Indian markets open in green

Wed, 21 Oct 09:30 am

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The major Asian stock markets have opened the day in green. Stock markets in Indonesia, Japan and China are trading up by 1.2%, 1% and 0.2% respectively. The major stock indices in Europe and US ended their previous session in red. The rupee is trading at 65.13 per US dollar.

Indian stock markets have opened the day on a positive note. BSE-Sensex is trading higher by 70 points (up 0.3%) and NSE-Nifty is trading higher by 18 points (up 0.2%). Both S&P BSE Midcap and S&P BSE Smallcap stocks have opened firm. Both the indices are trading higher by 0.4% and 0.3% respectively. Major sectoral indices have opened in green with stocks from FMCG information technology and pharmaceutical sector witnessing maximum buying interest.

Hero MotoCorp declared its results for the quarter ending September 2015. The company's revenue fell by 1.1% to Rs 68.4 bn on a YoY basis. The sales volume of two-wheelers fell by 7.1% on a YoY basis to 1.57 million units. The sales volumes got impacted due to poor demand. The deficit rainfall and unseasonal winter rain damaged the crops, thereby hurting farm incomes and consumer demand for the motorcycles.

However, company's EBIDTA (Earnings before Interest, Depriciation, Taxation and Amortization) expanded by 2% to 15.45% during the quarter. As per an article in Livemint, margins expanded on the back of the cost reduction programs which were introduced by the company.

The net profit of the company rose marginally by 1% to Rs 7.7 bn on a YoY basis. The demand from the rural areas will be the key thing to watch out for in the coming quarters.

Our automobile analyst and editor of Valuepro, Radhika Pandit, has discussed in-depth, about the company's future capex plans, and other initiatives taken by the company to fuel its future growth. One can read the detailed update here (subscription required).

As per an article in Business Standard, certain adverse observations have been made at Cipla's Indore plant by the US drug regulator. The adverse observations are in relation to the manufacturing practices followed at the plant.

Some of the adverse observations as stated includes, lack of authority of the quality control units to review the production records to ensure that no errors have occurred. Further, the inspection also observed that the sterile product vials were handled by ungloved and un-sanitized hand by the packaging lines employees.

While the management did not specifically comment on the US FDA observation, company stated that they are closely working with the regulatory authorities to ensure that they maintain the highest quality standards.

Reportedly, US market account for 8% of the total revenues of the company. The stock of Cipla is trading trading marginally up by 0.4%