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NIFTY analysis with experts, Performance review of Tile manufacturers, Indian markets couldn’t hold 10,900…. Market updates for 04/12/18

PurpleTrades - stock market courses > News > NIFTY analysis with experts, Performance review of Tile manufacturers, Indian markets couldn’t hold 10,900…. Market updates for 04/12/18

Report by- Sabyasachi Bhattacharya

 

Tile manufacturers Q2 review; Margin seems to be recovering –

Tile manufacturing companies are operating under intense competition, which along with an increase in natural gas costs is weighing down operating margins. The companies continued to report weak earnings for Q2FY19. But despite a tepid quarter, they remain hopeful of a demand recovery in the second half. Recent price hikes along with a steep correction in oil prices and strengthening of the rupee are expected to lend support to the operating margins. Listed players continue to face a tough operating environment amid increased competitive intensity from un-organised players. Besides, the sales during the quarter were also impacted by one-off events such as transporters strike in July and Kerala floods in August and September.

Taking into account the above factors, Kajaria’s volume growth came in strong at 11 percent. This was, however, aided by favourable base last year. Asian Granito’s 8 percent increase in volumes was primarily on account of a higher share from trading business. Somany Ceramics’ focus on improving receivables along with production issues on account of gas supplies disruption impacted the business performance.

Revenue growth for all the players lagged volume growth due to a drop in price realizations. Addition of new tile plants in the Morbi region in the recent past has resulted in increased supply amid subdued market demand and is putting constant pressure on realizations. While the cost of raw materials remained largely stable, operating margins for all the players came in lower as the natural gas prices (linked to crude oil and rupee-dollar rate) have risen sharply. Natural gas has seen a steep rise in the past one year and this has been the primary reason for the significant dip in operating margins of all the industry players. The input costs are expected to remain high for the next 2 quarters as natural gas prices have seen a further revision of around 10 percent from October.

Source- MoneyControl, Purple Trades Research Department 

 

 

 

Indian Indices remained flat as it broke it’s winning streak-

Chart source- ChartInk

Indian markets had a mixed day today as major Index Nifty remained at the same level as yesterday. As you can see on the chart Nifty had a GAP-DOWN opening today. It basically had an open equals to high opening which led to the fall if the Index today. After falling it encountered a support at the levels of 10,870. After which the Index started gaining throughout the end of the day on a trend line basis as seen on the chart above. At the end of the day shares have closed lower, amid caution ahead of RBI’s monetary policy committee meeting outcome on Wednesday. Uncertainty over US-China trade truce has also weighed on indices. Among sectors, weakness was visible among automobiles, banks, consumption and infrastructure names, while IT and pharma index ended in the green. The Nifty Midcap index was lower by around one-third of a percent. At the close of market hours, the Sensex closed down 106.69 points or 0.29% at 36134.31, while the Nifty was lower by 14.30 points or 0.13% at 10869.50. The market breadth is negative as 1154 shares advanced, against a decline of 1393 shares, while 143 shares were unchanged. ONGC, Wipro, and BPCL were the top gainers, while Sun Pharma and M&M lost the most.

 

 

 

Let’s take a look at the performance of major Indices-

Global markets moved downwards as NASDAQ was seen in the RED along with FTSE, DAX, CAC. Asian Markets were also in the RED as NIKKEI was seen in the RED.

Source- MoneyControl, Purple Trades Research Department 

 

 

 

 

Key Points for Traders to watch out for while trading Nifty tomorrow-

  • 10,900 is a short term support for Nifty.
  • If Nifty breaks 10,900 then it has the potential to go down.
  • 10,924 is a short term resistance for Nifty.
  • If Nifty breaks 10,924 then it has the potential to go up.

 

 

Top sectors that moved the market today- Data source- Moneycontrol

 

 

Top Gainers for today-   Data source- Moneycontrol

 

 

Top losers for today- Data source- Moneycontrol

 

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