Markets hover around the dotted line

Mon, 5 Nov 01:30 pm

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The Indian equity markets continued to hover around the dotted line during the post non trading session. Barring stocks from the FMCG and healthcare spaces, selling activity is being witnessed across with auto and metal stocks leading the pack of losers.

The Sensex today is trading lower by about 45 points (down 0.3%), while the NSE-Nifty is trading lower by about 10 points (down 0.3%). Stocks from the midcap and smallcap spaces are also trading weak with the BSE Mid Cap and BSE Small Cap indices down by about 0.3% and 0.1% respectively. The rupee is trading at 54.24 to the US dollar.

FMCG stocks are currently trading firm with United Breweries, Marico and Dabur leading the pack of gainers. Godrej Consumer Products (GCPL) has announced its September 2012 quarter results. The company has reported a 35% YoY rise in consolidated sales driven by 19% YoY growth in the domestic business and 32% YoY organic growth in the international business. In the domestic market, all the three product categories registered double-digit growth with the household insecticides business growing 1.5 times ahead of the category. All the four geographical regions in the overseas market clocked robust growth during the quarter. GCPL saw its operating margin decline by 2.2% YoY to 15.6% due to a steep rise in staff costs arising from consolidation of the Darling Group as well as the Chilean operations. Even ad-spends and other expenses have risen, offsetting input cost savings from softening price of vegetable oil. At the net level, earnings grew by a relatively faster 25% YoY on the back of lower tax incidence and forex loss incurred along with 32% YoY rise in other income.

Stocks forming part of the BSE-Auto Index are currently trading weak with Bajaj Auto, Exide Industries and Bharat Forge leading the pack of losers. Bajaj Auto announced its results for the quarter ended September 2012 recently. The company reported a decline of 4% YoY during the quarter on the back of a 10% YoY decrease in volumes. Operating profits declined by 6% YoY as operating margins contracted by about 0.4% YoY to 18.4%. This was largely due to higher staff costs and other expenditure (as a percentage of sales). The company's profits increased by 2% YoY during 2QFY13. However, on excluding the extraordinary expense in 2QFY12, net profits fell by 10% YoY. As for the six month period ended September 2012, revenues were down by 0.5% YoY while profits were higher by about 2% YoY (profits not adjusted for extraordinary items).