Market registers tiny losses
Amid a divergent trend for various index constituents, the Nifty 50 index ended near the flat line. The barometer index, the S&P BSE Sensex, registered small losses. The Sensex lost 33.71 points or 0.13% to settle at 25,228.50. The Nifty fell 2.05 points or 0.03% to settle at 7,733.45. The Sensex and the Nifty staged a recovery from an initial fall triggered by weakness in Asian stocks. Asian and European stocks edged lower as investors turned cautious before the release of the influential US monthly non-farm payroll data.
Stocks of public sector banks edged higher after the Lok Sabha passed the Insolvency and Bankruptcy Code, 2016 yesterday, 5 May 2016. Shares of public sector oil marketing companies (PSU OMCs) edged higher on decline in crude oil prices. Index heavyweight and cigarette major ITC trimmed losses triggered by the company's announcement of temporary closure of manufacturing of cigarettes at all its cigarette manufacturing units. Bharti Airtel rose after its subsidiary Bharti Airtel International (Netherlands) BV announced an agreement for the divestment of approximately 950 telecom towers in the Democratic Republic of Congo (DRC) to and Helios Towers Africa (HTA).
Eicher Motors rose in the wake of the company's announcement of strong financial performance for the quarter ended 31 March 2016 and management commentary of positive outlook for the motorcycle business. Hero MotoCorp dropped in volatile trade as its fourth quarter results came in line with market expectations. Bharat Heavy Electricals (Bhel) rose after the company announced that it has added another coal-based power plant to the grid by successfully commissioning a 500 megawatts (MW) thermal unit in Jharkhand.
In overseas stock markets, Asian and European stocks edged lower as investors turned cautious before the release of the influential US monthly non-farm payroll data for more clues about the interest rate outlook in the world's largest economy. Most US stocks edged lower yesterday, 5 May 2016, as investors awaited the key non-farm payrolls data. The US government will release the non-farm payroll data for April 2016 later in the global day today, 6 May 2016. The non-farm payroll data could provide more clues about the timing and quantum of future interest rate increases from the US Federal Reserve. The job data has implications for the US monetary policy. The US central bank's mandate centers on maximizing employment and keeping inflation at a 2% target level. The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 14-15 June 2016.
The Sensex lost 33.71 points or 0.13% to settle at 25,228.50, its lowest closing level since 4 May 2016. The index lost 204.28 points or 0.8% at the day's low of 25,057.93. The index lost 1.73 points at the day's high of 25,260.48.
The Nifty lost 2.05 points or 0.03% to settle at 7,733.45, its lowest closing level since 4 May 2016. The index lost 57.15 points or 0.73% at the day's low of 7,678.35. The index rose 3.40 points or 0.04% at the day's high of 7,738.90.
The BSE Mid-Cap index rose 0.37%, outperforming the Sensex. The BSE Small-Cap index lost 0.2%. The decline in this index was higher than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was negative. On BSE, 1,395 shares declined and 1,121 shares rose. A total of 189 shares were unchanged.
Total turnover on BSE amounted to Rs 1978 crore, lower than turnover of Rs 2336.37 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Healthcare index (down 0.86%), the BSE IT index (down 0.75%) and the BSE Capital Goods index (down 0.55%) underperformed the Sensex. The S&P BSE Telecom index (up 0.49%), the BSE Auto index (up 0.61%), the BSE Oil & Gas index (up 0.69%) and the BSE Power index (up 0.58%) outperformed the Sensex.
Pharma stocks dropped. Wockhardt (down 3.62%), Divi's Laboratories (down 2.3%), Dr Reddy's Laboratories (down 2.14%), Ipca Laboratories (down 2.01%), Cadila Healthcare (down 1.39%), Lupin (down 0.97%), Sun Pharmaceutical Industries (down 0.84%), Cipla (down 0.82%) and GlaxoSmithkline Pharmaceuticals (down 0.39%) edged lower. Alkem Laboratories (up 0.44%), Strides Shasun (up 0.31%) and Glenmark Pharmaceuticals (up 0.42%) edged higher.
Aurobindo Pharma was off 0.67% at Rs 799.80. The stock was volatile. The stock hit a high of Rs 807 and a low of Rs 795.15 in intraday trade. The company during market hours today, 6 May 2016, announced that it has received final approval from the US Food and Drug Administration (USFDA) to manufacture and market Fenofibrate tablets, 48 mg and 145 mg. This product is expected to be launched in the US in Q1 June 2016. The drug is bioequivalent and therapeutically equivalent to the reference listed drug product (RLD) Tricor tablets of AbbVie Inc.
Fenofibrate tablet is used to treat high level of cholesterol and triglyceride in the blood. The approved product has an estimated market size of $412 million in the US for the twelve months ended March 2016, according to IMS.
IT stocks declined. Tech Mahindra (down 1.48%), TCS (down 0.07%), HCL Technologies (down 1.21%) and Persistent Systems (down 0.62%) edged lower. Oracle Financial Services Software (up 0.89%) edged higher.
Index heavyweight and software major Infosys was off 0.92% at Rs 1,181.45. The stock hit a high of Rs 1,192 and a low of Rs 1,176.70 in intraday trade.
Wipro fell 1.92% at Rs 532.60. The company after trading hours yesterday, 5 May 2016, announced that it has won a multi-year contract from Thames Water in the United Kingdom. Wipro will develop new IT systems and processes to help Thames Water improve customer experience and drive operational efficiencies. In a separate announcement after trading hours yesterday, 5 May 2016, Wipro said that it has successfully implemented its Software as a Service (SaaS) platform- Managed File Transfer as a Service (MFTaaS) on Amazon Web Services (AWS) for organizations, thereby helping them integrate digitally with their clients, partners and employees. Wipro anticipates that the MFTaaS platform can potentially reduce up to 30% in TCO (Total Cost of Ownership) for its clients vis-a-vis traditional deployments, the company said in a statement.
Stocks of public sector banks edged higher after the Lok Sabha passed the Insolvency and Bankruptcy Code, 2016 yesterday, 5 May 2016. Corporation Bank (up 3.39%), State Bank of India (up 2.19%), IDBI Bank (up 1.88%), Bank of Baroda (up 1.21%), Union Bank of India (up 0.64%) and Bank of India (up 0.99%) rose. Punjab National Bank (down 0.92%) and Canara Bank (down 0.18%) declined. The bankruptcy bill aims to provide single unified law for timely resolution of insolvency and bankruptcy related cases in India. Once the bill becomes a law, it will help creditors recover bad debt faster. The news of the passage of the bill in the Lok Sabha hit the market after trading hours yesterday, 5 May 2016. The bill will now go to the Rajya Sabha for its passage.
Syndicate Bank rose 3.57% at Rs 68.20 after the bank said it has allotted 9.51 crore equity shares of face value of Rs 10 each for cash at an issue price of Rs 77.79 each, aggregating to Rs 740 crore on preferential basis to Government of India. The announcement was made after trading hours yesterday, 5 May 2016.
Stocks of private sector banks witnessed a mixed trend. Kotak Mahindra Bank (down 1.28%) and Yes Bank (down 0.25%) declined. Axis Bank (up 0.02%) and ICICI Bank (up 1.54%) rose.
Index heavyweight HDFC Bank dropped 1.14% at Rs 1,120. The stock hit a high of Rs 1,134 and a low of Rs 1,118.80 in intraday trade.
IndusInd Bank was up 0.35% at Rs 1,040.85 after the bank announced during trading hours today, 6 May 2016, that it has inaugurated a new branch located at CR Avenue in Kolkata. With this, IndusInd Bank now has 15 branches in Kolkata and 42 branches in the state of West Bengal. The bank said it plans to further strengthen its presence and customer reach in West Bengal with more branches in the corning quarters.
Meanwhile, the Reserve Bank of India (RBI) yesterday, 5 May 2016, issued draft guidelines on granting licences on a continuous basis for setting up of universal banks in the private sector. The bank can be promoted by a non-banking finance company (NBFC) controlled by residents with a successful track record for at least 10 years and individuals/professionals who are residents and have 10 years of experience in banking and finance. The RBI has also allowed entities/groups in the private sector owned and controlled by residents to promote a universal bank subject to the condition that the non-financial business of the group does not account for 40% or more in terms of total assets or gross income. The initial minimum paid-up voting equity capital for a universal bank has been set at Rs 500 crore. Thereafter, the bank will be required to have a minimum net worth of Rs 500 crore at all times. The bank will have to open at least 25% of its branches in unbanked rural centres (population up to 9,999 as per the latest census). The bank will have to comply with the priority sector lending targets and sub-targets as applicable to the existing domestic scheduled commercial banks. The board of the bank should have a majority of independent directors, as per the draft guidelines.
The promoter group of the bank will be required to hold a minimum of 40% of the paid-up voting equity capital of the bank with a lock-in period of five years from the date of commencement of the business of the bank. The promoter group has to reduce its holding in the bank to 15% within a period of 12 years from the date of commencement of business of the bank. The bank will be required to get its shares listed on the stock exchanges within six years of the commencement of business. The RBI has invited feedback from the public on the draft guidelines by 30 June 2016.
Bharti Airtel (Airtel) rose 0.96% at Rs 358.60 after its subsidiary Bharti Airtel International (Netherlands) BV announced an agreement for the divestment of approximately 950 telecom towers in the Democratic Republic of Congo (DRC) to and Helios Towers Africa (HTA). The divestment also includes towers currently under construction in the DRC. The deal will help Airtel deleverage through debt reduction and reduced ongoing capital expenditure. Post deal, Airtel will have full access to the towers from HTA under a long term lease contract. The agreement will allow Airtel to focus on its core business and customers, while enabling it to deleverage through debt reduction. The deal will significantly reduce Airtel's ongoing capital expenditure on passive infrastructure and also mitigate the proliferation of towers through enhanced sharing. The announcement was made after trading hours yesterday, 5 May 2016.
Hero MotoCorp dropped in volatile trade as its fourth quarter results came in line with market expectations. The stock was down 0.75% at Rs 2,872.30. The stock hit a high of Rs 2,913 and a low of Rs 2,829 in intraday trade. The company's net profit rose 70.85% to Rs 814.16 crore on 10.57% increase in total income to Rs 7614.61 crore in Q4 March 2016 over Q4 March 2015. EBITDA (earnings before interest, taxation, depreciation and amortization) margin edged higher to 15.65% in Q4 March 2016, from 12.34% in Q4 March 2015. The improved profit margins were the combined result of the highest-ever quarterly sales of 17.21 lakh units and several margin improvement initiatives taken during the period, the company said in a statement. The result was announced after trading hours yesterday, 5 May 2016.
Hero MotoCorp's Chairman, Managing Director and CEO Pawan Munjal said that the company continues to remain cautiously optimistic for the year ending 31 March 2017 (FY 2017). The industry hopes for a good monsoon, which may help market sentiments to improve towards the second half of this fiscal, Munjal said.
Eicher Motors rose 2.69% at Rs 20,216.80 in the wake of the company's announcement of strong financial performance for the quarter ended 31 March 2016 and management commentary of positive outlook for the motorcycle business. The stock had fallen 0.3% to settle at Rs 19,687.45 yesterday, 5 May 2016, after the company announced the results during trading hours. The company's consolidated net profit rose 71.3% to Rs 334.50 crore on 46.6% growth in total income from operations to Rs 3764.90 crore in the quarter ended 31 March 2016 over the quarter ended 31 March 2015.
At the time of announcement of the results, Eicher Motors' Managing Director & CEO Siddhartha Lal said that the immediate business outlook for the Royal Enfield motorcycles business remains strong. Royal Enfield will invest Rs 600 crore during the year ending 31 March 2017 (FY 2017) towards product development, enhancing manufacturing capacity and market development activities across geographies and for setting up two technical centres - one in Leicestershire, UK and another in Chennai, India.
Index heavyweight and cigarette major ITC trimmed losses triggered by the company's announcement of temporary closure of manufacturing of cigarettes at all its cigarette manufacturing units. The stock was down 0.11% at Rs 317.20. The stock hit a high of Rs 319.35 and a low of Rs 306 in intraday trade. The company has announced temporary closure of its cigarette factories from 4 May 2016 until it is in a position to comply with the rules on pictorial warnings on cigarette packs. The announcement was made after market hours yesterday, 5 May 2016. The Supreme Court on 4 May 2016 passed an order transferring to the Karnataka High Court all writ petitions pending in various courts challenging the rules prescribing 85% pictorial warnings on cigarette packs. The Supreme Court observed that all parties should endeavour to follow the existing rules on pictorial warnings on cigarette packs.
The government had notified that cigarette companies have to carry warning over 85% of the pack from 1 April 2016, sharply higher than earlier 40% of the pack.
Stocks of public sector companies witnessed a mixed trend. GAIL (India) (up 5%), National Aluminium Company (up 1.52%) and Coal India (up 0.02%) edged higher. Shipping Corporation of India (down 1.67%), Power Finance Corporation (down 1.42%), Container Corporation of India (down 1.39%), Rural Electrification Corporation (down 1.19%) and Power Grid Corporation of India (down 0.73%) edged lower. Shares of Steel Authority of India were unchanged at Rs 42.20.
Bharat Heavy Electricals (Bhel) rose 3.17% at Rs 126.75 after the company announced that it has added another coal-based power plant to the grid by successfully commissioning a 500 megawatts (MW) thermal unit in Jharkhand. The unit has been commissioned by Bhel at Bokaro Thermal Power-A station of Damodar Valley Corporation (DVC) in Jharkhand. Bhel has executed the contract for setting up the 500 MW coal-based unit on engineering, procurement and construction (EPC) basis. The announcement was made during market hours today, 6 May 2016.
NTPC rose 0.5% at Rs 140.05 after the company after trading hours yesterday, 5 May 2016, announced that it has raised Rs 1000 crore through private placement of secured non-convertible debentures at a coupon of 8.05% per annum with a 10 year door-to-door maturity. The proceeds of the issue will be utilized to finance capital expenditure/refinancing the debt requirement in on-going projects including recoupment of expenditure already incurred.
Shares of oil exploration and production (E&P) were mixed. ONGC (down 1.21%) declined. Oil India (up 2.35%) and Cairn India (up 1.65%) rose.
Index heavyweight Reliance Industries was down 0.61% at Rs 969.15. The stock hit a high of Rs 976.95 and a low of Rs 967.50 in intraday trade.
Shares of public sector oil marketing companies (PSU OMCs) edged higher on decline in crude oil prices. Indian Oil Corporation (up 1.45%), HPCL (up 1.79%) and BPCL (up 0.05%) rose. Decline in crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. The government has already decontrolled pricing of petrol and diesel.
In global commodities markets, Brent for July settlement was currently down 32 cents at $44.69 a barrel. The contract had risen 39 cents or 0.87% to settle at $45.01 a barrel during the previous trading session.
The Sensex has fallen 378.12 points or 1.47% this month so far (till 6 May 2016). The Sensex has fallen 889.04 points or 3.4% in calendar year 2016 so far (till 6 May 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 2,733.89 points or 12.15%. The Sensex is off 3,349.83 points or 11.72% from a 52-week high of 28578.33 hit on 23 July 2015. The Sensex is off 4,796.24 points or 15.97% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, the monthly data released by Association of Mutual Funds In India (AMFI) showed that there was a net inflow Rs 4438 crore into equity mutual funds in April 2016. This compares with investors pulling out a net Rs 1370 crore from equity mutual funds in March 2016. There was a net inflow of Rs 366 crore into balanced funds in April 2016, which was higher than inflow of Rs 78 crore in March 2016. Balanced funds invest the money in a combination of equity and debt, with majority of the investment going into equity. The funds' investments range from 65% to 80% in equity and the rest in debt.
Stocks of public sector banks edged higher after the Lok Sabha passed the Insolvency and Bankruptcy Code, 2016 yesterday, 5 May 2016. Shares of public sector oil marketing companies (PSU OMCs) edged higher on decline in crude oil prices. Index heavyweight and cigarette major ITC trimmed losses triggered by the company's announcement of temporary closure of manufacturing of cigarettes at all its cigarette manufacturing units. Bharti Airtel rose after its subsidiary Bharti Airtel International (Netherlands) BV announced an agreement for the divestment of approximately 950 telecom towers in the Democratic Republic of Congo (DRC) to and Helios Towers Africa (HTA).
Eicher Motors rose in the wake of the company's announcement of strong financial performance for the quarter ended 31 March 2016 and management commentary of positive outlook for the motorcycle business. Hero MotoCorp dropped in volatile trade as its fourth quarter results came in line with market expectations. Bharat Heavy Electricals (Bhel) rose after the company announced that it has added another coal-based power plant to the grid by successfully commissioning a 500 megawatts (MW) thermal unit in Jharkhand.
In overseas stock markets, Asian and European stocks edged lower as investors turned cautious before the release of the influential US monthly non-farm payroll data for more clues about the interest rate outlook in the world's largest economy. Most US stocks edged lower yesterday, 5 May 2016, as investors awaited the key non-farm payrolls data. The US government will release the non-farm payroll data for April 2016 later in the global day today, 6 May 2016. The non-farm payroll data could provide more clues about the timing and quantum of future interest rate increases from the US Federal Reserve. The job data has implications for the US monetary policy. The US central bank's mandate centers on maximizing employment and keeping inflation at a 2% target level. The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 14-15 June 2016.
The Sensex lost 33.71 points or 0.13% to settle at 25,228.50, its lowest closing level since 4 May 2016. The index lost 204.28 points or 0.8% at the day's low of 25,057.93. The index lost 1.73 points at the day's high of 25,260.48.
The Nifty lost 2.05 points or 0.03% to settle at 7,733.45, its lowest closing level since 4 May 2016. The index lost 57.15 points or 0.73% at the day's low of 7,678.35. The index rose 3.40 points or 0.04% at the day's high of 7,738.90.
The BSE Mid-Cap index rose 0.37%, outperforming the Sensex. The BSE Small-Cap index lost 0.2%. The decline in this index was higher than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was negative. On BSE, 1,395 shares declined and 1,121 shares rose. A total of 189 shares were unchanged.
Total turnover on BSE amounted to Rs 1978 crore, lower than turnover of Rs 2336.37 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Healthcare index (down 0.86%), the BSE IT index (down 0.75%) and the BSE Capital Goods index (down 0.55%) underperformed the Sensex. The S&P BSE Telecom index (up 0.49%), the BSE Auto index (up 0.61%), the BSE Oil & Gas index (up 0.69%) and the BSE Power index (up 0.58%) outperformed the Sensex.
Pharma stocks dropped. Wockhardt (down 3.62%), Divi's Laboratories (down 2.3%), Dr Reddy's Laboratories (down 2.14%), Ipca Laboratories (down 2.01%), Cadila Healthcare (down 1.39%), Lupin (down 0.97%), Sun Pharmaceutical Industries (down 0.84%), Cipla (down 0.82%) and GlaxoSmithkline Pharmaceuticals (down 0.39%) edged lower. Alkem Laboratories (up 0.44%), Strides Shasun (up 0.31%) and Glenmark Pharmaceuticals (up 0.42%) edged higher.
Aurobindo Pharma was off 0.67% at Rs 799.80. The stock was volatile. The stock hit a high of Rs 807 and a low of Rs 795.15 in intraday trade. The company during market hours today, 6 May 2016, announced that it has received final approval from the US Food and Drug Administration (USFDA) to manufacture and market Fenofibrate tablets, 48 mg and 145 mg. This product is expected to be launched in the US in Q1 June 2016. The drug is bioequivalent and therapeutically equivalent to the reference listed drug product (RLD) Tricor tablets of AbbVie Inc.
Fenofibrate tablet is used to treat high level of cholesterol and triglyceride in the blood. The approved product has an estimated market size of $412 million in the US for the twelve months ended March 2016, according to IMS.
IT stocks declined. Tech Mahindra (down 1.48%), TCS (down 0.07%), HCL Technologies (down 1.21%) and Persistent Systems (down 0.62%) edged lower. Oracle Financial Services Software (up 0.89%) edged higher.
Index heavyweight and software major Infosys was off 0.92% at Rs 1,181.45. The stock hit a high of Rs 1,192 and a low of Rs 1,176.70 in intraday trade.
Wipro fell 1.92% at Rs 532.60. The company after trading hours yesterday, 5 May 2016, announced that it has won a multi-year contract from Thames Water in the United Kingdom. Wipro will develop new IT systems and processes to help Thames Water improve customer experience and drive operational efficiencies. In a separate announcement after trading hours yesterday, 5 May 2016, Wipro said that it has successfully implemented its Software as a Service (SaaS) platform- Managed File Transfer as a Service (MFTaaS) on Amazon Web Services (AWS) for organizations, thereby helping them integrate digitally with their clients, partners and employees. Wipro anticipates that the MFTaaS platform can potentially reduce up to 30% in TCO (Total Cost of Ownership) for its clients vis-a-vis traditional deployments, the company said in a statement.
Stocks of public sector banks edged higher after the Lok Sabha passed the Insolvency and Bankruptcy Code, 2016 yesterday, 5 May 2016. Corporation Bank (up 3.39%), State Bank of India (up 2.19%), IDBI Bank (up 1.88%), Bank of Baroda (up 1.21%), Union Bank of India (up 0.64%) and Bank of India (up 0.99%) rose. Punjab National Bank (down 0.92%) and Canara Bank (down 0.18%) declined. The bankruptcy bill aims to provide single unified law for timely resolution of insolvency and bankruptcy related cases in India. Once the bill becomes a law, it will help creditors recover bad debt faster. The news of the passage of the bill in the Lok Sabha hit the market after trading hours yesterday, 5 May 2016. The bill will now go to the Rajya Sabha for its passage.
Syndicate Bank rose 3.57% at Rs 68.20 after the bank said it has allotted 9.51 crore equity shares of face value of Rs 10 each for cash at an issue price of Rs 77.79 each, aggregating to Rs 740 crore on preferential basis to Government of India. The announcement was made after trading hours yesterday, 5 May 2016.
Stocks of private sector banks witnessed a mixed trend. Kotak Mahindra Bank (down 1.28%) and Yes Bank (down 0.25%) declined. Axis Bank (up 0.02%) and ICICI Bank (up 1.54%) rose.
Index heavyweight HDFC Bank dropped 1.14% at Rs 1,120. The stock hit a high of Rs 1,134 and a low of Rs 1,118.80 in intraday trade.
IndusInd Bank was up 0.35% at Rs 1,040.85 after the bank announced during trading hours today, 6 May 2016, that it has inaugurated a new branch located at CR Avenue in Kolkata. With this, IndusInd Bank now has 15 branches in Kolkata and 42 branches in the state of West Bengal. The bank said it plans to further strengthen its presence and customer reach in West Bengal with more branches in the corning quarters.
Meanwhile, the Reserve Bank of India (RBI) yesterday, 5 May 2016, issued draft guidelines on granting licences on a continuous basis for setting up of universal banks in the private sector. The bank can be promoted by a non-banking finance company (NBFC) controlled by residents with a successful track record for at least 10 years and individuals/professionals who are residents and have 10 years of experience in banking and finance. The RBI has also allowed entities/groups in the private sector owned and controlled by residents to promote a universal bank subject to the condition that the non-financial business of the group does not account for 40% or more in terms of total assets or gross income. The initial minimum paid-up voting equity capital for a universal bank has been set at Rs 500 crore. Thereafter, the bank will be required to have a minimum net worth of Rs 500 crore at all times. The bank will have to open at least 25% of its branches in unbanked rural centres (population up to 9,999 as per the latest census). The bank will have to comply with the priority sector lending targets and sub-targets as applicable to the existing domestic scheduled commercial banks. The board of the bank should have a majority of independent directors, as per the draft guidelines.
The promoter group of the bank will be required to hold a minimum of 40% of the paid-up voting equity capital of the bank with a lock-in period of five years from the date of commencement of the business of the bank. The promoter group has to reduce its holding in the bank to 15% within a period of 12 years from the date of commencement of business of the bank. The bank will be required to get its shares listed on the stock exchanges within six years of the commencement of business. The RBI has invited feedback from the public on the draft guidelines by 30 June 2016.
Bharti Airtel (Airtel) rose 0.96% at Rs 358.60 after its subsidiary Bharti Airtel International (Netherlands) BV announced an agreement for the divestment of approximately 950 telecom towers in the Democratic Republic of Congo (DRC) to and Helios Towers Africa (HTA). The divestment also includes towers currently under construction in the DRC. The deal will help Airtel deleverage through debt reduction and reduced ongoing capital expenditure. Post deal, Airtel will have full access to the towers from HTA under a long term lease contract. The agreement will allow Airtel to focus on its core business and customers, while enabling it to deleverage through debt reduction. The deal will significantly reduce Airtel's ongoing capital expenditure on passive infrastructure and also mitigate the proliferation of towers through enhanced sharing. The announcement was made after trading hours yesterday, 5 May 2016.
Hero MotoCorp dropped in volatile trade as its fourth quarter results came in line with market expectations. The stock was down 0.75% at Rs 2,872.30. The stock hit a high of Rs 2,913 and a low of Rs 2,829 in intraday trade. The company's net profit rose 70.85% to Rs 814.16 crore on 10.57% increase in total income to Rs 7614.61 crore in Q4 March 2016 over Q4 March 2015. EBITDA (earnings before interest, taxation, depreciation and amortization) margin edged higher to 15.65% in Q4 March 2016, from 12.34% in Q4 March 2015. The improved profit margins were the combined result of the highest-ever quarterly sales of 17.21 lakh units and several margin improvement initiatives taken during the period, the company said in a statement. The result was announced after trading hours yesterday, 5 May 2016.
Hero MotoCorp's Chairman, Managing Director and CEO Pawan Munjal said that the company continues to remain cautiously optimistic for the year ending 31 March 2017 (FY 2017). The industry hopes for a good monsoon, which may help market sentiments to improve towards the second half of this fiscal, Munjal said.
Eicher Motors rose 2.69% at Rs 20,216.80 in the wake of the company's announcement of strong financial performance for the quarter ended 31 March 2016 and management commentary of positive outlook for the motorcycle business. The stock had fallen 0.3% to settle at Rs 19,687.45 yesterday, 5 May 2016, after the company announced the results during trading hours. The company's consolidated net profit rose 71.3% to Rs 334.50 crore on 46.6% growth in total income from operations to Rs 3764.90 crore in the quarter ended 31 March 2016 over the quarter ended 31 March 2015.
At the time of announcement of the results, Eicher Motors' Managing Director & CEO Siddhartha Lal said that the immediate business outlook for the Royal Enfield motorcycles business remains strong. Royal Enfield will invest Rs 600 crore during the year ending 31 March 2017 (FY 2017) towards product development, enhancing manufacturing capacity and market development activities across geographies and for setting up two technical centres - one in Leicestershire, UK and another in Chennai, India.
Index heavyweight and cigarette major ITC trimmed losses triggered by the company's announcement of temporary closure of manufacturing of cigarettes at all its cigarette manufacturing units. The stock was down 0.11% at Rs 317.20. The stock hit a high of Rs 319.35 and a low of Rs 306 in intraday trade. The company has announced temporary closure of its cigarette factories from 4 May 2016 until it is in a position to comply with the rules on pictorial warnings on cigarette packs. The announcement was made after market hours yesterday, 5 May 2016. The Supreme Court on 4 May 2016 passed an order transferring to the Karnataka High Court all writ petitions pending in various courts challenging the rules prescribing 85% pictorial warnings on cigarette packs. The Supreme Court observed that all parties should endeavour to follow the existing rules on pictorial warnings on cigarette packs.
The government had notified that cigarette companies have to carry warning over 85% of the pack from 1 April 2016, sharply higher than earlier 40% of the pack.
Stocks of public sector companies witnessed a mixed trend. GAIL (India) (up 5%), National Aluminium Company (up 1.52%) and Coal India (up 0.02%) edged higher. Shipping Corporation of India (down 1.67%), Power Finance Corporation (down 1.42%), Container Corporation of India (down 1.39%), Rural Electrification Corporation (down 1.19%) and Power Grid Corporation of India (down 0.73%) edged lower. Shares of Steel Authority of India were unchanged at Rs 42.20.
Bharat Heavy Electricals (Bhel) rose 3.17% at Rs 126.75 after the company announced that it has added another coal-based power plant to the grid by successfully commissioning a 500 megawatts (MW) thermal unit in Jharkhand. The unit has been commissioned by Bhel at Bokaro Thermal Power-A station of Damodar Valley Corporation (DVC) in Jharkhand. Bhel has executed the contract for setting up the 500 MW coal-based unit on engineering, procurement and construction (EPC) basis. The announcement was made during market hours today, 6 May 2016.
NTPC rose 0.5% at Rs 140.05 after the company after trading hours yesterday, 5 May 2016, announced that it has raised Rs 1000 crore through private placement of secured non-convertible debentures at a coupon of 8.05% per annum with a 10 year door-to-door maturity. The proceeds of the issue will be utilized to finance capital expenditure/refinancing the debt requirement in on-going projects including recoupment of expenditure already incurred.
Shares of oil exploration and production (E&P) were mixed. ONGC (down 1.21%) declined. Oil India (up 2.35%) and Cairn India (up 1.65%) rose.
Index heavyweight Reliance Industries was down 0.61% at Rs 969.15. The stock hit a high of Rs 976.95 and a low of Rs 967.50 in intraday trade.
Shares of public sector oil marketing companies (PSU OMCs) edged higher on decline in crude oil prices. Indian Oil Corporation (up 1.45%), HPCL (up 1.79%) and BPCL (up 0.05%) rose. Decline in crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. The government has already decontrolled pricing of petrol and diesel.
In global commodities markets, Brent for July settlement was currently down 32 cents at $44.69 a barrel. The contract had risen 39 cents or 0.87% to settle at $45.01 a barrel during the previous trading session.
The Sensex has fallen 378.12 points or 1.47% this month so far (till 6 May 2016). The Sensex has fallen 889.04 points or 3.4% in calendar year 2016 so far (till 6 May 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 2,733.89 points or 12.15%. The Sensex is off 3,349.83 points or 11.72% from a 52-week high of 28578.33 hit on 23 July 2015. The Sensex is off 4,796.24 points or 15.97% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, the monthly data released by Association of Mutual Funds In India (AMFI) showed that there was a net inflow Rs 4438 crore into equity mutual funds in April 2016. This compares with investors pulling out a net Rs 1370 crore from equity mutual funds in March 2016. There was a net inflow of Rs 366 crore into balanced funds in April 2016, which was higher than inflow of Rs 78 crore in March 2016. Balanced funds invest the money in a combination of equity and debt, with majority of the investment going into equity. The funds' investments range from 65% to 80% in equity and the rest in debt.
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