Indian markets close flat

Tue, 28 Jan Closing

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The unexpected rate hike announcement from the Reserve Bank of India in its monetary policy review led to a slump in Indian equity markets today. After a day-long volatile trading session, the markets closed on a flat note. Banking stocks stood weaker post the policy review and witnessed maximum selling pressures. That said, the BSE Mid Cap and BSE Small Cap stocks were in favor and the respective indices stood tad higher by 0.01% and 0.14% respectively. The BSE-Sensex closed lower by 24 points and the NSE-Nifty was seen down by 10 points.

On the global front, the Asian indices closed the day on a mixed note and most of the European indices opened the day in green. The rupee was trading at Rs 62.64 to the dollar at the time of writing.

Stocks from the automobile sector closed the day on a mixed note with Maruti Suzuki and Tube Investments leading the pack of losers whereas Escorts and Tata Motors were leading the pack of gainers.

As per leading financial news daily, India's biggest car maker, Maruti Suzuki, announced its earnings performance for the third quarter of FY14. The company reported a whopping 36% rise in profits driven by strong operational performance. On sequential basis, the profits grew 1.6% YoY. Due to Suzuki Powertrain merger, the YoY numbers are not comparable. The company Board has also decided to expand its manufacturing facilities in Gujarat. The board approved for purchase of land in Mehsana district of Gujarat after more than two years. On account of tepid market conditions, the expansion plans were on hold. The expansion plans will be implemented through a 100% Suzuki. Moreover, the Suzuki subsidiary will not sell vehicles manufactured in this plant to anybody else. Rather this subsidiary will produce vehicles as per the Maruti Suzuki requirements and will be sold to the company only.

Stocks from the Indian Pharma sector closed the day on a mixed note with Piramal Enterprises and Lupin Ltd leading the pack of losers and IPCA Labs and Glenmark Pharma leading the pack of gainers.

As per leading financial news daily, IPCA Labs declare its third quarter 2014 earnings today. The company reported 58% YoY growth in net profits and 18.8% YoY growth in total income from operations. According to the company statement, the Income from its domestic formulations business grew 16% to Rs 2.5 bn and exports rose 19% to Rs 5.3 bn YoY. The active pharmaceutical ingredients business in India recorded 12% YoY growth at Rs 419 m and exports of the same grew 16% YoY to Rs 1451 m during 3QFY14. On the operational front, the earnings before interest, tax, depreciation and amortisation jumped 37.3% YoY to Rs 2.17 bn and margin expanded 350 bps to 26.1% in the quarter gone by. IPCA Labs reported forex loss of Rs 24 m during 3QFY14 as against loss of Rs 186 m a year ago. The other income rose from Rs 39.7 m to Rs 54.2 m YoY during 3QFY14.