Key benchmark indices edged lower in early trade as weakness in Asian stocks affected sentiment adversely. At 9:30 IST, the barometer index, the S&P BSE Sensex was down 100.16 points or 0.36% at 27,736.35. The Nifty 50 index was currently down 29.65 points or 0.34% at 8,585.60. Bank and IT stocks led losses on the bourses.
In overseas stock markets, most Asian stocks dropped as investors reacted to a slew of earnings at companies from Samsung Electronics to Nintendo. Data showed that profit growth in China's industrial firms slowed in September from the previous month's rapid pace as several sectors showed weak activity, suggesting the world's second-biggest economy remains underpowered despite emerging signs of stability. Profits in September rose 7.7% to 577.1 billion yuan, slowing sharply from August's 19.5% jump, according to data released by the National Bureau of Statistics (NBS). US stocks edged lower yesterday, 26 October 2016 as health care companies fell and Apple pulled technology companies down.
Closer home, the market breadth indicating the overall health of the market was negative. On BSE, 741 shares fell and 672 shares rose. A total of 71 shares were unchanged. The BSE Mid-Cap index was currently down 0.52%. The decline in this index was higher than the Sensex's decline in percentage terms. The BSE Small-Cap index was currently down 0.09%. The decline in this index was lower than the Sensex's decline in percentage terms.
Hindustan Unilever's (HUL) shed 0.46% after the company announced Q2 results. The company's net profit rose 11.54% to Rs 1095.60 crore on 2.22% growth in total income to Rs 8733.09 crore in Q2 September 2016 over Q2 September 2015. The result was announced after market hours yesterday, 26 October 2016. During the quarter, in a challenging context where market growth continued to be under pressure, HUL's domestic consumer business grew at 2% and EBITDA (earnings before interest, taxation, depreciation and amortization) margin expanded by 60 basis points (bps), the company said. HUL's profit after tax before exceptional items, PAT (bei) grew by 9% to Rs 1082 crore in Q2 September 2016 over Q2 September 2015. Harish Manwani, Chairman of HUL commented that in challenging market conditions, the company delivered another quarter of profitable growth. The company remains focused on market development, consumer led innovations and an even sharper drive on operating efficiences. With a good monsoon, the company expects a gradual improvement in market demand and remain positive on the mid-long term outlook for the industry, Manwani said. HUL's strategic agenda of delivering consistent, competitive, profitable and responsible growth remains unchanged, he added.
Hero MotoCorp rose 0.38% after net profit rose 27.74% to Rs 1004.22 crore on 15.33% increase in total income to Rs 8601.10 crore in Q2 September 2016 over Q2 September 2015. The result was announced after market hours yesterday, 26 October 2016. Earnings before interest, taxes, depreciation and amortization (EBITDA) margin improved to its highest-ever 16.20% in Q2 September 2016, as against 14.91% in Q2 September 2015 aided by softer commodities and cost control measures.
Pawan Munjal, Chairman, Managing Director & Chief Executive Officer, Hero MotoCorp, said the highest-ever volume sales during the quarter is a reiteration of the overwhelming customer preference of the company's products. At the same time, the company has also delivered on its commitment of further strengthening its profitability by crossing the threshold Rs 1000 crore in PAT for the first time in a quarter. The domestic market has seen a revival in the past two quarters due to an above-average monsoon and positive consumer sentiment. The trend is expected to continue through the year and likely to result in double-digit growth for the industry. In the global markets, however, the industry continues to face headwinds due to volatile business environment driven by continued weakness in crude prices and sharp depreciation of local currencies.
Meanwhile, in a separate announcement, Hero MotoCorp said that its board of directors approved an investment of up to Rs 205 crore, in one or more tranches, for approximately 26-30% shareholding in Ather Energy. Ather is a Bangalore-based technology start-up engaged in the business of designing and manufacturing smart Electric Vehicles (EV) and associated charging infrastructure. The said strategic investment is subject to execution of definitive agreements and completion of certain conditions customary for a transaction of this nature.
As the market leader and a global automotive major, Hero MotoCorp takes the lead in many areas that benefit the environment, customer and the industry. Adoption of environment-friendly fuel is a priority for Hero MotoCorp, as is propagating sustainable manufacturing through green facilities. Hero MotoCorp intends to enhance its participation in the EV space by pursuing its internal EV program in addition to partnering with Ather.
Maruti Suzuki India rose 0.35% ahead of its Q2 results today, 27 October 2016. ONGC gained 0.64% ahead of its Q2 results today, 27 October 2016. Tech Mahindra fell 0.07% ahead of its Q2 results today, 27 October 2016.
Sun Pharmaceutical Industries shed 0.06%. The company announced after market hours yesterday, 26 October 2016, the execution of definitive agreements by its wholly owned subsidiary for the acquisition of 100% of Ocular Technologies, Sarl (OTS), a portfolio company of Auven Therapeutics (Auven), an international private equity company focused on accelerated development of breakthrough therapeutic drugs. OTS owns exclusive, worldwide rights to Seciera (cyclosporine A, 0.09% ophthalmic solution). Sun Pharma will pay Auven $40 million upfront, plus contingent development milestones and sales milestones as well as tiered royalty on sales of Seciera as consideration for this acquisition.
Seciera is currently in a Phase-3 confirmatory clinical trial for the treatment of Dry Eye Disease, an inflammatory ocular disease affecting approximately 16 million people in the United States alone. Seciera is a patented, novel, proprietary formulation of cyclosporine A 0.09%. It is a clear, preservative-free, aqueous solution. In a completed Phase 2b/3 clinical trial in 455 patients, Seciera demonstrated a rapid onset of action and was well tolerated by the study population. Based on the published data in literature, the efficacy and safety endpoints in these trials compared favorably to other formulations of cyclosporine A.
The transaction is subject to approval of the US Federal Trade Commission as required under the Hart-ScottRodino Act and other closing conditions, and is expected to be completed by end of 2016.
Separately, Sun Pharma announced before market hours today, 27 October 2016 that its wholly owned subsidiary has launched in US, the Authorized Generic (AG) versions for all strengths of Olmesartan Medoxomil tablets - therapeutic equivalent of Daiichi Sankyo Inc.'s Benicar (olmesartan medoxomil) tablets; Olmesartan Medoxomil-Hydrochlorothiazide tablets - therapeutic equivalent of Daiichi Sankyo Inc.'s Benicar HCT (olmesartan medoxomil-hydrochlorothiazide) tablets; Amlodipine Besylate-Olmesartan Medoxomil tablets - therapeutic equivalent of Daiichi Sankyo Inc.'s Azor (amlodipine and olmesartan medoxomil) tablets; and Amlodipine Besylate-Hydrochlorothiazide-Olmesartan Medoxomil tablets - therapeutic equivalent of Daiichi Sankyo Inc.'s Tribenzor (olmesartan medoxomil, amlodipine, hydrochlorothiazide) tablets.
The launch is pursuant to a distribution and supply agreement between Sun Pharma's wholly owned subsidiary and Daiichi Sankyo Inc., which grants the Sun Pharma subsidiary, exclusive rights to distribute these tablets in the US for a pre-determined period. Benicar, Benicar HCT, Azor and Tribenzor recorded US sales of approximately $2.5 billion for the 12 months ending 31 August 2016, as per IMS Health.
State Bank of India (SBI) dropped 1.04%. The bank announced after market hours yesterday, 26 October 2016, that a meeting of the central board of the bank is scheduled to be held on 29 October 2016 to consider raising of equity share capital through preferential issue of equity shares to the Government of India.
HCL Technologies declined 1.78% as the stock turned ex-dividend today, 27 October 2016, for interim dividend of Rs 6 per share for the year ending 31 March 2017 (FY 2017).
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