21st October, 2013 : Comments by Amar Ambani, Head of Research, India Infoline (a well diversified financial services comp any)
Though the gains were marginal for the day, the indices put up a good show to make headlines for the Nifty. Strong set of quarterly numbers from index heavyweight like Larsen & Toubro (L&T) and index constituent Asian Paints saw the Nifty index close above the 6200 mark for the first time since November 2010.
L&T reported 14.05% fall in net profit to Rs9.77bn on 10.59% rise in total income to Rs149.59bn in Q2 September 2013 over Q2 September 2012. However, L&T reported 7% rise in recurring profit after tax (PAT) to Rs9.78bn. Orders inflow rose 27% to Rs265.33bn in Q2 September 2013 over Q2 September 2012. International order inflow more than doubled contributing 43% of the total order inflow on the back of a few orders for large projects in the Middle East.
Commenting on the same, Amar Ambani, Head of Research, IIFL, said, “Order inflow remained strong yoy and Standalone revenue of Rs145bn was marginally higher than our estimate. Margins for most of the segments was higher on a yoy basis, but overall margins were impacted by one–offs. Margin pressure and execution risks will keep earnings in check; L&T remains our bet in the Infra space.”
Index component Asian Paints’ also reported better than expected results. Consolidated net profit rose to Rs3.27bn in the September quarter compared to Rs2.39bn year-on-year. Net sales, during the period, stood at Rs30.84bn yoy.
Contributing to the upswing today was the capital goods, realty, metals and power stocks. However, the broader indices stole the show as both the mid-cap and the small-cap index outperformed the benchmark indices gaining 1% and 1.2% respectively.
On the other hand major laggards were the IT, FMCG and select telecom stocks.
Finally, BSE Sensex closed at 20894 up 11 points, while NSE Nifty closed at 6, 205 up 16 points over the previous close.
Asian Paints, L&T, DLF, IDFC, Maruti, IndusInd Bank, NMDC, Hindalco, Tata Steel and Bank of Baroda were among the top gainers.
Jindal Steel, ITC, TCS HCL Tech, BHEL, Bharti Airtel, HDFC Bank, Dr Reddy’s Labs and Grasim were among the major losers in the Nifty.
The advance-decline ratio favoured the bulls. On the BSE, 1452 stocks advanced against 985 declining stocks, while 157 remained unchanged.
The INDIA VIX edged higher by 0.3% to close at 20.18. It hit a day’s high of 21.10 and low of 19.16.
HDFC reported a net profit of Rs12.66bn for quarter ended September 2013, up 10%, against a net profit of Rs11.51bn in the corresponding quarter last fiscal. Net interest income for the quarter stood at Rs18.14bn, up 11%, against Rs 16.33bn in year-ago period. The stock was up 0.7% to close at Rs825.
Shares of Private sector lender Federal Bank jumped 10% to hit its highest level since July 22 after the company has recorded a modest rise of 5% in net profit for the July-September quarter this year.
Shares of Petronet LNG dipped nearly 3% to close at Rs124 after reporting a sharp 42% year on year (yoy) decline in net profit at Rs1.82bn for the quarter ended September 2013 (Q2).
Hindalco Industries was up 3% after Prime Minister Manmohan Singh’s office reportedly said that he is satisfied with the outcome of the process of allocating coal blocks to certain companies
Shares of Ranbaxy Laboratories were up 2% after the company received CDSCO approval to market Synriam in India for treatment of malaria caused by Plasmodium vivax parasite.