India Markets Monday Wrap-Up: Late Buying Fuels Indices

by: Equitymaster

Indian stock markets languished in the red for the larger part of the trading session today on the back of relentless selling pressure across index heavyweights. However, the afternoon session saw buying activity picking pace. Sustained buying in the later hours ensured a positive close for the indices. While the BSE-Sensex closed higher by around 82 points (up 0.5%), the NSE-Nifty closed higher by around 27 points (up 0.5%). The BSE Mid cap and the BSE Small cap also notched gains of 0.5% and 0.3% respectively. Gains were largely seen in auto and metals stocks.

As regards global markets, Asian indices closed in the red today while European indices have also opened weak. The rupee was trading at Rs 52.93 to the dollar at the time of writing.

FMCG stocks closed mixed today. While P&G Hygiene and Dabur found favour, Godrej Consumer and Marico closed into the red. Marico announced results for the fourth quarter and year ended March 2012. Revenues increased by 22.8% YoY led by an underlying volume growth of 13%. All the three business divisions reported robust double-digit growth during the quarter. During FY12, topline grew by 28% YoY. Input cost pressures eased which enabled the company to overcome higher promotional spends and staff costs. EBIDTA margin expanded by 130 basis points during the quarter. However, operating margin for FY12 declined by 120 basis points. In 4QFY12, earnings were down by 2.7% as the year-ago results included extraordinary income of Rs 755 m as compared to exceptional loss of Rs 18 m in the current quarter. For FY12, the earnings increased by 10.5% backed by lower taxes and modest rise in depreciation and interest expenses.

Exide also announced results for the fourth quarter and year ended March 2012. The company recorded a 16% YoY growth in revenues during 4QFY12. Sales were largely led by higher volumes in the auto battery space. Volumes in the 4-wheeler and 2-wheeler segments increased by 7% YoY and 26% YoY respectively. The company's industrial battery segment reported a volume growth of 15% YoY. Exide's operating profits declined by 9% YoY during the quarter as costs increased by 22% YoY (as compared to a revenue growth of 16% YoY). The company's operating margins declined by 4.1% YoY on the back of higher raw material costs and other expenses. Exide's profits declined by 13% YoY on the back of a poor operating performance coupled with lower other income. Other income includes dividend from subsidiaries and investments. Higher depreciation charges also added to the woes. The stock closed higher.