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European Market on a Roll
Sat, 24 Oct RoundUp

Global markets closed the week on a positive note with a majority of the indices ending in the green. Stock markets in Europe and US surged upwards after the European Central Bank hinted that further rate cuts were being considered to stimulate the eurozone economy. The stock markets in Germany and France were up by 6.8% and 4.7% respectively during the week.

Indian markets ended higher by 0.9%. The Index of Industrial Production (IIP) rose to 6.4% for the month of August. Electricity generation, mining, and manufacturing output grew by 5.6%, 3.8%, and 6.9% respectively during the month.

Key world markets during the week


information technology and Fast Moving Consumer Goods (FMCG) were the top gainers. Stocks from the capital goods and metal were the biggest losers for the week.

BSE indices during the week


key economic and industry developments in the week gone by.

Movers and shakers during the week

Company16-Oct-1523-Oct-15Change52-wk High/Low
Top gainers during the week (BSE-A Group)
IFCI 25 28 11.2% 43/18
Mphasis 411 450 9.5% 475/331
Satluj Jal Vidyut 26 28 8.0% 29/22
Shree Cement 11,860 12,699 7.1% 13345/8380
ABB India 1,167 1,249 7.0% 1525/1021
Top losers during the week (BSE-A Group)
Federal Bank 65 57 -11.6% 80/56
Container Corp 1,452 1,351 -6.9% 1944/1204
Idea Cellular 150 140 -6.6% 204/137
Larsen & Toubro 1,605 1,510 -5.9% 1893/1413
Vedanta Ltd 109 102 -5.8% 264/77

Source: Equitymaster

key corporate developments of the week gone by.

Mahindra and Mahindra have launched two new products in the passenger and load category segment. The new launches are from their new product platform called Supro. Supro Van caters to the passenger van segment while Supro Maxitruck caters to the load carrier category. Supro Van is an 8 seater diesel vehicle. The vehicle is suitable for large families and caters to the tour and travel segment. The vehicle is launched at a price of Rs 4.4 lakh ex-showroom Thane. As reported by Economic Times, vehicle can be used as a personal vehicle for large families in the semi-urban, Tier II and Tier III towns. Supreme Maxitruck has a payload capacity of 1-tonne. The vehicle can be used for intra and inter city transportation of goods. The vehicle is launched a t a price of Rs 4.2 lakh ex-showroom Thane. The truck will compete with the likes of Tata Ace which enjoys a healthy market share in this segment. Reportedly, company has invested a sum of Rs 1.2 bn for the product development of its Supro brand. The company will also export these vehicles to the SAARC countries and South African markets.

Nestle's 'Maggi' noodles on Monday. The ban was imposed after the Food Safety and Standards Authority of India (FSSAI) ordered the company to withdraw the 'Maggi' noodles from the market.Nestle, thereafter had appealed in the Bombay High Court revoke this ban. Recently, the Court ruled in the favour of the company. However it asked Nestle to retest the samples of 'Maggi' at the 'National Accreditation Board for Testing and Calibration Laboratories (NABL). Recently, three laboratories certified by NABL stated that the product is safe and the lead content was much below the permissible limits. Nestle India's Maggi noodles had earlier cleared tests in various countries including the US, UK, Singapore and Australia. Post the clearance from these two governments, it is believed that other states too will lift the ban on the noodles.

Read this interesting piece, where we have discussed in detail on the topic.

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.

Now let us move on to quarterly performance reported by companies.

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.

Biocon declared its results for the quarter ended September 2015. The company's revenue grew by 11.4% to Rs 8.6 bn on a YoY basis. Reportedly, the research service unit of the company named 'Syngene International Ltd' contributed around 33% to the overall revenues of the company. The net profit grew by almost 200% to Rs 3 bn on a YoY basis. The spurt in the net profit was due to an extra-ordinary item. The extra-ordinary item was in relation to the gain of Rs 2 bn from selling of shares in its research service unit 'Syngene International'. Even after excluding the extra-ordinary item, 'Syngene International' contributed to around 50% of the overall profits of the company. The company has spent Rs 570 m on research and development in the quarter. Reportedly the company's Active Pharmaceutical Ingredients (APIs) business grew by 4% YoY to Rs 4.6 bn while its Indian branded formulation business grew by 3% YoY to Rs 1.2 bn.

Idea Cellular reported its numbers for the quarter ended September 2015. The revenues of the company grew by 14.8% to Rs 86.9 bn on a YoY basis. Growth came in from the non-voice services' segment. However, company witnessed a decline in voice usage. It stated that the voice minutes usage declined by 3.2% YoY to 189.5 billion on a sequential basis. Further, pressure was also seen on the 'mobile data' segment front. The company witnessed pressure on realizations; there was an 11.7% drop in average price realization in the data business. It is expected that the launch of Reliance Jio's services will further add to the pressure.

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