The Indian markets gained ground during the previous two hours of trade as buying was witnessed at lower levels. While banking, telecom and engineering stocks are leading the pack of gainers, select pharma and power stocks are trading weak on the bourses currently. The overall advance to decline ratio is poised at 1.9 to 1 on the BSE.

The BSE-Sensex and NSE-Nifty indices are trading firm, up by around 125 points and 30 points respectively. The BSE-Midcap and BSE-Smallcap indices are also trading firm, up by 1.3% each. The rupee is trading at 49.98 to the dollar.

FMCG stocks are trading mixed. GSK consumer is trading firm, while Dabur India is trading weak currently. As per a leading business daily, Dabur India is planning to enter the apple soft drink market during the current month. The present rivals in the category include Coca-Cola's Fanta Apple and Parle Agro's Appy. The new launch is a part of Dabur's plans to enter the non-cola soft drink market, which is reporting a 30% YoY. Dabur hold 52% market share in the packaged fruit juice market, but is not present in the plain beverage segment. With this new launch, the company is hoping to address this big gap in its portfolio and also enter the low-priced beverage market. On account of rising health awareness among the consumers, the juice and juice-drinks market is witnessing strong demand. Currently pegged yearly at Rs 15 bn, the segment earns higher profitability than the carbonated drinks.

Textile stocks are also trading mixed currently. While Bombay Dyeing and Welspun India are trading firm, Raymond is trading in the red. Raymond had announced its 4QFY09 and FY09 results last weekend. The company's sales grew marginally by 4% YoY during FY09, while the topline declined by 18% YoY during 4QFY09. The company's full year operating margins have improved by 1.7% YoY to 8.6% due to higher realisations in the worsted fabric business. However, due to higher interest costs and a loss on foreign currency borrowing drained Raymaond's full year bottomline, which recorded a loss of Rs 2.7 bn compared to profit of Rs 662 m a year earlier. On account of loss during FY09, the company has not declared any dividends, barring record of continuous dividend payments during the earlier years.

The markets witnessed intense volatility during the previous hour of trade on account of alternate bouts of buying and selling activity. Currently, stocks from the banking, software and metal sectors are leading the pack of gainers, while select stocks from the pharma, power and energy sectors are trading lower. The overall decline to advance ratio is poised evenly on the BSE.

The BSE-Sensex and NSE-Nifty indices are trading lower, down by around 10 points and 20 points respectively. The BSE-Midcap and BSE-Smallcap indices are also trading lower by 0.4% and 0.6% respectively. The rupee is trading at 50.08 to the dollar.

Software stocks are trading mixed. While TCS and Wipro are trading higher, Infosys is trading lower. As per a leading business daily, India's largest IT company TCS plans to relocate its staff abroad to India in order to cut down its costs. TCS follows an onsite-offshore model and plans to do more work in India as it helps in saving costs and increasing efficiency. However, the company would continue to do work onshore. The relocation does not mean that it is winding up its operations abroad. It may be noted that during 4QFY09, the company brought back some of its US staff to India which resulted in savings of Rs 1.2 bn. The company also plans to hire around 24,855 people in India.

Compiled and Brought to you by 

Equity Research Team

Intelligent Investor -
Invest Advisory Arm of

Ravina Consulting
Bangalore India

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