Wednesday, April 29, 2009

Closing Bell 29 April 2009

Closing Bell 29 April 2009

The Indian markets continued their upwards momentum as buying activity persisted till the final minutes of today's trading session. The BSE-Sensex ended the day with gains of around 400 points, while the NSE-Nifty closed higher by about 120 points. Stocks from the mid-cap and small-cap space ended the day on a firm note, higher by 2% and 1.3% respectively. Buying activity was witnessed in stocks across sectors led by IT, banking and energy.

Barring Japan, other Asian markets ended the day on a firm note. The European indices are currently trading firm as well. Rupee was trading at 50.12 against the US dollar at the time of writing.

Dabur India announced its FY09 results a short while ago. On a standalone basis, the company grew its sales and profits by 15% YoY and 18% YoY respectively during the year. For the fourth quarter, sales and profit growth stood at 17% YoY and 16% YoY. The company's operating margins contracted marginally by 0.3%, to 17.8%. The company's consumer care business (77% of total sales) grew by 14% YoY during the year, thereby leading the overall performance. Dabur's board of directors has recommended a final dividend of Re 1 per share. Along with the 75 paisa interim dividend paid in February 2009, this takes the total dividend for the year to Rs 1.75 per share (dividend yield of 1.7%).

Auto stocks ended the day on a firm note led by Tata Motors, M&M and Maruti Suzuki. As per a leading business daily, Tata Motors' international brands, Jaguar and Land Rover (JLR) are likely to make their official entry into India this year. While the plans are still to be finalised, the company has stated that the launch is likely to take place in a few months. It may be noted that as compared to its peer group of luxury car makers (who have assembly plants in India), JLR cars will have to be sold at a 110% markup in price due to customs duty as they will be directly imported from UK. Also considering that the volumes in the initial period of the launch will be low, their contribution to the companies' topline will marginal.

The world's largest steel producer Arcelor Mittal announced its 1QCY09 results. It reported a net loss of around US$ 1.1 bn as against a net profit of US$ 2.4 bn during last year. The sales of the company slumped by around 49% YoY to US$ 15.1 bn mainly on account of lower demand and falling steel prices. It recorded a one-time charge of US$ 1.2 bn in the first quarter, mostly to write down the value of stockpiles, while steel shipments fell 45% to 16 m tonnes. It may be noted that weak orders from automakers and builders have pushed global steel prices to a six-year low and steel consumption is estimated to decline by around 15% in 2009 as per the World Steel Association report. However, the company expects the prices to increase in major markets during the second and third quarter of 2009.

The Indian markets continued their northward journey on account of sustained buying activity witnessed during the previous two hours of trade. Currently stocks from the engineering, auto and banking sectors are leading the pack of gainers, while select stocks from the cement, telecom and aluminium sectors are trading weak. The overall advance to decline ratio is poised at 1.3 to 1 on the BSE.

The BSE-Sensex and NSE-Nifty indices are trading higher, up by almost 260 points and 75 points respectively. The BSE-Midcap and BSE-Smallcap indices are also trading higher, up by 1.2% each. The rupee is trading at 50.21 to the dollar.

Pharma stocks are trading mixed. While Sun Pharma and Lupin are trading higher, Dr Reddy's and Ranbaxy are trading lower. As per a leading business daily, Dr Reddy's has forayed into the anti-acne segment by launching Nexret in the domestic market. It may be noted that anti-acne is a common condition diagnosed by the dermatologists. Nexert will be available in gel form in a pack size of 15 gm. It may be noted that the domestic anti- acne markets is estimated to be growing at 14% and currently the market size is around Rs 1.3 bn. Thus, it provides a tremendous opportunity for topline growth for Dr Reddy's.

Engineering stocks are trading higher led by Punj Lloyd, Siemens and BHEL. As per a leading business daily, India's largest power equipment manufacturer BHEL is looking to improve the quality of its equipments and cut down on delivery times. This comes on the back of an increasing number of attempts by Chinese power equipment manufacturers to pursue Indian power generation companies with their low cost machines. One major concern that BHEL's customers have is the relatively longer delivery times of its machines. However, lately the company has been working on cutting down the delivery time significantly. In fact, as per the company, many clients who have evaluated the Chinese equipment closely have later chosen to take BHEL equipment instead.

The Indian markets continued to trade in the green during the previous two hours of trade on the back of intense buying activity witnessed in the index heavyweights. The stocks from the software, banking and power sectors are leading the pack of gainers, while select realty and auto stocks are trading weak. The overall advance to decline ratio is poised at 1.3 to 1 on the BSE.

The BSE-Sensex and NSE-Nifty indices are trading firm, up by around 230 points and 70 points respectively. The BSE-Midcap and BSE-Smallcap indices are also trading firm, up by 0.7% and 0.9% respectively. The rupee is trading at 50.23 to the dollar.

Software stocks are trading firm led by Wipro, Infosys and TCS. As per a leading business daily, Wipro BPO, the outsourcing arm of Wipro is likely to add around 1,200 employees over the next six months for its Hyderabad facility. Wipro BPO currently employs around 22,000 employees and contributes 7% of overall Wipro's revenue. Though the global slowdown has impacted the IT industry, the BPO segment is expected to grow as it helps clients reduce their operating costs. The move is as per Wipro's strategy to de-risk its business model by focusing on fast growing verticals. It may be noted that industry body, NASSCOM has reported that the Indian BPO industry is expected to grow five-fold by 2012.

GSK Pharma announced its 1QCY09 results yesterday. The company's topline grew by 9% YoY during the quarter largely led by growth in sales of vaccine products and its two new launches. The operating margins grew by a mere 0.2% YoY to 24.6% during the period. The company's net profits recorded a growth of 18% YoY on account of exceptional income. However, excluding the same, the profits recorded a growth of 8% YoY in 1QFY09. Further, the company plans to launch two new drugs and will also explore the possibility of acquiring established brands during the current fiscal. The stock of GSK Pharma is trading weak currently on the bourses.

The Indian markets started the day's proceeding on a firm note. Buying is currently being witnessed across sectors with the banking and IT sectors leading the gainers. The overall advance to decline ratio is poised at 1.9 to 1 on the BSE. As regards global markets, while the US markets ended in the red, European markets too closed in the negative. The Asian indices are currently trading mixed.

While the BSE Sensex is trading higher, up by around 200 points, NSE Nifty is also trading higher, up by 60 points. The BSE Midcap and Smallcap indices are trading lower by 1.3% and 1.1% respectively. The rupee is trading at 50.26 to the dollar.

Bharti Airtel announced its FY09 results just a short while ago. The company has grown its consolidated topline and bottomline by 38% YoY and 23% YoY during FY09, largely fueled by a 52% YoY growth in the subscriber base. The company has around 94 m GSM mobile subscribers at the end of March 2009. Its average revenue per user (ARPU) however came under pressure, declining by around 15% YoY. Bharti has recommended its maiden dividend (Rs 2 per share) and has also announced a stock spilt in the ratio of 2:1 i.e. sub-division of existing equity shares of Rs 10 each (face value) into two equity shares of Rs 5 each. While the stock is currently trading marginally in the positive, major gainers from the sector include Tata Communications and Reliance Communications.

IDFC announced results yesterday. Its consolidated interest income grew by 30% YoY in FY09, despite a staid 2% YoY growth in advances. While its disbursements dropped by 33% YoY, approvals dropped 49% YoY in FY09. The bank's asset management fees increased 4 times and its total asset under management (AUM) stood at Rs 240 bn at the end of March 2009.Its net interest margins (NIM) improved from 2.9% in FY08 to 3.1% in FY09 despite higher costs. Its non-interest income dropped by 1% YoY in FY09 due to lower investment banking and loan related fees, while its bottomline grew by a mere 1% YoY in FY09 due to higher operating cost and tax incidence.


Compiled and Brought to you by 

Equity Research Team

Intelligent Investor -
Invest Advisory Arm of

Ravina Consulting
Bangalore India

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