Energy stocks boost the markets

Wed, 27 Apr 09:30 am

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Asian stock markets have opened the day on a positive note. Benchmark indices in Japan (up 1.3%), Taiwan (up 1.1%) and Singapore (up 0.5%) are leading the pack of gainers. The Indian stock markets have opened the day on a positive note as well. Stocks in the energy and consumer durables space are leading the gains.

The BSE-Sensex is trading higher by around 54 points (0.3%), while the NSE-Nifty is up by around 13 points (0.2%). Midcap and small cap stocks are trading in the positive as well, with the BSE Midcap and BSE Small cap indices up by about 0.4% each. The rupee is trading at 44.46 to the US dollar.

Pharma stocks have opened the day on a good note. Biocon Ltd., Divi's Pharma and Cadila Healthcare are leading the gains. However, stocks of Jubilant Life and IPCA Labs are witnessing selling pressure. Aventis Pharma has announced its 1st quarter 2011 (1QCY11) results (the company has a December year ending). The company reported an 11% YoY growth in net sales. This was on the back of the growth in its core pharmaceutical business. The company's export sales remained stable as well. Due to the savings in raw material and staff costs (as a percentage of sales), the company witnessed an increase in its operating margins. Operating margins improved to 21.6% during the quarter as against 19.9% reported during the same period last year. The better operational performance translated to a higher growth in net income. Net income increased by 40% YoY. This was due to better operating margins as well as higher other income. The stock of Aventis Pharma has opened the day in the green.

Cement stocks have opened the day on a positive note as well with Birla Corp, Prism Cement and Heidelberg Cement leading the gainers' pack. However, stocks of ACC Ltd and Chettinad Cement are trading in the red. ACC has announced its 1st quarter 2011 (1QCY11) results (the company has a December year ending). The company has reported 14.1% YoY increase in sales mainly on the back of higher volumes. While sales volume increased by 10.4% YoY, cement realizations improved marginally by 3.4% YoY. However, operating profits dropped by 10.9% YoY on the back of steep rise in input costs. The cost of manufacturing escalated due to rising cost of energy, fuel and raw materials like fly ash and slag. Depreciation and interest expenses were higher due to the ongoing capacity expansion and commission of various projects. As a result, net profits declined by 13.4%.The net profit margin declined from 19.3% in 1QCY10 to 14.6% in 1QCY11.