Monday 3 August 2015

Sensex Up 100pts, Nifty Above 8550; SBI, ICICI, Maruti Lead

Posted by suhani varma on Monday, August 03, 2015 with No comments
Two-wheeler maker Hero Motocorp's first quarter net profit is expected to increase 23 percent year-on-year to Rs 692.1 crore as the company does not have to pay quarterly royalty payment to Honda post June 2014. It will announce its earnings on August 3.

Revenue may see muted growth on lower sales volumes, rising 0.6 percent to Rs 7,081 crore from Rs 7,037 crore during the same period, according to average of estimates of analysts polled by CNBC-TV18. It may be supported by higher realisations that may rise 3.3 percent to Rs 42,167 per unit Y-o-Y. Sales volumes in Q1 declined 4 percent year-on-year to 16.45 lakh units on weak rural demand (which contributes 50 percent of Hero sales).

Operating profit earnings before interest, tax, depreciation and amortisation may fall 1.3 percent year-on-year to Rs 935 crore and margin may drop 20 basis points to 13.3 percent in June quarter due to lower operating leverage. However, fall in commodity costs and normalisation of advertising expenses may aid margin.

Nifty is likely to remain volatile in the short-term and trade in the 8000-8500 range, says Andrew Holland, CEO of Ambit Investment Advisors. However, he still sees Nifty at 11000 by December 2016. Despite the lacklustre performance this earnings season, Holland says he is seeing some greenshoorts. "Mid-to-small sized companies are seeing better order levels (pick-up).

 In the July-August-September period, you will see a lot more optimism from India Inc," he told CNBC-TV18. Globally, he believes the risk off environment is here to stay on the back of slowdown in China and the US employment number coming in weak. He feels that India is likely to be a relative outperformer since it is a net importer of commodities. However, he cautions that the markets can still fall. According to him, the market is taking the meltdown in China too lightly.

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