Sensex reports weekly loss of 1.6%

Fri, 6 Feb Closing

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Indian market ended the day on a weak note, with the BSE-Sensex closing lower by about 133 points or 0.5%, while the NSE-Nifty closed lower by about 50 points or 0.6%. Barring IT and FMCG stocks, weakness was seen across the board. Midcaps and smallcaps closed the day on a dull note, with their respective indices down by about 1.1% and 1.8% respectively.

Asian stocks ended the day on a firm note; while stocks in Europe were trading mixed at the time of writing. The rupee was trading at Rs 61.736 to the dollar.

Stocks of auto ancillary companies ended the day on a weak note with Munjal Showa and Amtek Auto leading the pack of losers. Battery manufacturer Exide Industries announced its result for the quarter and nine month period ended December 2014. During the quarter, the company reported a revenue growth of 19.5% YoY, led by a volume increase in both the automotive and industrial segments. It is believed that there was no effect of price increase in the results. At the operating level, the company reported a margin expansion to the tune of 0.7% YoY during the quarter, mainly due to lower employee costs and other expenses (as percentage of sales). As for profits, the same grew by 25% YoY, in line with the growth in operating profits. The stock of the company ended lower by about 4% today.

Auto stocks ended the day on a weak note with Tata Motors, Escorts and Mahindra & Mahindra leading the pack of losers. Tata Motors closed the day lower by about 5%. Weakness in the stock on was due to the company disappointing with its numbers for the quarter ended December 2014. The company's consolidated profit declined by a fourth, mainly due to one time provisions. As for the standalone business, the same reported a net loss of Rs 21 bn as compared to profit of about Rs 13 bn last year. Losses included a one-time provision of Rs 3 bn for the Singur plant, as well as another Rs 3 bn exceptional item which included inventory write offs amongst others. Consolidated revenues rose by 10% YoY, largely due to higher volumes and a change in product mix. Revenues of the M&HCV sales were up by 43% YoY, while LCV sales fell by about 9% YoY. The passenger vehicle segment grew by 5% YoY in line with the industry growth. Going forward, the company expects to remain in investment mode, which is why the management stated that cash flows in the coming year are expected to be in the negative zone.