Volatility plagues Indian indices

Mon, 5 Nov Closing

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Indian equity markets began the day's proceedings on a cautious note and barely managed to stay afloat in the morning session. Selling pressure across index heavyweights intensified post noon thereby pushing the indices into the red. The final trading hours saw buying gain momentum as a result of which the indices closed barely into the positive. While the Sensex today closed higher by 7 points, the NSE-Nifty today closed higher by 6.5 points. The BSE Mid Cap and the BSE Small Cap, however, closed marginally lower. Gains were largely seen in FMCG and healthcare stocks, while auto and metal stocks were at the receiving end.

As regards global markets, most Asian indices closed in the red today while European indices have also opened weak. The rupee was trading at Rs 54.61 to the dollar at the time of writing.

Most FMCG stocks closed firm today with the key gainers being Marico, Colgate and Dabur. Marico announced results for the second quarter ended September 2012. Riding on a strong volume growth of 14%, Marico reported a 19% rise in revenues. The organic volume growth excluding the turnover of acquired Youth brands (Set Wet, Zatak and Livon) was 9%. These brands reported a top line growth of 28% during the quarter. The domestic consumer business, forming 69% of overall revenues, grew by 19% led by 17% rise in offtake. All the three main product categories namely Parachute coconut oil, value added hair oils and Saffola refined edible oil clocked double-digit growth. The International Business grew by 16% aided by robust growth in Vietnam and MENA. The Kaya business segment grew by 38% led by same store growth of 10% in India and Middle East. On the back of controlled raw material costs, the company was able to overcome the steep rise in ad spends and clock a 70 basis points expansion in operating margin. The steep jump in the company's operating profit did not percolate at the net level due to rise of over 40% in interest and tax charges.

Power Grid Corporation also announced results for the second quarter ended September 2012. Net sales grew by 34% YoY in 1HFY13 on the back of 35% YoY growth in transmission income. Revenues from transmission business continue to comprise more than 95% of the company's turnover as the consultancy business saw a drop in contribution. However, the company has over 40 consultancy projects in hand valued at over Rs 155 bn. Hence the consultancy business pipeline is expected to recover. Operating margins improved to 85.9% in 1HFY13 from 82.6% in first half of FY12. Despite almost 25% fall in other income, net profits grew by 41% in 1QFY13. The cumulative transmission network stood at 95,846 ckms at the end of August 2012 as against 93,000 ckms at end of March 2012. The company is targeting to achieve 1 lakh ckms by March 2013. The stock closed lower today.