Profit booking takes toll...

Tue, 3 Feb Closing

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While the Indian markets opened the day's proceedings on a firm note, selling intensified in the subsequent hours and pushed the indices into the red. There was no respite in the final trading hour either and the indices closed well below the dotted line. The BSE-Sensex closed lower by about 122 points, while the NSE-Nifty ended lower by about 41 points. Losses were largely seen in banking and auto stocks, while those from the FMCG and oil & gas spaces managed to buck the trend. The BSE Mid Cap index and the BSE Small Cap index were not spared either and closed lower by 0.3% each.

Asian stock markets ended the day on a mixed note, while stocks in Europe were trading in the green. The rupee was trading at Rs 61.69 to the dollar at the time of writing.

Auto stocks closed in the red today with the key losers being Bajaj Auto, Mahindra & Mahindra (M&M) and Ashok Leyland. Ashok Leyland announced results for the third quarter and nine months ended December 2014. The company's revenues surged by 72% YoY during the quarter. The MHCV segment, in the last two years, has been badly impacted by the economic slowdown, thereby dragging Ashok Leyland's performance along with it. However, as was the case in 2QFY15, this quarter was a strong one for the company led by a ramp up in volumes most notably exports. ALL's operating margins improved to 7.1% during the quarter on account of benefits of operating leverage, a tight rein on costs and a better sales mix. Led by the strong performance at the topline and operating profit level, the company reported a net profit of Rs 321 m during the quarter as against a loss of Rs 1.6 bn during 3QFY14.

Auto ancillary stocks closed mixed today. While Bharat Forge and Amara Raja Batteries found favour, Bosch and Munjal Showa closed into the red. Bharat Forge announced results for the third quarter and nine months ended December 2014. On a standalone basis, the company's sales grew by a robust 44% YoY, while growth in net profits was even better at 109% YoY. Operating margins improved by 4.4% to 30.2% during the quarter. As far as revenues are concerned, growth was led by both the domestic market as well as exports although the latter did particularly well. Indeed, while domestic revenues grew by 24% YoY, growth in exports stood at a healthy 53% YoY. Growth in India was led by the strong performance of the commercial vehicles sector, particularly MHCVs. As far as exports are concerned, growth was largely fuelled by the North American market.