Banking, metal and pharma sector stocks led modest losses for key benchmark indices. The barometer index, the S&P BSE Sensex dropped 254.91 points or 0.91% to settle at 27,836.51. The Nifty 50 index shed 76.05 points or 0.88% to settle at 8,615.25. The Sensex settled below the psychological 28,000 mark after falling below that mark in intraday trade. Key indices dropped for the second day in a row today, 26 October 2016. The Sensex and the Nifty hit their lowest closing level in more than a week. Weakness in global stocks weighed on sentiment on the domestic bourses.
Axis Bank slumped after reporting poor Q2 results. Cigarette manufacturer ITC edged higher in volatile trade after reporting good Q2 results. Bharti Airtel shruged off weak Q2 earnings. HDFC dropped after announcing Q2 results.
In overseas stock markets, European and Asian stocks edged lower tracking decline in oil prices. US stocks closed modestly lower yesterday, 25 October 2016 amid mixed earnings and slide in oil prices.
The Sensex dropped 254.91 points or 0.91% to settle at 27,836.51, its lowest closing level since 17 October 2016. The index lost 40.87 points or 0.14% at the day's high of 28,050.55. The index lost 331.86 points or 1.18% at the day's low of 27,759.56.
The Nifty shed 76.05 points or 0.88% to settle at 8,615.25, its lowest closing level since 17 October 2016. The index fell 34 points or 0.39% at the day's high of 8,657.30. The index lost 94.70 points or 1.08% at the day's low of 8,596.60.
The BSE Mid-Cap index lost 0.9%. The BSE Small-Cap index fell 0.66%. The losses for both these indices were lower than Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was negative. On BSE, 1,593 shares declined and 1,179 shares rose. A total of 242 shares were unchanged.
The total turnover on BSE amounted to Rs 3580.53 crore, higher than turnover of Rs 2987.80 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Healthcare index (down 1.12%), the BSE Bankex index (down 1.89%), the BSE Metal index (down 1.37%) and the BSE Power index (down 0.93%) underperformed the Sensex. The BSE Telecom index (up 0.83%) and the BSE Auto index (down 0.64%) outperformed the Sensex.
Bank stocks edged lower. Among public sector banks, Canara Bank (down 2.87%), Union Bank of India (down 2.23%), Indian Bank (down 1.89%), Punjab National Bank (down 1.61%), Bank of Baroda (down 1.08%) and Bank of India (down 0.09%) declined.
State Bank of India (SBI) was down 0.86%. The bank said after market hours yesterday, 25 October 2016 that it has issued and allotted 25,000 additional tier-1 (AT1) Basel III compliant non-convertible, perpetual, subordinated, unsecured debt instrument in the nature of debenture, of face value Rs 10 lakh each at par through private placement bearing coupon at 8.39% per annum payable annually with call option after 5 years or any coupon payment date thereafter aggregating to Rs 2500 crore in third tranche.
Among private sector banks, ICICI Bank (down 3.65%), Yes Bank (down 1.46%), HDFC Bank (down 0.8%) and IndusInd Bank (down 0.54%) edged lower. Kotak Mahindra Bank (up 3.31%) and RBL Bank (up 2.35%) edged higher.
Axis Bank slumped 8.04% after net profit declined 83.34% to Rs 319.08 crore on 14.14% growth in total income to Rs 13698.77 crore in Q2 September 2016 over Q2 September 2015. The result was announced after market hours yesterday, 25 October 2016. Axis Bank's net interest income (NII) rose 11% to Rs 4514 crore in Q2 September 2016 over Q2 September 2015. The bank's provisions and contingencies jumped 412.28% to Rs 3622.74 crore in Q2 September 2016 over Q2 September 2015.
Axis Bank's gross non-performing assets (NPAs) stood at Rs 16378.65 crore as on 30 September 2016 as against Rs 9553.17 crore as on 30 June 2016 and Rs 4451.11 crore as on 30 September 2015. The ratio of gross NPAs to gross advances stood at 4.17% as on 30 September 2016 compared with 2.54% as on 30 June 2016 and 1.38% as on 30 September 2015. The ratio of net NPAs to net advances stood at 2.02% as on 30 September 2016 as against 1.08% as on 30 June 2016 and 0.48% as on 30 September 2015.
Pharma stocks declined. Cadila Healthcare (down 4.82%), Glenmark Pharmaceuticals (down 2.25%), Aurobindo Pharma (down 2.21%), Strides Shasun (down 2.18%), Wockhardt (down 1.79%), Cipla (down 1.37%), Sun Pharmaceutical Industries (down 1.1%), Lupin (down 1.06%), GlaxoSmithkline Pharmaceuticals (down 0.52%), Ipca Laboratories (down 0.52%), Alkem Laboratories (down 0.3%) and Divi's Laboratories (down 0.2%) edged lower. Dr Reddy's Laboratories (up 1.34%) edged higher.
Hindustan Unilever (HUL) was up 1.29%. 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 today, 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.
HDFC fell 0.29% after the announcement of Q2 results. The company's consolidated net profit rose 16.12% to Rs 2446.21 crore on 16.48% rise in total income to Rs 14526.69 crore in Q2 September 2016 over Q2 September 2015. The result was announced during market hours today, 26 October 2016. On a standalone basis, The company's net profit rose 13.83% to Rs 1826.50 crore on 9.19% increase in total income to Rs 8103.15 crore in Q2 September 2016 over Q2 September 2015.
Cigarette manufacturer ITC rose 0.06% in volatile trade after reporting good Q2 results. The company's net profit rose 10.5% to Rs 2500.03 crore on 8.36% rise in total income to Rs 14091.96 crore in Q2 September 2016 over Q2 September 2015. The result was announced during market hours today, 26 October 2016. ITC said that the company delivered steady performance in Q2 September 2016 despite a challenging operating environment marked by continuing pressure on legal cigarette industry volumes, increase in input cost and subdued demand conditions prevailing in the FMCG industry. Operating conditions in the hotels and paperboards, paper and packaging segment also remained subdued, ITC said.
Bharti Airtel rose 2.25% after consolidated net profit fell 4.9% to Rs 1461 crore on 3.4% rise in total revenues to Rs 24652 crore in Q2 September 2016 over Q2 September 2015. The result was announced after market hours yesterday, 25 October 2016. Bharti Airtel said the consolidated revenues grew 5.6% to Rs 24652 crore in Q2 September 2016 over Q2 September 2015, on an underlying basis (viz. adjusted for Africa divested operating units and tower assets sale). Consolidated revenue growth was muted by 3.3% on account of full quarter impact of Nigeria currency devaluation. Bharti Airtel's consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) rose 14.5% to Rs 9466 crore in Q2 September 2016 over Q2 September 2015. EBITDA margin was reported at 38.4% in Q2 September 2016, higher than 34.7% Q2 September 2015.
Gopal Vittal, MD and CEO, India & South Asia, said that the overall revenue momentum in India has been sustained during Q2 September 2016 with a growth of 10.1% Y-o-Y. This is primarily due to the strong performance of the company's non-mobile businesses which grew in aggregate at 18.8% Y-o-Y, albeit the company's mobile business has experienced a slowdown in growth due to free services being offered by a new operator.
In a separate announcement, Bharti Airtel announced that the board of directors of the company at its meeting held on 25 October 2016, has authorised a committee of directors to evaluate options for monetization of a significant stake in Bharti Infratel, in accordance with applicable regulations. The final outcome of this exercise will be placed before the board for approval, before any final decision is taken. Bharti Airtel has also requested Bharti Infratel to allow sharing of any information with any prospective buyer, subject to customary confidentiality arrangements. There is no certainty of any transaction until such time the board reviews and approves the final proposal. The announcement was made after market hours yesterday, 25 October 2016.
Bharti Infratel, India's leading telecom tower infrastructure provider, is a significant subsidiary of Bharti Airtel. Bharti Airtel has, in the past, divested stakes in Bharti Infratel to a clutch of private equity investors led by Temasek, KKR and other high quality investors in 2008. This was followed by an initial public offering (IPO) in the year 2012 and block sales in the stock market in 2014 and 2015. As on date Airtel holds 71.96% stake in Bharti Infratel.
Separately, Bharti announced during market hours today, 26 October 2016 that it launched an affordable 10 day validity pack for international roaming. The 10 day roaming pack starts at Rs 1199 ($19) for Singapore and Thailand offers unlimited free incoming calls, 2 GB data and 250 minutes of free calling to India and 100 free SMSes daily. A 10 day pack for US-Canada, UK is available for Rs 2,999 ($45).
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