Market gains on GST-fuelled optimism
The market edged higher last week on hopes that the Goods & Services Tax (GST) bill inched closer to becoming a reality after media reports suggested that the Union Cabinet approved amendments to the constitutional amendment bill, incorporating suggestions by some of the states and opposition parties. Market sentiment was also boosted after the US Federal Reserve has opted to keep interest rates at ultra-low level after the conclusion of a two-day monetary policy meeting. The ultra-loose monetary policy in the US has encouraged heavy investment in higher-yielding emerging markets. The barometer index, the S&P BSE Sensex, moved past the psychologically important 28,000 mark.
The Sensex rose 248.62 points or 0.89% to settle at 28,051.86, in the week ended 29 July 2016. The Nifty 50 index gained 97.30 points or 1.14% to settle at 8,638.50. The BSE Mid-Cap index gained 3.13%. The BSE Small-Cap index rose 1.67%. Both these indices outperformed the Sensex.
According to reports, the government on Friday, 29 July 2016, listed the much-awaited GST bill for consideration and passage in Rajya Sabha's agenda for the next week. Minister of state for parliamentary affairs Mukhtar Abbas Naqvi, while making a statement regarding government business for the week starting 1 August in the Upper House, reportedly said that the GST constitutional amendment bill will be taken up for consideration and passage in the Rajya Sabha. The government is keen to get the GST Bill approved during the Monsoon Session of Parliament ending on 12 August 2016.
The GST bill, which has been approved by the Lok Sabha, is pending in the Rajya Sabha because of opposition to the bill in its current form by the Congress party. A constitutional amendment bill requires at least 50% attendance and support of two-third of those present and voting in the house. For the GST bill to become a law, the bill also needs to be approved by half the state assemblies after its passage in the parliament. GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. The GST seeks to create a seamless national market in the country by replacing plethora of state taxes and central taxes by one tax. The month-long monsoon session of the parliament will conclude on 12 August 2016.
In overseas stock markets, the US Federal Open Market Committee (FOMC) decided not to raise interest rates, maintaining the ultra-low level they have been at since December 2015. The US central bank opted to keep rates between 0.25% and 0.5% after the conclusion of two-day monetary policy on Wednesday, 27 July 2016. The Fed said near-term risks to the economic outlook have diminished but inflation remained below the bank's target.
Meanwhile, the Bank of Japan (BOJ) kept interest rates and government bond buying unchanged after the conclusion of a two-day monetary policy meeting. The Japan's central bank said it would buy 6 trillion yen worth of exchange-traded funds annually, up from 3.3 trillion yen previously, in an attempt to stoke inflation and growth by pumping money into the economy. BOJ said it would leave its asset-purchase target at 80 trillion yen a year.
Back home, trading for the week started on a strong note. Banking sector stocks, shares of state-run oil companies and index heavyweight HDFC led the upmove on the domestic bourses on Monday, 25 July 2016, as investors awaited progress on the passage of the Goods and Services Tax (GST) constitutional amendment bill in parliament. The Sensex rose 292.10 points or 1.05% to settle at 28,095.34, its highest closing level since 10 August 2015.
Disappointing first quarter results from passenger car major Maruti Suzuki India (MSIL) and weak results from Dr Reddy's Laboratories (DRL) pulled the market lower towards the fag end of the trading session on Tuesday, 26 July 2016. The Sensex fell 118.82 points or 0.42% to settle at 27,976.52, its lowest closing level since 22 July 2016.
Amid hopes for the passage of the GST constitution amendment bill during the ongoing monsoon session of parliament, the two benchmark indices eked out small gains on Wednesday, 27 July 2016. The Sensex rose 47.81 points or 0.17% to settle at 28,024.33, its highest closing level since 25 July 2016.
Key benchmark indices registered decent gains on Thursday, 28 July 2016 amid hopes that the GST bill inched closer to becoming a reality after media reports suggested that the Union Cabinet approved amendments to the constitutional amendment bill, incorporating suggestions by some of the states and opposition parties. The Sensex rose 184.29 points or 0.66% to settle at 28,208.62, its highest closing level since 7 August 2015.
Losses in telecom stocks and index heavyweights HDFC and Reliance Industries led losses for key benchmark indices on the last trading session of the week on Friday, 29 July 2016. The barometer index, the S&P BSE Sensex lost 156.76 points or 0.56% to settle at 28,051.86. Weakness in Asian stocks weighed on sentiment on the domestic bourses.
Among the 30-shares in the Sensex pack, 19 rose and the remaining shares fell.
Car major Maruti Suzuki India was the biggest gainer in the Sensex pack last week. The stock rose 7.74% to Rs 4755.20. The company's net profit rose 23.01% to Rs 1486.20 crore on 13.45% rise in total income to Rs 15410.60 crore in Q1 June 2016 over Q1 June 2015. The result was announced during market hours on Tuesday, 26 July 2016.
Maruti Suzuki India said that higher profit in Q1 June 2016 was helped by a higher turnover, material cost reduction, higher non-operating income and lower depreciation. Adverse foreign exchange movement reduced profits to some extent.
The company said that the unfortunate incident of fire at a key vendor of the company resulted in lower sales in June 2016. The company hopes to recover the lost sales during the course of the year.
In a separate announcement on Wednesday, 27 July 2016, Maruti Suzuki India announced that it will start sales of its first Light Commercial Vehicle (LCV) "Super Carry" towards the end of August.
Two-wheelers major Hero MotoCorp fell 1.65% to Rs 3,206.45 after the company announced that the members of the company's promoter family decided to realign their businesses to achieve future growth and expansion. The announcement was on Thursday, 28 July 2016.
Hero MotoCorp (HMCL) announced that keeping with the core values of the Hero Group as established by the late Dr. Brijmohan Lall Munjal, the company's promoter members of the BML Munjal family have decided to realign their businesses to achieve future growth and expansion. With the blessings of Santosh Munjal, the matriarch of the Munjal family, Sunil Kant Munjal, Joint Managing Director, HMCL and Chairman, Hero Corporate Service, intends to focus his time and energy on his independent and core businesses, and to pursue new business interests, HMCL said. He has, therefore, expressed his desire to step down from the Board of Directors of HMCL once his tenure as the Joint Managing Director of the company comes to an end on 16 August 2016, HMCL said. This realignment will not impact the overall promoter shareholding, strategic direction or operational management of the company, HMCL said. On this occasion, Pawan Munjal, Chairman, Managing Director & Chief Executive Officer of HMCL, and the senior leadership team at HMCL reiterated their commitment to continue to build the company into a truly world class enterprise in all respects.
As per the shareholding pattern, promoters hold 34.64% stake in the company as on 30 June 2016.
Asian Paints jumped after the company reported strong Q1 results. The stock rose 6.64% at Rs 1,114.70. The company's consolidated net profit after minority interest rose 17.9% to Rs 535 crore on 10.2% increase interest from operations to Rs 4082.10 crore in Q1 June 2016 over Q1 June 2015. Profit before depreciation, interest, and taxes (PBDIT) rose 20.9% to Rs 820.30 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours on Wednesday, 27 July 2016.
Sun Pharmaceutical Industries (Sun Pharma) rose 5.33% to Rs 829.75. The company said it signed an agreement with RPG Life Sciences on 27 July 2016 to divest seven prescription brands in India, owned by Sun Pharma and its subsidiary, for a consideration of Rs 41 crore. The seven divested brands include brands used for treatment of respiratory-track infections, urological disorders, cardiovascular diseases and brands in health supplements segment. This divestment is subject to receipt of Competition Commission of India's (CCI) approval. The announcement was made on Wednesday, 27 July 2016.
Separately, Sun Pharma before market hours on Thursday, 28 July 2016, announced a licencing agreement with Almirall on the development and commercialization of Tildrakizumab for psoriasis in Europe. Tildrakizumab is an investigational IL-23p19 inhibitor currently being evaluated in patients with moderate-to-severe plaque psoriasis. Under the terms of the licence agreement, Almirall will pay Sun Pharma an initial upfront payment of $50 million. Phase-3 studies of Tildrakizumab have recently been completed. Sun Pharma will be eligible to receive development and regulatory milestone payments and, additionally, sales milestone payments and royalties on net sales, the terms of which are confidential. Almirall will be able to lead European studies, and participate in larger global clinical studies for psoriasis indication subject to the terms of the Sun Pharma-Merck agreements, as well as certain cost sharing agreements. Sun Pharma will continue to lead development of Tildrakizumab for other indications, where Almirall will have right of first negotiation for certain indications in Europe. Additionally, the license agreement has a provision for possible co-promotion agreement at some point in the future, subject to certain conditions, Sun Pharma said in a statement.
IT pivotals rose. TCS (up 4.36%), Wipro (up 1.59%) and Infosys (up 0.12%), edged higher.
Most banking pivotals edged higher. State Bank of India (up 2.51%), Axis Bank (up 1.58%) and HDFC Bank (up 1.23%), edged higher.
Private sector lender ICICI Bank fell 0.27% to Rs 262.85.
Housing finance major HDFC rose 1.38% to Rs 1,374.35. The company's net profit rose 37.45% to Rs 1870.73 crore on 19.4% growth in total income to Rs 8393.33 crore in Q1 June 2016 over Q1 June 2015. Housing Development Finance Corporation (HDFC)'s loan book increased to Rs 2.65 lakh crore as on 30 June 2016, from Rs 2.31 lakh crore as on 30 June 2015. This is after considering the loans sold during the preceding 12 months amounting to Rs 14011 crore. During Q1 June 2016, HDFC sold loans amounting to Rs 5108 crore of which Rs 3296 crore was sold to HDFC Bank and the balance to other banks.
There was a pre-tax gain of Rs 921.61 crore in Q1 June 2016 from sale of 12.33 crore shares of HDFC ERGO General Insurance Company to Ergo International AG. HDFC made an additional one time provision of Rs 275 crore in Q1 June 2016 towards standard assets and other contingencies.
On consolidated basis, HDFC's net profit rose 26.88% to Rs 2796.92 crore on 18.67% growth in total income to Rs 13531.48 crore in Q1 June 2016 over Q1 June 2015. The result was announced during market hours on Wednesday, 27 July 2016.
L&T fell 1.01% at Rs 1,558. The company's consolidated net profit rose 46% to Rs 610 crore on 9.1% growth in gross revenue to Rs 21874 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours on Friday, 29 July 2016.
L&T's consolidated order book increased by 8% on year-on-year (YoY) basis to Rs 2.57 lakh crore as on 30 June 2016. International order book constituted 29% of the total order book.
On future business outlook, L&T said that on the international front, the company will continue to target select prospects in the space of core infrastructure and oil & gas sector in the Middle East, Africa and other neighboring countries. The company said it has recently finalised its strategic plan for five years with a focus on profitable growth. L&T said it remains well placed to benefit from emerging opportunities with its execution capabilities and leadership position in various sectors.
Bharti Airtel fell 1.50% to Rs 362.05 after consolidated net profit fell 30.8% to Rs 1462 crore on 7.9% increase in total revenues to Rs 25546 crore in Q1 June 2016 over Q1 June 2015. The company's consolidated revenues grew 8.4% to Rs 25546 crore in Q1 June 2016 over Q1 June 2015 on an underlying basis, adjusted for Africa divested operating unit and tower assets sale.
Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 16.4% to Rs 9591 crore in Q1 June 2016 over Q1 June 2015. The EBITDA margin edged up to 37.5% in Q1 June 2016 from 34.8% in Q1 June 2015.
The company has adopted Indian Accounting Standards (Ind-AS) for its consolidated results effective 1 April 2016 with periods reinstated for like to like comparison.
Consolidated mobile data revenues grew by 34.1% to Rs 4640 crore in Q1 June 2016 over Q1 June 2015.
India revenues grew by 10.3% to Rs 19155 crore in Q1 June 2016 over Q1 June 2015. This was led by healthy growth of 9.1% in Mobile, 11.0% in Homes, 22.2% in Digital TV and 10.4% in Airtel Business on year-on-year (Y-o-Y) basis. The result was announced on Wednesday 27 July 2016.
Dr Reddy's Laboratories slumped 18.53% to Rs 2,937.25. It was the biggest Sensex loser last week. The selling in the counter was triggered by a slew of brokerages cut their ratings on the stock following weaker-than-expected Q1 earnings. The company's consolidated net profit fell 77.2% to Rs 146.20 crore on 14.1% decline in total income to Rs 3289.50 crore in Q1 June 2016 over Q1 June 2015. The result was announced during market hours on Tuesday, 26 July 2016.
At the time of announcing Q1 June 2016 results, DRL said that its top and bottom lines were impacted by a decline in volume growth, particularly in the US market and the loss of business in Venezuela. The company also faced a number of challenges in Q1 June 2016 including price erosion and delayed launches as a result of the warning letter, which significantly impacted its earnings.
In a conference call held after market hours on Tuesday, 26 July 2016, DRL's executives reportedly indicated a tough Q2 September 2016, as price and volume erosion of some key products is expected to continue in the absence of any significant new generic approvals. Also there are concerns that competitive pressures in the US, may linger for the balance of the year, reports indicated. The company is losing a key contract supply account of McNeil Consumer Healthcare from its Shreveport facility, Louisiana, which is set to have an impact of $25 million on net profits of the company in coming quarters, reports said.
The Sensex rose 248.62 points or 0.89% to settle at 28,051.86, in the week ended 29 July 2016. The Nifty 50 index gained 97.30 points or 1.14% to settle at 8,638.50. The BSE Mid-Cap index gained 3.13%. The BSE Small-Cap index rose 1.67%. Both these indices outperformed the Sensex.
According to reports, the government on Friday, 29 July 2016, listed the much-awaited GST bill for consideration and passage in Rajya Sabha's agenda for the next week. Minister of state for parliamentary affairs Mukhtar Abbas Naqvi, while making a statement regarding government business for the week starting 1 August in the Upper House, reportedly said that the GST constitutional amendment bill will be taken up for consideration and passage in the Rajya Sabha. The government is keen to get the GST Bill approved during the Monsoon Session of Parliament ending on 12 August 2016.
The GST bill, which has been approved by the Lok Sabha, is pending in the Rajya Sabha because of opposition to the bill in its current form by the Congress party. A constitutional amendment bill requires at least 50% attendance and support of two-third of those present and voting in the house. For the GST bill to become a law, the bill also needs to be approved by half the state assemblies after its passage in the parliament. GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. The GST seeks to create a seamless national market in the country by replacing plethora of state taxes and central taxes by one tax. The month-long monsoon session of the parliament will conclude on 12 August 2016.
In overseas stock markets, the US Federal Open Market Committee (FOMC) decided not to raise interest rates, maintaining the ultra-low level they have been at since December 2015. The US central bank opted to keep rates between 0.25% and 0.5% after the conclusion of two-day monetary policy on Wednesday, 27 July 2016. The Fed said near-term risks to the economic outlook have diminished but inflation remained below the bank's target.
Meanwhile, the Bank of Japan (BOJ) kept interest rates and government bond buying unchanged after the conclusion of a two-day monetary policy meeting. The Japan's central bank said it would buy 6 trillion yen worth of exchange-traded funds annually, up from 3.3 trillion yen previously, in an attempt to stoke inflation and growth by pumping money into the economy. BOJ said it would leave its asset-purchase target at 80 trillion yen a year.
Back home, trading for the week started on a strong note. Banking sector stocks, shares of state-run oil companies and index heavyweight HDFC led the upmove on the domestic bourses on Monday, 25 July 2016, as investors awaited progress on the passage of the Goods and Services Tax (GST) constitutional amendment bill in parliament. The Sensex rose 292.10 points or 1.05% to settle at 28,095.34, its highest closing level since 10 August 2015.
Disappointing first quarter results from passenger car major Maruti Suzuki India (MSIL) and weak results from Dr Reddy's Laboratories (DRL) pulled the market lower towards the fag end of the trading session on Tuesday, 26 July 2016. The Sensex fell 118.82 points or 0.42% to settle at 27,976.52, its lowest closing level since 22 July 2016.
Amid hopes for the passage of the GST constitution amendment bill during the ongoing monsoon session of parliament, the two benchmark indices eked out small gains on Wednesday, 27 July 2016. The Sensex rose 47.81 points or 0.17% to settle at 28,024.33, its highest closing level since 25 July 2016.
Key benchmark indices registered decent gains on Thursday, 28 July 2016 amid hopes that the GST bill inched closer to becoming a reality after media reports suggested that the Union Cabinet approved amendments to the constitutional amendment bill, incorporating suggestions by some of the states and opposition parties. The Sensex rose 184.29 points or 0.66% to settle at 28,208.62, its highest closing level since 7 August 2015.
Losses in telecom stocks and index heavyweights HDFC and Reliance Industries led losses for key benchmark indices on the last trading session of the week on Friday, 29 July 2016. The barometer index, the S&P BSE Sensex lost 156.76 points or 0.56% to settle at 28,051.86. Weakness in Asian stocks weighed on sentiment on the domestic bourses.
Among the 30-shares in the Sensex pack, 19 rose and the remaining shares fell.
Car major Maruti Suzuki India was the biggest gainer in the Sensex pack last week. The stock rose 7.74% to Rs 4755.20. The company's net profit rose 23.01% to Rs 1486.20 crore on 13.45% rise in total income to Rs 15410.60 crore in Q1 June 2016 over Q1 June 2015. The result was announced during market hours on Tuesday, 26 July 2016.
Maruti Suzuki India said that higher profit in Q1 June 2016 was helped by a higher turnover, material cost reduction, higher non-operating income and lower depreciation. Adverse foreign exchange movement reduced profits to some extent.
The company said that the unfortunate incident of fire at a key vendor of the company resulted in lower sales in June 2016. The company hopes to recover the lost sales during the course of the year.
In a separate announcement on Wednesday, 27 July 2016, Maruti Suzuki India announced that it will start sales of its first Light Commercial Vehicle (LCV) "Super Carry" towards the end of August.
Two-wheelers major Hero MotoCorp fell 1.65% to Rs 3,206.45 after the company announced that the members of the company's promoter family decided to realign their businesses to achieve future growth and expansion. The announcement was on Thursday, 28 July 2016.
Hero MotoCorp (HMCL) announced that keeping with the core values of the Hero Group as established by the late Dr. Brijmohan Lall Munjal, the company's promoter members of the BML Munjal family have decided to realign their businesses to achieve future growth and expansion. With the blessings of Santosh Munjal, the matriarch of the Munjal family, Sunil Kant Munjal, Joint Managing Director, HMCL and Chairman, Hero Corporate Service, intends to focus his time and energy on his independent and core businesses, and to pursue new business interests, HMCL said. He has, therefore, expressed his desire to step down from the Board of Directors of HMCL once his tenure as the Joint Managing Director of the company comes to an end on 16 August 2016, HMCL said. This realignment will not impact the overall promoter shareholding, strategic direction or operational management of the company, HMCL said. On this occasion, Pawan Munjal, Chairman, Managing Director & Chief Executive Officer of HMCL, and the senior leadership team at HMCL reiterated their commitment to continue to build the company into a truly world class enterprise in all respects.
As per the shareholding pattern, promoters hold 34.64% stake in the company as on 30 June 2016.
Asian Paints jumped after the company reported strong Q1 results. The stock rose 6.64% at Rs 1,114.70. The company's consolidated net profit after minority interest rose 17.9% to Rs 535 crore on 10.2% increase interest from operations to Rs 4082.10 crore in Q1 June 2016 over Q1 June 2015. Profit before depreciation, interest, and taxes (PBDIT) rose 20.9% to Rs 820.30 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours on Wednesday, 27 July 2016.
Sun Pharmaceutical Industries (Sun Pharma) rose 5.33% to Rs 829.75. The company said it signed an agreement with RPG Life Sciences on 27 July 2016 to divest seven prescription brands in India, owned by Sun Pharma and its subsidiary, for a consideration of Rs 41 crore. The seven divested brands include brands used for treatment of respiratory-track infections, urological disorders, cardiovascular diseases and brands in health supplements segment. This divestment is subject to receipt of Competition Commission of India's (CCI) approval. The announcement was made on Wednesday, 27 July 2016.
Separately, Sun Pharma before market hours on Thursday, 28 July 2016, announced a licencing agreement with Almirall on the development and commercialization of Tildrakizumab for psoriasis in Europe. Tildrakizumab is an investigational IL-23p19 inhibitor currently being evaluated in patients with moderate-to-severe plaque psoriasis. Under the terms of the licence agreement, Almirall will pay Sun Pharma an initial upfront payment of $50 million. Phase-3 studies of Tildrakizumab have recently been completed. Sun Pharma will be eligible to receive development and regulatory milestone payments and, additionally, sales milestone payments and royalties on net sales, the terms of which are confidential. Almirall will be able to lead European studies, and participate in larger global clinical studies for psoriasis indication subject to the terms of the Sun Pharma-Merck agreements, as well as certain cost sharing agreements. Sun Pharma will continue to lead development of Tildrakizumab for other indications, where Almirall will have right of first negotiation for certain indications in Europe. Additionally, the license agreement has a provision for possible co-promotion agreement at some point in the future, subject to certain conditions, Sun Pharma said in a statement.
IT pivotals rose. TCS (up 4.36%), Wipro (up 1.59%) and Infosys (up 0.12%), edged higher.
Most banking pivotals edged higher. State Bank of India (up 2.51%), Axis Bank (up 1.58%) and HDFC Bank (up 1.23%), edged higher.
Private sector lender ICICI Bank fell 0.27% to Rs 262.85.
Housing finance major HDFC rose 1.38% to Rs 1,374.35. The company's net profit rose 37.45% to Rs 1870.73 crore on 19.4% growth in total income to Rs 8393.33 crore in Q1 June 2016 over Q1 June 2015. Housing Development Finance Corporation (HDFC)'s loan book increased to Rs 2.65 lakh crore as on 30 June 2016, from Rs 2.31 lakh crore as on 30 June 2015. This is after considering the loans sold during the preceding 12 months amounting to Rs 14011 crore. During Q1 June 2016, HDFC sold loans amounting to Rs 5108 crore of which Rs 3296 crore was sold to HDFC Bank and the balance to other banks.
There was a pre-tax gain of Rs 921.61 crore in Q1 June 2016 from sale of 12.33 crore shares of HDFC ERGO General Insurance Company to Ergo International AG. HDFC made an additional one time provision of Rs 275 crore in Q1 June 2016 towards standard assets and other contingencies.
On consolidated basis, HDFC's net profit rose 26.88% to Rs 2796.92 crore on 18.67% growth in total income to Rs 13531.48 crore in Q1 June 2016 over Q1 June 2015. The result was announced during market hours on Wednesday, 27 July 2016.
L&T fell 1.01% at Rs 1,558. The company's consolidated net profit rose 46% to Rs 610 crore on 9.1% growth in gross revenue to Rs 21874 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours on Friday, 29 July 2016.
L&T's consolidated order book increased by 8% on year-on-year (YoY) basis to Rs 2.57 lakh crore as on 30 June 2016. International order book constituted 29% of the total order book.
On future business outlook, L&T said that on the international front, the company will continue to target select prospects in the space of core infrastructure and oil & gas sector in the Middle East, Africa and other neighboring countries. The company said it has recently finalised its strategic plan for five years with a focus on profitable growth. L&T said it remains well placed to benefit from emerging opportunities with its execution capabilities and leadership position in various sectors.
Bharti Airtel fell 1.50% to Rs 362.05 after consolidated net profit fell 30.8% to Rs 1462 crore on 7.9% increase in total revenues to Rs 25546 crore in Q1 June 2016 over Q1 June 2015. The company's consolidated revenues grew 8.4% to Rs 25546 crore in Q1 June 2016 over Q1 June 2015 on an underlying basis, adjusted for Africa divested operating unit and tower assets sale.
Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 16.4% to Rs 9591 crore in Q1 June 2016 over Q1 June 2015. The EBITDA margin edged up to 37.5% in Q1 June 2016 from 34.8% in Q1 June 2015.
The company has adopted Indian Accounting Standards (Ind-AS) for its consolidated results effective 1 April 2016 with periods reinstated for like to like comparison.
Consolidated mobile data revenues grew by 34.1% to Rs 4640 crore in Q1 June 2016 over Q1 June 2015.
India revenues grew by 10.3% to Rs 19155 crore in Q1 June 2016 over Q1 June 2015. This was led by healthy growth of 9.1% in Mobile, 11.0% in Homes, 22.2% in Digital TV and 10.4% in Airtel Business on year-on-year (Y-o-Y) basis. The result was announced on Wednesday 27 July 2016.
Dr Reddy's Laboratories slumped 18.53% to Rs 2,937.25. It was the biggest Sensex loser last week. The selling in the counter was triggered by a slew of brokerages cut their ratings on the stock following weaker-than-expected Q1 earnings. The company's consolidated net profit fell 77.2% to Rs 146.20 crore on 14.1% decline in total income to Rs 3289.50 crore in Q1 June 2016 over Q1 June 2015. The result was announced during market hours on Tuesday, 26 July 2016.
At the time of announcing Q1 June 2016 results, DRL said that its top and bottom lines were impacted by a decline in volume growth, particularly in the US market and the loss of business in Venezuela. The company also faced a number of challenges in Q1 June 2016 including price erosion and delayed launches as a result of the warning letter, which significantly impacted its earnings.
In a conference call held after market hours on Tuesday, 26 July 2016, DRL's executives reportedly indicated a tough Q2 September 2016, as price and volume erosion of some key products is expected to continue in the absence of any significant new generic approvals. Also there are concerns that competitive pressures in the US, may linger for the balance of the year, reports indicated. The company is losing a key contract supply account of McNeil Consumer Healthcare from its Shreveport facility, Louisiana, which is set to have an impact of $25 million on net profits of the company in coming quarters, reports said.
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