Indices sink deeper into the red

Thu, 21 Jan 01:30 pm

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The Indian stock markets almost doubled their losses, sliding deeper into the negative territory during the previous two hours of trade. Sentiment continues to remain weak across sectors on account of persistent selling in capital goods, banking, power, consumer durables, healthcare and stocks. Only stocks from the FMCG space are still in the positive.

The BSE Sensex and NSE Nifty are trading in the red, down by 200 points and 60 points respectively. Midcap and small cap stocks are also trading in the negative, down by 1.2% and 1% respectively. The rupee is trading at 45.94 to the dollar.

Two wheeler major TVS Motors announced its December 2009 quarter results yesterday. The company's topline grew by 25% during the quarter led by 26% growth in volume sales, both on a YoY basis. The company's operating profits grew by an impressive 43% as margins expanded by 1%. Lower interest and benign depreciation charges further helped the company post a strong profit during the quarter as opposed to a small loss during same quarter last year. Its bottomline for the nine month period grew more than fourfold on the back of a mere 14% growth in topline.

No favorable shift was witnessed in product mix. Motorcycles, a high value product for the company grew by 18% YoY in the domestic markets. While the growth is impressive, it has come in way below industry growth rate of 40%, indicating loss of market share. Growth in scooters however came in much higher at 42% YoY, beating the industry growth rate of 17% and buoyed by success of new launches. The surprise package though was the mopeds segment, which managed a growth of 49% YoY and contributed the most to overall growth. TVS is currently trading lower on the bourses. Infact the entire auto sector is witnessing selling pressure currently with the exception of M&M which is seeing gains.

Pharma major Biocon announced its results a while back. Its revenues for 3QFY10 grew by a robust 46% YoY, led by the strong performance of both its biopharmaceuticals and contract research businesses. EBDITA margins fell by 3.8% during the quarter on the back of a rise in raw material costs and other expenses (as percentage of sales). While the company's bottomline grew at a stupendous pace during the quarter, the same was largely due to the forex loss incurred in 3QFY09, which is not present this quarter. On excluding the same, growth in bottomline stands at 15% YoY, much lower than its impressive topline growth on account of the company's fall in operating margins. Biocon is currently trading lower.