Auto stocks are trading strong led by Mahindra & Mahindra (M&M) and Maharashtra Scooters. As per a leading daily, sales of automobile companies remain to be sluggish in the new financial year too. Maruti Suzuki's sales excluding exports grew marginally. However, taking exports into account the sales were down by 3% YoY in April. M&M too reported just 2% YoY growth in sales in the last month. We may note here that even companies like Tata Motors, Toyota Kirloskar, Ford and Hyundai are not able to find buyers for their vehicles. Slowdown in overall economic environment, high inflation, rise in fuel price and expensive loans have impacted the sales of passenger cars in last few months. Passenger car sales fell 7% in FY13, growth being lowest in last decade. Further, it maye be noted that Society of Indian Automobile Manufacturers expects a growth of only 3-5% in FY14 as well .
Telecom stocks are trading strong led by Reliance Communications and Idea Cellular. Telecom major Bharti Airtel declared results for the quarter ended March 31, 2013. The company has reported 9.2% YoY growth in consolidated sales and 49.4% YoY decline in the net profits during the quarter. The mobile subscriber base in India grew by 4% YoY during the quarter and the total subscriber base including Asian and African operations grew by 8% YoY during the quarter. Operating expenditure was up by 11.7% YoY during the quarter resulting in operating profits rising by only 4.1% YoY. Operating profit margins shrank by 1.6% from 33.3% in last quarter of FY12 to 31.7% in last quarter of FY13. Lower operating margins coupled with higher interest costs and depreciation resulted in net profits falling by 49.4% YoY during the quarter. Increase in tax outflow too impacted net profits adversely. The company has recommended a dividend of Rs 1 per share (dividend yield of 0.3%)