Indian Markets Friday Wrap-Up: Good Quarterly Results Spur Stocks

Led by some decent results announced by Indian companies for the quarter ended June 2009, markets made a strong upsurge in today's trade. The BSE-Sensex ended higher by around 495 points, while the NSE-Nifty closed up by about 144 points. Stocks from the mid-cap and small-cap spaces ended strong as well, recording gains of 2.3% and 2.4% respectively.

Most of the other Asian markets ended the day on a positive note too. The European indices are also trading strong currently. Rupee was trading at 48.75 against the US dollar at the time of writing.

HCL Axon, a division of HCL Technologies is all set to acquire the SAP practice of South African software solutions firm, UCS Group. It will be an all-cash deal worth around US$ 7.7 m. This strategic alliance will expand HCL Axon's capabilities in the enterprise applications domain by leveraging UCS's retail and wholesale SAP implementations. Moreover, the deal will enable HCL to expand its footprint in South Africa. It is worth noting that lately HCL has been seeking foothold in the enterprise application services segment and acquired UK based SAP consulting firm, Axon in December 2008, for a consideration of Rs 31 bn. The stocks from IT space including HCL, closed the day in the positive, led by Infosys (INFY) and TCS.

Stocks from the capital goods sector ended the day on firm note led by BHEL and ABB. Crompton Greaves, which announced its 1QFY10 results today, also closed strong. The company has reported an 8% YoY increase in revenues during the quarter, led by its Power Systems business that grew by 9% YoY. Its unexecuted order backlog grew by just around 2% YoY. A significant decline in raw material cost from 62% of sales to 52% of sales in 1QFY10 led a 1% improvement in operating margins. The net profits of the company surged by 30% YoY backed by superior operating margins, higher other income and lower interest costs.

Late monsoon is expected to play spoilsport in India's recovery from the global slowdown. This is what the Center for Monitoring Indian Economy (CMIE) believes, as it has revised downwards its GDP growth estimates for Fy10 from 6.6% to 5.8%. Further, CMIE also believes that India's industrial production will grow by just around 4.8% in the current fiscal. The agency has lowered its estimates for industrial production from 5.1% to 4.8% based on poor expectations from the agricultural sector which will see significant reduction in the production of sugar, rice and edible oils. While the agro-based industries are feared to face supply pressures, non-agro based industries like cement, metal and automobile are expected to see capacity additions which will fuel the industrial production figures.