Profit booking takes toll

Wed, 22 May Closing

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   Pre-Open   

   09:30 am   

   11:30 am   

   01:30 pm   

Indian equity markets began the day's proceedings on a cautious note and although the morning session saw them trade firm, alternate bouts of buying and selling largely restricted them within a range. Selling activity, however, intensified in the afternoon session pushing the indices into the red as investors chose to book profits at higher levels. While the BSE-Sensex today closed lower by 49 points, the NSE-Nifty closed lower by 20 points. Both the BSE Mid Cap index and the BSE Small Cap were not spared either and lost 1% each. Barring healthcare and FMCG stocks, losses were seen across sectors.

As regards global markets, Asian indices closed mixed today while European indices have opened in the red. The rupee was trading at Rs 55.41 to the dollar at the time of writing.

Most engineering stocks closed in the red today with the key losers being Larsen & Toubro (L&T), Voltas and ABB. L&T has announced results for the fourth quarter and year ended March 2013. On a standalone basis, L&T's revenues for the quarter grew by 10% YoY. However, net profits fell by 7% YoY on account of increase in cost heads such as raw materials, staff and sub-contracting charges. For the full year, while sales grew by 14% YoY, net profits were up 10% YoY. L&T's order book during the fourth quarter saw inflows of Rs 279 bn, a growth of 32% YoY. For the full year, the company secured orders worth Rs 880 bn, an increase of 25% YoY. The growth in the order book during the year can be attributed to the international markets due to high number of order wins from the hydrocarbon space. It must be noted that during the year, despite execution issues prevailing in the sector, the overall diversity in the company's order book ensured that these issues did not impact the topline growth much.

Coal India also announced results for the fourth quarter and full year ended March 2013. The company's net sales declined by 21.1% YoY during 4QFY13. This was due to the 26.7% decline in production volume and 25% decline in offtake volume. The company reported an operating loss in 4QFY13 as compared to an operating profit in 4QFY12. Other income increased by 71.2% YoY. This is due to higher dividend received from subsidiary companies. Net profit for the quarter ended March ended 2013, increased by 89.7%. For the full year ended March 2013, standalone net sales declined by 15.3% YoY while standalone net profit increase by 21.4% YoY. The increase in the net profit can be contributed to increase in dividend paid by the subsidiary companies and interest income. The stock closed 1% higher today.