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Indices Flat Ahead of Monetary Policy
Tue, 9 Aug 09:30 am

Major Asian stock markets have opened the day on a positive note. The stock markets in Japan and China are trading higher by 0.3% each. Benchmark indices in Europe ended their previous session on a positive note with stock markets in Germany ending the day higher by 0.6%. The rupee is trading at 66.85 per US$.

Indian stock markets have opened the day on a flattish note. The BSE Sensex is trading marginally lower by 24 points (down 0.1%) and the NSE Nifty is trading marginally higher by 1 point (up 0.01%). While BSE Mid Cap and BSE Small Cap are trading marginally lower by 0.05% and 0.01% respectively.

Major sectoral indices have opened the day in red with stocks from fast moving consumer goods (FMCG) and information technology sector are witnessing maximum selling pressure.

Hero MotoCorp reported its results for the quarter ended June 2016. The net profits of the company grew by 18.3% YoY to Rs 8.8 billion during the quarter. Further, sales grew by 7.7% YoY to Rs 80.1 billion during the quarter.

The company stated that the sales grew on the back of demand recovery in the rural area. Reportedly, rural sales grew by 7% YoY during the quarter. The company stated that the rural consumption pattern is recovering on the back of a good monsoon. To add to this, implementation of the seventh pay commission too is expected to boost the demand for the company's two-wheelers in the urban areas.

The company's operating margins too increased by 1.54% to 16.63% on the back of a good product mix with higher growth in scooter sales as compared to the motorcycles.

The statement given by the company with regards to rural recovery is quite contradictory to what Maruti Suzuki India stated after its results. Maruti Suzuki stated that the sentiment in rural India had not recovered. Hence, a sustainable revival in rural demand will be the key things to watch out for going forward.

Colgate-Palmolive Ltd too reported its results for the quarter ended June 2016. The net profits grew by 8.4% YoY during the quarter. The company surprised the street on the volume growth front, which had remained subdued since a while now. The company's volumes grew by 6% YoY during the quarter.

Further, in order to tackle the competition the company has strengthened its portfolio in the natural segment with two new launches- Colgate Sensitive Clove and Colgate Cibaca Vedshakti. The company has also marginally recovered its lost market share by 0.6% which now stands at 55.9%.

However, the growth in the volumes has come on the back of increased advertisement and promotion costs. The company has contracted some big celebrities to help achieve to do. Owing to higher promotional expenses, the operating margins declined by 1% YoY to 20.9% during the quarter.

Competition from Patanjali and other players like Himalaya coupled with the traction for new products will be the key things to watch out for the company going forward. The stock is trading down by 3%.

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Apr 26, 2017 11:15 AM

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