Maruti Suzuki Q2FY20 Numbers, Fitch on India's GDP Growth, and Top Stocks in Focus Today

Fri, 25 Oct Pre-Open

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On Thursday, Indian share markets traded on a volatile note throughout the day and ended flat.

The BSE Sensex closed lower by 38 points to end the day at 39,020. Yes Bank and SBI were among the top losers.

While the broader NSE Nifty ended down by 22 points to end at 11,582.

Among BSE sectoral indices, banking stocks fell the most, followed by power stocks and telecom stocks.

Speaking of Indian stock markets, amid the volatility witnessed in stock markets lately, Tanushree Banerjee, in the video below, talks about the Rebirth of India phenomenon and how 3 specific trends are racing ahead even in these gloomy times.

Tune in to find out more...

Top Stocks in Focus Today

In news from the IT sector, Infosys share price will be in focus today as the US Securities and Exchange Commission (SEC) has started an investigation on the whistleblower complaints against Infosys claiming malfeasance in accounting.

In a filing to exchanges, Infosys said that the company is in touch with the SEC and would cooperate with the investigation.

On Wednesday, the Indian markets regulator had also requested additional information from the company concerning the anonymous complaints. Infosys said it is also aware of a class action lawsuit and "intends to defend itself vigorously in such a lawsuit."

From the pharma sector, Alembic Pharma share price will also be in focus today as the company's joint venture (JV) Aleor Dermaceuticals has received approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) Desonide Ointment, 0.05%.

The approved ANDA is therapeutically equivalent to the reference listed drug product (RLD), Desonide Ointment, 0.05%, of Perrigo New York, Inc.

Desonide Ointment is a low potency corticosteroid indicated for the relief of the inflammatory and pruritic manifestations of corticosteroid responsive dermatoses.

Meanwhile, market participants will also be tracking Aurobindo Pharma share price as the company has received final approval from the USFDA to manufacture Guaifenesin extended-release tablets, 600 mg and 1200 mg (OTC).

The company's Guaifenesin extended-release tablets are the AB rated generic equivalent of RB Health (US) LLC's Mucinex tablets.

This is the 10th ANDA approved out of Unit X formulation facility in Naidupet, Andhra Pradesh, used for manufacturing oral products. The company now has a total of 419 ANDA approvals (392 Final approvals including 21 from Aurolife Pharma LLC and 27 tentative approvals) from USFDA.

Maruti Suzuki Posts 39% YoY Fall in Q2 Profit

Maruti Suzuki posted 39.3% year-on-year (YoY) decline in net profit at Rs 13.5 billion for the quarter ended September 2019.

Net sales of the company dropped 22.5% YoY to Rs 161.2 billion in Q2FY20. Sales volume fell 30.2% YoY to 3,38,317 units during the quarter under review.

The carmaker recorded its worst YoY decline in sales in the small car segment in the quarter ended September. During the period, it reported a 62% YoY decline in wholesales in the mini car category, which comprises the most affordable Alto.

Operating EBIT plunged 74.9% YoY to Rs 6.8 billion.

The company's net profit margin, however, rose to 8.4% during the July-September quarter from 7.7% in the previous quarter due to higher fair value gains on invested surplus, cost reduction efforts, and lower advertisement expenses.

The company said that the automobile industry has seen a significant decline in sales this year owing to several factors.

It added that one of the main factors is increase in the cost of acquisition of the car due to various reasons coming together like implementation of more stringent safety and emission (BS6) norms, increase in vehicle insurance expenses and hike in road taxes in many states. Along with this, the lower availability of finance and increased down payment requirement have affected the affordability of customers to own cars.

Fitch Ratings Slashes GDP Growth Forecast

In the news from the macroeconomic space, Fitch Ratings slashed India's GDP growth forecast in the current fiscal to 5.5% saying a large credit squeeze emanating from shadow banks has pushed economic growth to a six year low.

The ratings agency said the recent government measures to boost economy including a cut in corporate tax rates will gradually nudge growth.

The projection is lower than 6.1% that the Reserve Bank of India (RBI) had forecast in early October. GDP expansion will pick up to 6.2% in the next financial year (2020-21) and to 6.7% in the year after, Fitch said. The Indian economy decelerated for the fifth consecutive quarter in April-June, with GDP expanding by a meagre 5%, down from 8% recorded a year earlier.

This is the lowest growth outturn since 2013.

Note that earlier this month, Moody's Investors Service slashed its 2019-20 GDP growth forecast for India to 5.8% from 6.2% earlier, saying the economy was experiencing a pronounced slowdown which is partly related to long-lasting factors.

Moody's had attributed the deceleration to an investment-led slowdown that has broadened into consumption, driven by financial stress among rural households and weak job creation and said the growth will pick up to 6.6% in 2020-21 and to around 7% over the medium term.

On October 15, the International Monetary Fund (IMF) slashed India's GDP growth rate projections to 6.1% from the 7% in July, while World Bank had its estimate for India's GDP growth for 2019-20 to 6%.

It would be interesting to see how these projections pan out. Meanwhile, we will keep you updated on all the developments from this space.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

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