Despite a good attempt to make inroads into the positive territory, the benchmark indices slipped back into the red during the previous two hours of trade. Stocks from the IT and telecom sectors are the ones weighing heavy on the markets, and are leading the list of losers currently. However, consumer durable and pharma stocks are seeing healthy gains.
The BSE Sensex and NSE Nifty are trading in the red, down by 40 points and 1 point respectively. The BSE-Midcap and BSE-Smallcap are trading up by 1.5% and 2.5% respectively. The rupee is trading at 46.28 to the dollar.
Wind turbine major Suzlon announced its quarterly results over the weekend. Its topline fell 19% YoY during 3QFY10. The order backlog at the end of January 2010 for Suzlon's standalone wind business stood at Rs 81 bn. Operating margins contracted to 4.6% from 11% in 3QFY09. The deterioration in margins was on account of an increase in all major operating cost heads (as percentage of sales) for the company. Excluding extraordinary items, the company's bottomline showed a loss of Rs 2.2 bn during the quarter. This was largely on the back of the contraction in operating margins, as well as increases in interest and depreciation costs during the quarter. The company has reduced its net debt by Rs 33 billion from Rs 138 bn in September 2009 to Rs 105 billion in December 2009. Part of this has been made possible by the company's stake sale in Hansen. Evidently, the company continues to pay the price for its over ambitious expansion by using tons of leverage. Suzlon is trading higher on the bourses currently.
As per a leading business daily, software behemoth Wipro has been empanelled by General Electric (GE) as one of the outsourcing vendors as part of a master services agreement (MSA) signed between the companies recently. This agreement with GE will allow Wipro to bid for nearly about US$ 1 bn worth of outsourcing projects put out by the different business units of GE every year. As per reports, while this does not guarantee assured contracts, GE will be a good account to have for Wipro over the long-term. This is because even if the micro environment is bad, one or the other GE units would have something to outsource and offshore. It may be noted that another such vendor for GE, TCS, does nearly US$ 150 to US$ 200 m worth of projects for GE annually. Software stocks are currently trading mixed, with HCL Infosys and Wipro leading the list of gainers.