Volatility plagues Indian bourses

Mon, 25 Apr Closing

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Indian stock markets had a volatile outing today as they oscillated to either side of yesterday's close. Whatever attempts were made to notch gains were thwarted by profit booking at higher levels. Selling activity took toll in the final hour as the indices closed below the dotted line. While the BSE-Sensex closed lower by around 18 points (down 0.1%), the NSE-Nifty closed lower by around 10 points (down 0.2%). The BSE Midcap and BSE Small cap bucked the trend as they closed higher by 0.1% and 0.2% respectively. Gains were seen in consumer durables and IT stocks, while oil & gas and banking stocks were at the receiving end.

As regards global markets, Asian indices closed mixed today while European indices have also opened on a mixed note. The rupee was trading at Rs 44.49 to the dollar at the time of writing.

Auto stocks closed mixed today. While the key gainers were Maruti and M&M, Hero Honda and Ashok Leyland were at the receiving end. Maruti announced its results for the quarter and year ended March 2011 a short while ago. The company reported a 19% YoY and 25% YoY growth in sales for 4QFY11 and FY11 respectively led by growth across all product segments. For the full year, while sales from the A2 segment stood at 28% YoY, the A3 and C segment saw sales growing by 32% YoY and 59% YoY respectively. Operating margins, however, fell by 3.4% to 7.2% in FY11. The company was impacted largely by a rise in input costs and expenses incurred on new model launches. Adverse currency movement particularly on exports also impacted profits. All this percolated down to the bottomline which fell by 8% YoY. For the quarter growth in net profits was flat.

Nestle India declared its 1QCY11 results. Topline for the quarter grew by 22.1% YoY on the back of higher volumes and higher price realization. While domestic sales grew by 23.1% YoY, exports grew by 10.2% YoY. Operating (EBITDA) margins remained flat at 21.1% (as a percentage of sales). Lower cost of raw material was more than offset by higher other expenditure (both as a percentage of sales). Cost of raw material was lower as a result of improved product/channel mix and reduction in free goods promotion, partially offset by increase in commodity cost. Other expenditure was higher due to special charges for the redesign of existing factory layout to increase production. Net profit of the company grew by 26.7% YoY on the back of higher operating income, increase in other income, fall in interest and lower effective tax rate. The stock closed higher today.