Markets Slip into the Negative

Fri, 6 Nov 01:30 pm

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Indian indices slipped into negative territory in the post noon trading session. Sectoral indices are trading on a mixed note with stocks from the pharma and auto sector leading the losses.

The BSE-Sensex is trading down by 42 points (down 0.1%) and the NSE-Nifty is trading down by 10 points (down 0.1%). The BSE Mid Cap index and the BSE Small Cap index are also trading in the red, both down by 0.5%. Gold prices, per 10 grams, are trading at Rs 25,844 levels. Silver price, per kilogram, is trading at Rs 35,440 levels. Crude oil is trading at Rs 3,005 per barrel. The rupee is trading at 65.78 to the US$.

Most of the stocks in the pharma space are trading on a negative note with IPCA Labs and Cadila Healthcare bearing the maximum brunt. India's third largest drug maker Cipla has reported its results for the second quarter ended September 30, 2015.

The company has posted a 44% rise in its net profit during the quarter on a YoY basis. Total income increased by 24% YoY at Rs 34 billion for the quarter under review.

The surge in net profit was aided by strong sales in international markets. The company earns about 8% of its revenue from the US market and has been strengthening its presence through the inorganic growth route. Exports of formulations grew 51.3% YoY while exports of active pharmaceutical ingredients (APIs) rose 61% YoY during the quarter.

Most of the performance was weighed down by the Indian operations. Sales in India, the company's largest market, grew only 1% during the quarter.

The company, after its results were reported, said its sales for the rest of the year would be lower than that in the first half. It further added that it will spend heavily on research and development in consumer healthcare and biologics for the rest of the year.

Cipla was among the earliest companies in India to start exporting cheap generics. However, like its peers, it has more recently been developing high-value, complex products, as the market for simple generics becomes more and more crowded. Presently the stock of Cipla is trading down by 0.1%.

Second largest player in the Indian lubricant industry Castrol India has reported results for its third quarter ended September 30, 2015.

The company has reported 21% rise in its net profit at Rs 1,432 million during the quarter on a YoY basis. However, the company's total income has decreased by 2% YoY to Rs 7,843 million for the quarter under review.

With regards to the industrial part of its business, the company stated that business is witnessing some improvement as a result of new customer wins, especially in the wind and steel segments.

For the future outlook, the company said that volatility in the cost of goods due to volatile rupee exchange rate is likely to be experienced.

Castrol India is the market leader in the retail automotive lubricant segment. It manufactures and markets a range of automotive and industrial lubricants. Presently its scrip is trading down by 2.2%.