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Sensex, Nifty rangebound; banks FMCG gain, metals slip

12:00

The News International Team

12:55pm Eicher Motors sees huge expansion

Calendar year 2014 has been a dream year for the company, says Siddhartha Lal, MD and CEO, Eicher Motors. The company has grown six-fold in last five years. Brokerages are upgrading the stock after stellar a performance last quarter. The stock has doubled this year and hit record high of Rs 12,372 on September 16, 2014.

Macquarie sees a 4x rise in earnings on the back of Royal Enfield business growth this quarter. The Royal Enfield sales were up 85 percent year-on-year to 74000 units. The company reported EBIT growth of 67 percent aided by motorcycle business.

Reports suggest Eicher aims to dominate the mid-sized motorcycle market in the US, which is currently dominated by Harley Davidson. The US is USD 7 billion motorcycle market, if Eicher cracks it, margins could be much higher.

Speaking to CNBC-TV18, Lal says the order book of the company has been growing for its motorcycle segment. Eicher Motors has over 95 percent market share for above 250cc motorcycle space.

According to management, the company has a lot of room to grow and is creating ground for mid-size motorcycle segment globally. The company is looking for a 70-75 percent capacity expansion going ahead. 

12:35pm Europe rebounds

European markets like France’s CAC, Germany’s DAX and Britain’s FTSE gained around a percent in early trade.

12:30pm Interview

Two-wheeler maker Bajaj Auto eyes very strong exports for October and November. According to MD Rajiv Bajaj, in terms of sustainability, everything looks good right now. 
“October looks good in terms of what we are shipping out, orders of November look promising. But in the last quarter everything just went right whether it was Sri Lanka, Bangladesh, Egypt, Nigeria, Colombia, all these markets one or two of which always played truant,” he adds.

The company aims to recover its market share by June with the EBITDA margins maintained at 20 percent.

The overseas business of the company did well in Q2. Speaking to CNBC-TV18 post Q2 earnings, Bajaj says the company has entered Ghana and Argentina in recent months.

Bajaj Auto has planned two new launches over the next four months. The company expects its Pulsar to clock 60,000-65,000 units per month going ahead.

12:00pm Market Check

Equity benchmarks were not showing any sign of major move on either side. The Sensex fell 9.80 points to 26339.53 and the Nifty declined 9.05 points to 7854.95. Banking and financials, and FMCG stocks saw buying interest while metals, capital goods and power stocks were under pressure.

The market breadth was negative. About 1053 shares have advanced while 1417 shares declined on the Bombay Stock Exchange.

Shane Lee, Director, Economist & Strategist – Equity Research, CIMB is neutral on India. However, he adds that the Indian market has held up rather well. But he is waiting to see how things play out.

Shares of Hindustan Unilever, Gail, ITC, Tata Motors, Axis Bank, BPCL and NMDC climbed 1-4 percent whereas Hindalco Industries, Sesa Sterlite, Mahindra and Mahindra, Tata Power, Reliance Industries, UltraTech Cement and Cairn India slipped 1-4 percent.

In key earnings today, second quarter is expected to be a strong for TCS and Hero Motocorp. Dollar revenue of TCS may see a 7.3 percent sequential growth to USD 3,965 million with marginal improvement in margins while Hero may report a 43 percent growth in profit Y-o-Y.

In the midcap space, Cyient, Tilak Finance, Emami, DB Corp and Religare Enterprises gained 4-7 percent while Strides Arcolab, GSFC, Amtek Auto, Den Networks and Persistent Systems lost 5-16 percent.

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