Profit booking takes toll

Thu, 21 Jul Closing

   Previous Close   

   Pre-Open   

   09:30 am   

   11:30 am   

   01:30 pm   

Indian stock markets had a largely volatile session today especially in the morning session as the indices barely managed to keep head above water. However, post noon selling pressure took toll and the indices languished in the red since then. There was no respite in the final trading hour either and the indices closed well below the dotted line. While the BSE-Sensex closed lower by around 66 points (down 0.4%), the NSE-Nifty closed lower by around 25 points (down 0.5%). The BSE Midcap and BSE Small cap were not spared either as they closed lower by 0.4% each. Losses were largely seen in consumer durables, banking and oil & gas stocks.

As regards global markets, Asian indices closed mixed today while European indices have opened in the red. The rupee was trading at Rs 44.48 to the dollar at the time of writing.

Pharma stocks closed mixed today. While Sun Pharma and Dishman Pharma found favour, Lupin and Biocon closed in the red. Biocon declared its results for the quarter ended June 2011 today. The company's total income grew by 11% YoY. This was led by its biopharmaceuticals business (up 8%) and Syngene (up 21% YoY). As far as the biopharma business is concerned, growth was led by the domestic branded formulations business which was up 28% YoY. Growth was also fuelled by insulin and statins. 'Atorvastatin' and 'Fluvastatin' were the two drugs that especially helped the statins business to maintain its momentum. Growth in contract research was largely attributed to the robust growth displayed by Syngene. This was due to a number of drivers notably expansion by existing clients, addition of new clients and evolution of the business mix towards higher value services. While operating profits grew by 12% YoY with margins of 29%, net profit growth was relatively lower at 7% YoY.

Exide Industries also announced results for the first quarter ended June 2011. Results were largely disappointing as sales grew by a mere 8% YoY and were attributed to sluggish demand. The latter was on account of the dual impact of labour problem at Maruti's Manesar plant and steady increase interest cost on auto loans. Operating margins dropped from 22.8% in 1QFY11 to 17.9% in 1QFY12. This was largely due to the surge in raw material costs (as percentage of sales) as lead prices continued to remain firm. Raw material costs increased by 4% to 63.5% of sales in 1QFY12. Other expenditure (as a percentage of sales) also rose leading to the 15% YoY decline in operating profits. However, the drop in net profits at 1% YoY was not as steep on account of a substantially higher other income and lower tax expenses. The stock closed lower by around 9% today.