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Major Asian stock markets have opened the day on a dismal note with stock markets in Hong Kong and South Korea trading lower by 4.3% and 2.8% respectively. Major indices in Europe and US ended their previous session on a positive note. The rupee is trading at 68.87 per US$.
Indian stock markets too have opened the day on a negative note. The BSE Sensex is trading lower by 128 points (down 0.6%) and NSE Nifty is trading lower by 33 points (down 0.5%). Both, BSE Mid Cap and BSE Small Cap are trading lower by 0.6% and 0.4% respectively. Major sectoral indices have opened the day on a negative note with stocks from metal and capital goods sectors witnessing maximum selling pressure.
Cipla Ltd reported its results for the quarter ended December 2015. The sales declined marginally by 0.4% YoY on the back of change in its sales distribution policy. Change in the distribution policy deferred the accounting of a portion of its sales of the current quarter to the succeeding quarter, thereby affecting the growth. Excluding this one off item, total sales have grown by 11% YoY.
On the domestic front, company's prescription and generics business reported a growth of 13% and 9% respectively. The company stated that its generic business have slowed down in the recent times. Further, exports grew by 28.5% YoY led by growth in South Africa and other emerging markets.
However, operating margins declined by more than 5% YoY because of the one off items, higher research & development expense and depreciation of South African currency. Reportedly, R&D expenses increased to 8% of sales from 6% a year ago.
Further, the company's net profit grew by 4.6% YoY. Going forward, sales from the US geography will be the key things to watch out for as the company has stepped up its product fillings in this geography.
ACC Ltd too reported its results for the quarter ended December 2015. The net sales grew by 3% YoY to Rs 28.5 billion. The sales growth was impacted due to weak demand in rural areas. Sales from rural India accounts for a significant chunk of the company's overall turnover. Reportedly, ACC's volumes growth has lagged behind the industry average. The company has also not been adding new capacities since some time. This has led to a continuous loss of market share to larger companies like UltraTech Cement and other regional firms.
Further, the realizations declined by 2% YoY on the back of pricing pressure from the northern market. The operating profits grew by 11% YoY on the back of lower raw material and power & fuel costs.
However, net profits declined by 68% YoY to Rs 1 billion on account of tax credit of Rs 1.8 billion in the same period last year. Factors such as government's focus on infrastructure development and housing projects will add major boost to cement companies.
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