Key benchmark indices trimmed initial gains in morning trade. The barometer index, the S&P BSE Sensex, was up 91 points or 0.44%, off 54.17 points from the day's high and up 13.41 points from the day's low. The market breadth, indicating the overall health of the market, was strong. Gains in Asian stocks underpinned sentiment on the domestic bourses.
Auto stocks edged higher. Shares of car major Maruti Suzuki India (MSIL) jumped, with the stock recovering from Tuesday's steep slide triggered by the company's decision to route the expansion project in Gujarat through a 100% subsidiary of Suzuki Motor Corporation, Japan. Bharti Airtel pared initial gains triggered by the company's strong Q3 results.
Key benchmark indices edged higher in early trade on firm Asian stocks. Key benchmark indices trimmed initial gains in morning trade.
Foreign institutional investors (FIIs) sold shares worth a net Rs 1267.35 crore on Tuesday, 28 January 2014, as per provisional data from the stock exchanges.
The market may remain volatile in the near future as traders roll over positions in the futures & options (F&O) segment from the near month January 2014 series to February 2014 series. The January 2014 F&O contracts expire tomorrow, 30 January 2014.
Asian stocks edged higher on Wednesday, 29 January 2014, after Turkey's central bank on Tuesday, 28 January 2014, more than doubled interest rates to arrest a currency slide that roiled global markets.
At 10:20 IST, the S&P BSE Sensex was up 91 points or 0.44% to 20,774.51. The index jumped 145.17 points at the day's high of 20,828.68 in early trade, its highest level since 27 January 2014. The index rose 77.59 points at the day's low of 20,761.10 in morning trade.
The CNX Nifty was up 30.10 points or 0.49% to 6,156.35. The index hit a high of 6,170.45 in intraday trade, its highest level since 27 January 2014. The index hit a low of 6,151.60 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,242 shares gained and 526 shares fell. A total of 96 shares were unchanged.
The total turnover on BSE amounted to Rs 372 crore by 10:15 IST, compared with Rs 87 crore by 09:20 IST.
Among the 30-share Sensex pack, 24 stocks gained and rest of them declined.
Sun Pharmaceutical Industries (up 2.76%), Bharat Heavy Electricals (Bhel) (up 1.89%) and AXIS Bank (up 1.15%) edged higher from the Sensex pack.
Auto stocks edged higher. Tata Motors advanced 1.18%. M&M rose 0.57%. Ashok Leyland rose 0.61%.
Two wheeler stocks also rose. Bajaj Auto (up 0.88%), Hero MotoCorp (up 0.72%) and TVS Motor Company (up 2.65%) gained.
Shares of car major Maruti Suzuki India (MSIL) jumped, with the stock recovering from Tuesday's steep slide triggered by the company's decision to route the expansion project in Gujarat through a 100% subsidiary of Suzuki Motor Corporation, Japan. The stock was up 6.23% at Rs 1,660.55. The stock hit a high of Rs 1,694.75 and low of Rs 1,606 so far during the day.
The board of directors of MSIL had, on 29 October 2011, approved the purchase of land in Mehsana district of Gujarat for further expansion of manufacturing facilities. Following this decision, MSIL acquired approximately 640 acres of land in Becharaji and approximately 550 acres in Vithalapur. The expansion of facilities was kept on hold due to market conditions.
MSIL on Tuesday said its board recently received a proposal from Suzuki Motor Corporation (SMC) for implementing the expansion project through a 100% Suzuki subsidiary. The Suzuki subsidiary would always remain a 100% Suzuki owned company, MSIL said. MSIL said its board, on Tuesday, 28 January 2014, decided that the time was now appropriate to expand production facilities in Gujarat. The board approved implementing the expansion through a 100% Suzuki subsidiary because it would result in substantial financial benefits to MSIL, and its minority shareholders, MSIL said in a statement. MSIL would enter into a contract with this subsidiary company under which all production in the subsidiary company would be in accordance with the requirements of MSIL, and the vehicles would be sold to MSIL. The Suzuki subsidiary would not sell vehicles to anybody else.
The price of the vehicles to MSIL would include only the cost of production actually incurred by the subsidiary plus just adequate cash (net of all tax) to cover incremental capital expenditure requirements. The return on this investment for SMC would be realized only through the growth and expansion of MSIL's business, the company said.
MSIL said that the company would financially benefit from the interest earnings resulting from not investing its money in this project directly. It would also benefit because the vehicles would be sold to MSIL by the Suzuki subsidiary without any return on capital employed. MSIL would be able to avoid all risk inherent in any investment. MSIL would also retain the option of investing its own funds for strengthening its marketing network, product development, R&D and any other opportunity of growth or building strength for market leadership.
MSIL would render all required assistance to the subsidiary company for implementing this project on an arms' length basis. The land for the project would be leased by MSIL to the subsidiary company to establish the production and related facilities. The rent would be determined on an arms' length basis, the company said.
MSIL's net profit rose 35.9% to Rs 681.10 crore on 3% fall in net sales (net of excise) to Rs 10619.70 crore in Q3 December 2013 over Q3 December 2012. The Q3 result was announced during market hours on Tuesday, 28 January 2014. Higher localization, favorable foreign exchange and cost reduction initiatives by the company contributed significantly to the growth in bottom line in Q3 December 2013, Maruti Suzuki India said.
Maruti said that the company's market share in domestic market stood 42.8% in Q3 December 2013, registering a gain of 2.5% from Q3 December 2012.
Bharti Airtel pared initial gains triggered by the company's strong Q3 results. The stock was up 0.7% at Rs 308.40. The stock hit a high of Rs 314.80 and low of Rs 301.25 so far during the day. As per International Financial Reporting Standards (IFRS), Bharti Airtel's consolidated net profit surged 115.1% to Rs 610 crore on 13.3% increase in total revenue to Rs 21939 crore in Q3 December 2013 over Q3 December 2012.
Bharti Airtel's consolidated mobile internet revenue surged 105.2% to Rs 1736 crore in Q3 December 2013 over Q3 December 2012, accounting for more than one-third of the overall incremental revenue.
The India business registered a revenue growth of 10.3% in Q3 December 2013 over Q3 December 2012 (Y-o-Y), with strong contribution from all segments. Mobile voice realisation in India improved by 1.96 paise (p) on a Y-o-Y basis (37.13p in Q3 December 2013 versus 35.17p in Q3 December 2012), and minutes grew by 5.9% Y-o-Y. Data customer base increased by 31.2% to 54.4 million customers and coupled with 54.4% increase in usage per customer, this led to 97% increase in total data traffic. Mobile ARPU has increased by Rs 9.7 to Rs 195. DTH revenue grew by 25.8% and airtel business grew by 13.9% Y-o-Y.
International revenue grew by 18.5% Y-o-Y in Indian rupee (INR) terms with Africa growing by 17.2% and South Asia by 44.8%. Net Revenue in Africa (after inter-connect costs and cost of goods sold) has grown by 21.6% Y-o-Y in INR terms. Africa revenue in US dollar terms grew by 4.1% on sequential quarter basis led by a strong 16.8% increase in Data revenues. Mobile voice pricing in Africa remained stable at 3.31 cents per minute, and overall ARPU improved to $5.8.
Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) at Rs 7093 crore grew by 22.8% Y-o-Y, with margin expanding to 32.3% from 29.8% from the corresponding quarter last year led by improved operational performance in India, which expanded EBITDA margin by 4.4% Y-o-Y.
Consolidated Operating Free Cash Flows for the quarter at Rs 4271 crore grew by 19.9% Y-o-Y.
The company's consolidated net debt has reduced to $9.313 billion resulting in the Net Debt to EBITDA ratio (LTM) improving to 2.06 times as compared to 2.2 times at the end of the previous quarter.
In a statement, Mr. Gopal Vittal, JMD and CEO, India Operations, Bharti Airtel, said: "Our efforts over the last 12 months to improve the quality of customer acquisitions have resulted in significant reduction in customer churn. Our focus on superior internet experience has resulted in increased data adoption and usage. Data is now a huge source of revenue growth".
Mr. Manoj Kohli, MD and CEO, International Operations, Bharti Airtel, said: "The International operations continued to achieve steady revenue growth. Africa had another quarter of strong growth from the 3G/Data and Airtel Money services across all its markets and we expect this trend to sustain due to large investments in brand & network. The market growth came back in Nigeria which is the largest telecom market in the continent".
Meanwhile, Bharti Airtel after market hours on Tuesday, 28 January 2014, said that the board of directors of the company at its meeting held on Tuesday, 28 January 2014 has approved the changes in its top management. Mr. Manoj Kohli will become Chairman of Bharti Airtel International (Netherlands) B.V. that owns telecom operations in Africa, relinquishing the position of Managing Director & CEO (International) in Bharti Airtel. Mr. Manoj Kohli will continue on the Board of Bharti Airtel as Non-executive Director.
Mr. Christian de Faria has been appointed as the Managing Director and CEO (Africa) of Bharti Airtel International (Netherlands) B.V. and will assume full operational responsibility of the company's operations across 17 African geographies. Mr. Gopal Vittal has been appointed as the Managing Director and CEO (India & South Asia) and will also be responsible for Bangladesh and Sri Lanka operations.
In the foreign exchange market, the rupee edged higher against the dollar tracking gains in the Asian currency markets after Turkey stunned investors with a huge hike in interest rates to support its currency lira. The partially convertible rupee was hovering at 62.14, compared with its close of 62.51/52 on Tuesday, 28 January 2014.
Turkey's central bank raised its repurchase rate to 10% from 4.5% and boosted other key borrowing costs at a late-night emergency meeting on Tuesday, 28 January 2014. The lira's slide to a record low coupled with Argentina's devaluation of the peso and concern over China's economy ignited a rout in world equity markets at the end of last week.
Asian stocks edged higher on Wednesday, 29 January 2014, after Turkey's central bank on Tuesday, 28 January 2014, more than doubled interest rates to arrest a currency slide that roiled global markets. Key benchmark indices in Hong Kong, China, Japan, Indonesia and South Korea rose by 0.31% to 2.1%. In Singapore, the Straits Times index fell 0.7%. Stock markets in Taiwan are closed untill 4 February 2014 for the Lunar New Year holiday.
Industrial output in South Korea increased 3.4 percent in December from November, the biggest gain since June 2009.
US stocks edged higher on Tuesday, 28 January 2014, as earnings at companies from Pfizer Inc. to D.R. Horton Inc. topped estimates.
The Conference Board's index of US consumer confidence rose to 80.7 in January from a revised 77.5 in December, the New York-based private research group said on Tuesday, 28 January 2014.
Federal Reserve officials have been scrutinizing US economic data to determine the timing and pace of reductions to asset purchases. The central bank, which concludes a two-day meeting today, 29 January 2014, decided at its December gathering to begin cutting its monthly bond buying by $10 billion to $75 billion.
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