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Pharma stocks outperform
Mon, 16 Dec 11:30 am

After opening flat, the Indian Indices are trading directionless in the morning session amid outperformance among pharma and Engineering stocks. The selling pressure is the highest in Energy and Metal stocks.

The BSE-Sensex is trading up 7 points and the NSE-Nifty is trading up 2 points. The BSE Mid Cap index is trading up 0.4% and the BSE Small Cap index is trading up 0.3%. The Rupee is trading at 62.11 to the US Dollar.

Most Software stocks are trading higher today. Persistent Systems and eClerx Services are among the stocks leading the gainers. India's largest software firm, Tata Consultancy Services (TCS), has won a large Business Process Outsourcing (BPO) contract. The contract was awarded to TCS by the British energy producer Npower. Npower is a subsidiary of the German energy giant RWE. As per the contract, TCS will take over all non-phone based back office and customer care operations of Npower. TCS will focus on delivering more efficient, flexible and improved customer service to Npower's customers in the U.K as well as enabling the company to reduce costs. Npower would cut its 11000 strong workforce by about 1450 but will not outsource the phone based work, done by its U.K call centers. Revenues from BPO as well as revenues from the U.K are about 12% of total revenues for TCS. TCS is trading up 0.7% today.

Engineering stocks are trading mixed today. AIA Engineering and Blue Star are leading the gainers. Jain Irrigation and Everest Kanto Cylinder are leading the losers. L&T's subsidiary - L&T Valves is eyeing Rs 20 bn in revenues mainly driven by exports by FY16. Currently, the company expects to end this fiscal with Rs 12 bn of which 55% will come from exports. The company wants to increase the export contribution to more than 60% of the total revenues. Currently, the subsidiary contributes roughly 2% to the total revenues. Going forward, it is expected to increase its share in total consolidated sales of L&T as there is a rise in the demand from West Asia, Japan, Korea and other markets. The shale gas business in the US is also emerging as a potential market for the company. The company is planning to expand both its facilities at Coimbatore and Kancheepuram plants. The strategy of eyeing exports market and capacity expansion is in line with L&T's group strategy of tapping export markets and increase contribution of exports to combat the domestic slowdown. L&T is trading up 1.1% today.

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