Indian share markets open weak

Wed, 5 Feb 09:30 am

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Barring Taiwan (down 2.6%), most major Asian stock markets have opened the day on a firm note with Indonesia (up 0.5%) and Malaysia (up 0.4%) leading the gains. The Indian share markets have opened the day on a negative note. The sectoral indices are trading mixed with FMCG and energy stocks trading weak, while realty stocks are trading firm.

The Sensex today is down by around 101 points (0.5%), while the NSE-Nifty is down by around 23 point (0.4%). The midcap and smallcap stocks have opened in the green with the BSE Mid Cap and BSE Small Cap indices trading higher by 0.2% and 0.5% respectively. The rupee is currently trading at Rs 62.68 to the US dollar.

Software stocks have opened the day on a firm note with Tech Mahindra and Mphasis Ltd leading the gains. Tech Mahindra has announced the results for the third quarter and nine month period of the financial year 2013-2014 (3QFY14). During the quarter, the company's consolidated net sales stood at Rs 48,985 m, higher by 2.7% on a quarter-on-quarter (QoQ) basis. Operating profits increased by 2.3% QoQ to Rs 11,363 m as operating profit margins contracted marginally from 23.3% in 2QFY14 to 23.2% in 3QFY14. As against other of Rs 381 m in 2QFY14, the company reported other expenses of Rs 457 m in 3QFY14. While depreciation charges increased by 14.2% QoQ to Rs 1,396 m, interest expenses declined by 2.3% QoQ to Rs 236 m. The company wrote back Rs 1200 m in provisions of previous years relating to the Satyam acquisition. This boosted the company's net profits to Rs 10,099 m, higher by 40.6% QoQ. Net profit margins expanded from 15.1% in 2QFY14 to 20.6% in 3QFY14. During the nine month period, the company's sales and net profits increased by 177.4% YoY and 165.2% YoY respectively.

FMCG stocks have opened the day on a mixed note with Godrej Consumer Products Ltd (GCPL) and Lakshmi Energy Ltd leading the gains. However, Marico Ltd and Hindustan Unilever Ltd (HUL) are trading in the red. As per a leading financial daily, FMCG player Godrej Consumer Products Ltd has announced that it is set to acquire the remaining 49% stake in African hair care company Darling Group. As per a filing with the BSE, the company has said that it has inked an agreement with the Darling Group for increasing its stake in phases. Once the acquisition is complete, GCPL will gain complete control of the Nigeria business. It must be noted that in September 2011 the company had completed the acquisition of 51% stake in Darling Group Holdings for Rs 5 bn. The deal structure allowed GCPL the chance to acquire 100% in the company after 5 years at a predetermined valuation.