The major Asian stock markets have opened the day on a mixed note with stock markets in Indonesia (down 2.0%) and Korea (down 0.2%) leading the losses. However, the stock markets in China (up 1.9%) and Hong Kong (up 1.3%) have opened in the green. Positive corporate earnings news has supported the gains in US and European stock markets. The rupee opened trading with a marginal loss at Rs 63.34 to the dollar.
Stocks in the software sector have opened mainly in the red with HCL Infosys Ltd and Tech Mahindra Ltd leading the losses. The leading software firm Infosys Ltd has announced results for the quarter and year ended March 2015. The company has reported a 4.7% quarter on quarter (QoQ) fall in the net profit. In rupee terms the consolidated sales decreased by 2.8% QoQ during 4QFY15. In US dollar terms the revenues were down 2.6% QoQ. The appreciation of the US Dollar against major global currencies impacted the topline. Operating profits were down by 6.5% QoQ. Thus, the operating margin which came in at 25.7% this quarter was lower than the same reported in the last quarter of 26.7%. The other income was higher by 4.9% QoQ. Despite the sequential rise in other income, the poor operating performance led to the fall in the profit before tax (PBT) by 4.4% QoQ. The company has announced a bonus issue of 1:1 and a final dividend of Rs 29.5 per share (equivalent to Rs 14.75 post the 1:1 bonus issue). Further, the company has announced two acquisitions: Kallidus Inc. (d.b.a Skava) which specializes in retail mobile commerce for a consideration of US$ 120 m and an early stage minority investment in Airviz for a consideration of US$ 2 m.
Engineering stocks have opened mixed with Siemens Ltd and TRF Ltd leading the gains. However, BEML Ltd and AIA Engineering have opened on a weak note. As per a leading financial daily, Avantha Group will sell its entire 34.37% stake in demerged consumer products business of Crompton Greaves to private equity investors Advent International and Temasek for Rs 20 bn. The two PE firms will then make an open offer for additional shares to gain ownership of the consumer unit of the Avantha group -- Crompton Greaves Consumer Electricals (CGCEL) - which will be listed on the National Stock Exchange and Bombay Stock Exchange. As per the deal, Cromptom Greaves' the consumer products arm, Crompton Greaves Consumer Electricals (CGCEL) is valued at Rs 66 bn. In February this year, the company's board had approved fully demerger of its consumer products business and said shareholding of CGCEL upon completion of the demerger will mirror the shareholding of Crompton Greaves. Temasek will be an independent co-investor alongside Advent in CGCEL.