Volatility mars Indian indices

Tue, 4 Feb Closing

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Indian equity markets had a rather volatile trading session today. While the larger part of the trading session saw the indices languishing in the red, buying activity intensified in the later hours pushing the indices above the dotted line. While the BSE Sensex today closed higher by 3 points, the NSE-Nifty closed flat. The BSE Mid Cap and the BSE Small Cap did well and closed higher by 0.4% and 0.3% respectively. Gains were largely seen in FMCG and banking stocks, while those from the IT, healthcare and metals sectors were at the receiving end.

As regards global markets, Asian indices closed weak today while European indices have also opened in the red. The rupee was trading at Rs 62.50 to the dollar at the time of writing.

Auto Ancillaries stocks closed mixed today. While Amara Raja Batteries and Bosch Ltd found favour, Bharat Forge and Exide Industries closed in the red. Bharat Forge announced results for the third quarter and nine months ended December 2013. Topline for the quarter grew by a healthy 24% YoY largely led by exports which were up 54.5% YoY. As far as exports are concerned, there was robust growth across all geographies with the Americas, Europe and Asia Pacific posting growth rates of 26% YoY, 90% YoY and 102% YoY respectively. Revenues from the domestic market fell by 6% YoY. This was largely on account of various headwinds that continued to plague the domestic auto industry during the quarter. Operating margins improved substantially by 4.6% to 25.8% in 3QFY14 leading to the impressive 51% YoY growth in operating profits. Net profits almost doubled led by the healthy performance at both the topline and operating profit level.

Lupin also announced results for the third quarter and nine months ended December 2013. The company's revenues grew by 21% YoY during the quarter. Total formulations sales grew by 20% YoY led by the US, Rest of the World (ROW), South Africa and India. As far as the US is concerned, the branded business stood at 11% of sales, while the generics business accounted for the balance. Lupin launched 5 products in the US during the quarter and now has 62 products in the market. Growth in Japan was tepid at 2% YoY. Revenues from the API business grew by 26% YoY. Operating margins improved by 1.4% due to lower raw material and other expenditure (as percentage of sales) as a result of which operating profits grew by 28% YoY. However, net profits grew by a robust 42% YoY led by higher other income, and reduction in depreciation charges as well as interest costs. The stock closed lower today.