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Positive Start to the Day
Tue, 31 May 09:30 am

Major Asian stock markets have opened the day on a positive note. Stock markets in China and Singapore are trading higher by 2.4% and 1% respectively. Benchmark indices in the Europe and the US ended their previous session in green. The rupee is trading at 67.33 per US$.

Indian stock markets have opened the day on a firm note. The BSE Sensex is trading higher by 98 points (up 0.4%) and the NSE Nifty is trading higher by 18 points (up 0.2%). Both, BSE Mid Cap and BSE Small Cap are trading higher by 0.3% and 0.2% each.

Major sectoral indices have opened the day on a mixed note with stocks from automobile sector witnessing buying interest. However, stocks from pharmaceutical and telecommunication sector is witnessing selling pressure.

Tata Motor's reported its results for the quarter ended March 2016. The consolidated revenues grew by 18.8% YoY to Rs 799.2 billion during the quarter. The healthy growth was on the back of the strong performance of its Jaguar Land Rover (JLR) unit.

The sales volumes of JLR grew by 28% YoY to 158,213 units during the quarter. The traction for JLR was across geographies and the volumes grew by 28% in the UK, 23% in North America, 19% in China and 54% in Europe as a whole during the quarter. Reportedly, net profit at JLR rose 56.29% YoY to €472 million, while net sales increased 13.18% to €6,594 million during the quarter.

Moreover, the Indian operations too reported a profit of Rs 4.6 billion as compared to a net loss of Rs 11.6 billion a year ago. The Indian operations improved on the back of strong performance from the medium and heavy duty trucks.

The consolidated net profits of the company grew by 201% to Rs 51.7 billion during the quarter. However, the profits included a one-time gain of Rs 5.5 billion on account of an insurance claim.

The profitability margins may come under pressure going forward on the account of growing contribution of cheaper models. Reportedly, JLR is moving from being a premium, high-margin company to a high-volume, low-margin firm.

Going forward, the traction from the newly launched model in passenger vehicle space such as 'Tiago' and a pick -up in the economic activity to boost the demand for commercial vehicles will be the key thing to watch out for pertaining to Indian operations. As far as the JLR unit is concerned, the demand from key geographies such as China and Europe will need to be closely tracked to assess its impact on its financial performance going forward. The stock is trading up by 9.2%.

NTPC too reported its results for the quarter ended March 2016. The standalone total income declined by 6.6% YoY to Rs 185.6 billion during the quarter. Further, the company's net sales from electricity too declined by 6.4% YoY to Rs 179.9 billion during the quarter.

The sales from electricity declined on the back of low demand from the state electricity board (SEB). Partially the fall in the revenues was also on account of lower fuel cost which declined by 19% YoY during the quarter. Fuel cost is a pass-through for NTPC's regulated business model. As the benefit was passed on to the customers, average tariff fell, resulting in a 6% drop in revenue.

Further, the company's plant load factor or utilization levels dropped marginally to 62.28% in fiscal year 2016 as compared to 64.25% in the year ago period.

The standalone net profits too declined by 8% YoY to Rs 27.1 billion during the quarter. Increase in the generation and utilisation levels will be the key things to watch out for going forward. The stock is trading up by 1.2%.

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Jul 27, 2017 12:12 PM

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