The market rose last week after a government data showed that inflation based on the wholesale price index (WPI) eased to five-month low at 6.16% in December 2013. Easing inflation provides legroom for the central bank to cut interest rates in its next policy meet in order to bolster growth. Firm global stocks also boosted sentiments. Weaker-than-estimated US employment data released last Friday, 10 January 2014, cheered financial markets, as global investors feel the US Federal Reserve may not accelerate the pace of reduction in its monthly bond purchases.
The S&P BSE Sensex rose 305.13 points or 1.47% to 21,063.62. The 50-unit CNX Nifty rose 90.20 points or 1.46% to 6,261.65.
The BSE Mid-Cap index fell 1.43% and the BSE Small-Cap index fell 1.42%. Both these indices underperformed the Sensex.
Key benchmark indices surged on Monday, 13 January 2014, as a weaker-than-estimated US jobs report eased concern that the US Federal Reserve may accelerate the pace of stimulus cuts. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets in recent years. India has been one of the biggest beneficiaries of foreign capital flows. The S&P BSE Sensex garnered 375.72 points or 1.81% to settle at 21,134.21. The CNX Nifty garnered 101.30 points or 1.64% to settle at 6,272.75.
Key benchmark indices edged lower on Tuesday, 14 January 2014, as world stocks fell after Federal Reserve Bank of Atlanta President Dennis Lockhart on Monday, 13 January 2014, said that the US economy is on solid footing and he would support continued cuts to stimulus. The S&P BSE Sensex shed 101.33 points or 0.48% to settle at 21,032.88. The CNX Nifty lost 30.90 points or 0.49% to 6,241.85.
Key benchmark indices flared up on Wednesday, 15 January 2014, after a government data showed that inflation based on the wholesale price index (WPI) eased to five-month low at 6.16% in December 2013. Easing inflation provided legroom for the central bank to cut interest rates in its next policy meet in order to bolster growth. Firmness in Asian and European stocks also boosted sentiment. The S&P BSE Sensex rose 256.61 points or 1.22% to 21,289.49. The CNX Nifty rose 79.05 points or 1.27% to 6,320.90.
Key benchmark indices edged lower in choppy trade Thursday, 16 January 2014, as European stocks declined. The S&P BSE Sensex lost 24.31 points or 0.11% to settle at 21,265.18. The CNX Nifty shed 2 points or 0.03% to settle at 6,318.90.
Key benchmark indices edged lower in a choppy trading session on Friday, 17 January 2014. The S&P BSE Sensex was down 201.56 points or 0.95% to 21,063.62. The CNX Nifty was down 57.25 points or 0.91% to 6,261.65.
Infosys rose 5.05% to Rs 3,728.05. The company raised its revenue growth guidance for the year ending 31 March 2014. The stock hit record high of Rs 3,759.90 in intraday trade on Friday, 17 January 2014. At the time of announcement of Q3 December 2013 earnings, Infosys, on 10 January 2014, raised its revenue growth guidance in both rupee and dollar terms for the year ending 31 March 2014. The company expects consolidated revenue in rupee terms to grow 24.4% to 24.9% for the year ending 31 March 2014 (FY 2014). This guidance is based on rupee dollar conversion rate of 61.81 for the rest of the financial year. The company expects consolidated revenue in dollar terms to grow 11.5% to 12% in FY 2014.
TCS fell 2.90% to Rs 2,215.65 as the company's third quarter results fell short of market expectations. The company's consolidated net profit rose 15.1% to Rs 5333 crore on 1.5% increase in revenue to Rs 21294 crore in Q3 December 2013 over Q2 September 2013. Operating profit grew 0.5% to Rs 6337 crore in Q3 December 2013 over Q2 September 2013. Operating margin was reported at 29.8% in Q3 December 2013. TCS announced the third quarter results after trading hours on Thursday, 16 January 2014.
TCS said growth in Q3 December 2013 was driven by industries like Life Science & Healthcare, Manufacturing, Media, Travel & Hospitality and Telecom. The company's broad based presence across markets and services helped overcome seasonal weakness in some markets. Europe led growth, driven by the continuous investments being made in that market, while North America and UK also grew during the quarter, TCS said in a statement. Among growth markets, Latin America, APAC and MEA registered strong growth. India business suffered from volatility and declined sequentially, TCS said. Among service lines, Business Process Services, Enterprise Solutions, Global Consulting were the leaders.
Wipro fell 0.38% to Rs 552.45. On a consolidated basis, the company's net profit rose 4.28% to Rs 2014.70 crore on 3.06% increase in total income from operations (net) to Rs 11,327.40 crore in Q3 December 2013 over Q2 September 2013. The result was announced after market hours on Friday, 17 January 2014
In dollar terms, IT services revenue were reported at $1,678.4 million in Q3 December 2013, an increase of 2.9% over Q2 September 2013 and an increase of 6.4% over Q3 December 2012.
IT services revenues in rupee terms was Rs 10330 crore in Q3 December 2013, an increase of 20% over Q3 December 2012.
IT services earnings before interest and tax (EBIT) was Rs 2380 crore in Q3 December 2013, an increase of 33% over Q3 December 2012.
Wipro expects revenues from IT services business to be in the range of $1,712 million to $1,745 million including the revenues from its acquisition. (The guidance is based on the following exchange rates: GBP/USD at 1.63, Euro/USD at 1.37, AUD/USD at 0.92, USD/INR at 62.0).
Engineering and construction major Larsen & Toubro rose 4.72% to Rs 1,001.15. The company will announce Q3 results on 22 January 2014. L&T announced during trading hours on Thursday, 16 January 2014, that it has recently secured new orders of Rs 1000 crore from the domestic market in its offshore and onshore hydrocarbon business segment.
Index heavyweight Reliance Industries (RIL) rose 3.23% to Rs 884.55. The company after market hours on Friday, 17 January, announced that its net profit rose 0.16% to Rs 5511 crore on 10.67% increase in total income to Rs 105826 crore in Q3 December 2013 over Q3 December 2012.
Meanwhile, a media report suggested that RIL is eyeing Petronas' 11% stake in $20-billion Venezuela project. RIL clarified to the stock exchanges during trading hours on Friday, 17 January 2014, that it continues to look for opportunities to grow its business internationally and cannot make any specific comment on the media report.
State-run GAIL (India) rose 1.45% to Rs 351.
Index heavyweight and cigarette maker ITC rose 0.74% at Rs 324.85. The company's net profit rose 16.25% to Rs 2385.34 crore on 13.4% increase in total income to Rs 9117.91 crore in Q3 December 2013 over Q3 December 2012. The company announced the results during market hours on Friday, 17 January 2014.
ITC said gross revenue grew by 12.9% to Rs 12223.44 crore in Q3 December 2013 over Q3 December 2012, driven by the new FMCG businesses and the Paperboards, Paper and Packaging segment. Within the FMCG segment, ITC said that the branded packaged foods businesses posted robust growth in revenues and enhanced market standing across categories by leveraging a portfolio of differentiated and innovative products.
ITC said its hotels business recorded a significant improvement in profitability aided by superior performance by ITC Grand Chola. ITC said that its agri business profits rose 19% in Q3 December 2013, driven by higher realisation and superior mix.
Two-wheeler maker Bajaj Auto rose 1.73% to Rs 1,934. The company's net profit rose 10.48% to a record Rs 904.55 crore on 4.67% decline in total income to Rs 5353.08 crore in Q3 December 2013 over Q3 December 2012. The result was announced during trading hours on Thursday, 16 January 2014.
Exports rose 23.5% to Rs 2123 crore in Q3 December 2013 over Q3 December 2012.
Operating earnings before interest, taxation, depreciation and amortization (EBITDA) before mark-to-market gain/loss rose 0.64% to Rs 1092 crore in Q3 December 2013 over Q3 December 2012. Operating EBITDA margin before mark-to-market gain/loss, edged up to 21.1% in Q3 December 2013, from 19.8% in Q3 December 2012.
Total automobile sales fell 11.88% to 9.93 lakh units in Q3 December 2013 over Q3 December 2012. Bajaj Auto said that sales during festive period, though reasonable, were not robust. Subsequently, in November and December, industry sales continued to remain sluggish, Bajaj Auto said.
Bajaj Auto said that the quarter witnessed a marked increase in input costs of steel, aluminium and other imported components.
Cash and cash equivalents as on 31 December 2013 stood at Rs 6920 crore, higher than Rs 6516 crore as on 30 September 2013, Bajaj Auto said in a statement.
Two-wheeler major Hero MotoCorp rose 1.71% to Rs 2,069.95.
Cipla (up 4.80%), HDFC (up 4.75%), Sesa Sterlite (up 2.09%), edged higher.
Telecom stocks tumbled as a surprise decision of Reliance Industries (RIL) to join the bidding for upcoming telecom spectrum auction slated for 3 February 2014 raised concerns of aggressive bidding in the auction which in turn could have an adverse impact on balance sheet of telecom firms. Bharti Airtel declined 5.87% to Rs 311.20.
The notes attracted huge investor interest with an order-book aggregating circa euro 600 million from high quality investor accounts. The success of tap on the existing bond emphasizes the continuing and strong belief of the investor community in Bharti's credit, Bharti Airtel said in a statement. Bharti had earlier in December 2013 raised euro 750 million in an inaugural benchmark euro issuance.
The notes have been priced at 275 basis points over the curve adjusted 5-year EUR Mid Swap with a fixed coupon of 4% per annum. Bharti will fully apply the net proceeds to refinance its existing debt.
RIL's entry could result in increase in competition in the telecom sector.
RIL will join Bharti Airtel, Idea Cellular as well as the local units of Vodafone Group PLC and Telenor ASA in bidding for bandwidth in the auction in February. The government aims to raise at least Rs 11000 crore through two sets of auctions, one for a national service and another for a portion of bandwidth in Delhi, Mumbai or Kolkata, collectively home to over 32 million Indians.
RIL will bid to operate both nationally and in the three cities. A successful bid would mark the company's re-entry into the phone business after spinning-off its cellphone unit Reliance Communications in 2005, to brother Anil Ambani, as part of the division of the business empire built by their late father, Dhirubhai Ambani.
The auctions are crucial for Bharti and Vodafone India, whose bandwidth usage rights are set to expire in Delhi, Mumbai and Kolkata. Reliance Communications also has permits up for renewal in some regions in November this year. The companies will have to bid successfully in the upcoming auction to continue operations. The rights to use bandwidth last for 20 years. Idea Cellular and the Indian unit of Telenor, are also bidding in the hopes of expanding their services.
The Department of Telecommunications, which will conduct the auctions, will scrutinize the bids and announce the final list of bidders on 20 January 2014.
Coal India dropped 5.52% to Rs 272.75. The stock turned ex-dividend on Friday, 17 January 2014, for dividend of Rs 29 per share for the year ending March 2014. Before turning ex-dividend, the stock offered a dividend yield of 9.58% based on the closing price of Rs 302.70 on Thursday, 16 January 2014.
Source : Capitalmarket.com
Equity Research Division
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