Wipro slumps on high volume after guiding flat IT services revenue in Q1

Firm European shares helped Indian stocks recover from an intraday slide caused by global credit rating agency S&P cutting its outlook on India's long-term rating to negative from stable. Volatility was high as the 50-unit S&P CNX Nifty recovered after hitting its lowest level in nearly 4 weeks in early afternoon trade. The barometer index BSE Sensex trimmed losses after hitting its lowest level in more than one week. The Sensex lost 56 points or 0.33%, up close to 130 points from the day's low and off about 100 points from the day's high. Wipro tumbled over 7% after the company at the time of announcing its Q4 March 2012 results before market hours today said it expects revenue to remain flat sequentially in Q1 June 2012. Index heavyweight Reliance Industries (RIL) edged higher in volatile trade. Bank stocks were mixed. Realty stocks declined. Auto stocks were mostly higher, with bike major Hero MotoCorp hitting record high. The Sensex has declined 252.91 points or 1.45% so far in April 2012 (till 25 April 2012). The index has surged 1,696.37 points or 10.97% in calendar 2012 so far (till 25 April 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 2,015.43 points or 13.31%. From a 52-week high of 19,633.63 on 27 April 2011, the Sensex has lost 2,482.34 points or 12.64%. Global crediting rating agency S&P today, 25 April 2012, revised its outlook on India's long-term rating to negative from stable, citing a slowdown in investment and economic growth and a widening in the current account deficit. This has resulted in a weaker medium-term credit outlook, the rating agency said. S&P affirmed its 'BBB-' long-term and 'A-3' short-term sovereign credit ratings on India. The negative outlook signals at least a one-in-three likelihood of the downgrade of India's sovereign ratings within the next 24 months, S&P said. High fiscal deficit and a heavy debt burden remain the most significant constraints on India's sovereign ratings, S&P said. Finance Minister Pranab Mukherjee said there was "no need for panic" after the rating agency Standard & Poor's downgraded the country's outlook from stable to negative on Wednesday. India is likely to pass some financial reforms in the current session of parliament, which started on Monday, he added. Coming back to stocks, the market regained positive terrain after slipping into the red after a higher start. The market trimmed intraday gains in morning trade. The market once again slipped into the red in mid-morning trade. The market hit fresh intraday low in early afternoon trade after news of S&P cutting its outlook on India's long-term rating to negative from stable hit the market at about 12:00 IST. The market trimmed losses amid high volatility later. The market may remain volatile tomorrow as traders roll over positions from the near-month April 2012 series to May 2012 series. The April 2012 derivatives contracts expire tomorrow, 26 April 2012. The BSE Sensex shed 56 points or 0.33% to settle at 17,151.29, its lowest closing level since 23 April 2012. The index fell 188.05 points at the day's low of 17,019.24 in early afternoon trade, its lowest level since 16 April 2012. The index rose 42.32 points at the day's high of 17,249.61 in early trade, its highest level since 23 April 2012. The S&P CNX Nifty lost 20.65 points or 0.4% to settle at 5,202, its lowest closing level since 23 April 2012. The Nifty hit a low of 5,160.65 in intraday trade, its lowest level since 29 March 2012. The Nifty hit a high of 5,236.10 in intraday trade, its highest level since 23 April 2012. The BSE Mid-Cap index fell 0.55% and the BSE Small-Cap index declined 0.53%. Both these indices underperformed the Sensex. BSE clocked turnover of Rs 2068 crore, lower than Rs 2308.53 crore on Tuesday, 24 April 2012. The market breadth, indicating the overall health of the market, was negative. On BSE, 1,444 shares declined and 972 shares rose. A total of 436 shares were unchanged. From the 30-share Sensex pack, 15 rose while the rest fell. Index heavyweight Reliance Industries (RIL) rose 0.22% to Rs 736.35. The stock hit a high of Rs 742.90 and a low of Rs 728. RIL after market hours on Friday, 20 April 2012, reported 21.2% fall in net profit to Rs 4236 crore on 16.7% growth in turnover to Rs 87833 crore in Q4 March 2012 over Q4 March 2011. The company reported GRM (gross refining margin), the difference between the price of petroleum products and crude oil, of $7.6 per barrel in Q4 March 2012 compared with GRM of $6.8 per barrel in Q3 December 2011 and $9.2 per barrel in Q4 March 2011. India's third largest software services exporter by revenues Wipro tumbled 7.29% after the company at the time of announcing its Q4 March 2012 results before market hours today said it expects revenue to remain flat sequentially in Q1 June 2012. The company has projected a between 1.04% fall to 0.91% growth in revenue from IT services business at $1.52 billion to $1.55 billion in Q1 June 2012 over Q4 March 2012. The Wipro stock fell on high volumes. On BSE, 10.19 lakh shares changed hands in the counter, compared with average daily volume of 81,370 shares in the past one quarter. Wipro's consolidated net profit as per International Financial Reporting Standards (IFRS) rose 8% to Rs 1481 crore on 19% growth in total revenue to Rs 9869 crore in Q4 March 2012 over Q4 March 2011. Azim Premji, Chairman of Wipro, commenting on the results for Q4 March 2012 and year ended March 2012 (FY 2012) said, "Corporations globally are focused on leveraging technology to drive revenues and productivity. Our strategy is aligned to deliver value to our customers by partnering with them in this journey." Suresh Senapaty, Executive Director & Chief Financial Officer of Wipro, said, "Our focus on operations helped improve revenue productivity and deliver strong cash flows in a volatile environment." T K Kurien, Executive Director & Chief Executive Officer, IT Business, Wipro said, "We have delivered revenues in line with our guidance in an uncertain environment. Our restructuring journey started with us positioning the customer at the center of all our efforts. We have seen progress with customer satisfaction scores going up in each of the last 4 quarters and we have created better value for our clients, with 7 customers contributing more than $100 million in revenues." India's second largest software services exporter by revenue, Infosys was flat. The stock had witnessed selling pressure recently on reports the company is under scrutiny from US authorities for likely errors in employer eligibility documents of its staff. Infosys has issued a weaker-than-expected revenue growth outlook for the current fiscal year. Infosys early this week unveiled Infosys BrandEdge in partnership with Fabric, a WPP company. This first-of-its-kind comprehensive cloud-based offering simplifies digital marketing by bringing together integrated marketing and technology expertise on a single unified platform, Infosys said. It transforms the full spectrum of digital marketing activities including creation and management of digital properties, data management, coordination with multiple partners, and campaign execution. India's largest software services exporter by revenues Tata Consultancy Services (TCS) fell 1.92% on profit booking. The stock had jumped 12.84% on Tuesday after the firm after market hours on Monday reported 3.3% growth in consolidated net profit at Rs 2895 crore on 0.4% growth in revenue at Rs 13259 crore in Q4 March 2012 over Q3 December 2011. Net profit rose 15% to Rs 10413 crore on 31% growth in revenue at Rs 48894 crore in the year ended March 2012 (FY 2012) over the year ended March 2011 (FY 2011). With regard to the outlook for the year ending March 2013 (FY 2013), TCS' CEO and MD N Chandrasekaran said that the company is well prepared to achieve balanced growth across the industries and markets it operates in, given its holistic portfolio of services which are now achieving significant scale across markets. Meanwhile, Standard & Poor's Ratings Services said today that it had revised the rating outlooks on Infosys, TCS and Wipro to negative from stable. At the same time, it affirmed 'BBB+' long-term corporate credit ratings on these entities. The outlook revisions follow a similar action on the sovereign credit rating on India. S&P said its ratings on the Indian information technology companies reflect 'BBB+' transfer and convertibility (T&C) assessment of India. S&P said it could lower the ratings on these companies if it revises downward its T&C assessment. S&P added that it could lower its T&C assessment if it downgrades the sovereign credit rating of country. Power Finance Corporation (PFC) tumbled 4.59% after S&P revised its outlook on the state-run firm to negative from stable. S&P said it feels that the role of PFC in the power sector and in the entire economy is crucial. Therefore, there is an "extremely high" likelihood of extraordinary government support to the company. Such level of support, combined with PFC's stand-alone credit profile, results in a rating that is at the same level as the rating on India, said S&P. The rating agency has affirmed the rating BBB- for long term issues of PFC. Auto stocks were mostly higher. India's largest small car maker by sales Maruti Suzuki India rose 1.23%. Haryana Chief Minister Bhupinder Singh Hooda on Monday laid the foundation stone for Maruti's Research & Development Centre and Proving Ground at Rohtak in Haryana. The facility is spread over an area of 600 acres. Maruti Suzuki is expected to invest in the range of Rs 2000 to Rs 2400 crore to set up this world class R&D facility. India's largest commercial vehicle maker by sales Tata Motors rose 0.71% to Rs 313.85. The stock had hit a record high of Rs 320.60 on Friday, 20 April 2012. Tata Motors recently reported 26% rise in global vehicle sales to 1.39 lakh units in March 2012 over March 2011. Global sales of all commercial vehicles were reported at 63,791 units in March 2012, a growth of 12% over March 2011. India's largest tractor maker by sales Mahindra & Mahindra (M&M) declined 1.7%. The government reportedly approved the foreign direct investment (FDI) proposal worth of Rs 25.99 crore for company's radar systems. Two wheeler makers rose. The country's largest two-wheeler maker Hero MotoCorp rose 1.92% to Rs 2237.50. The stock hit a record high of Rs 2353 today. The country's second largest two-wheeler maker Bajaj Auto gained 0.41%. Shares of DLF fell 0.27%, with the stock extending two day losing streak after the Bombay Stock Exchange (BSE), last week, said that pharma major Dr Reddy's Laboratories will replace realty major DLF in the benchmark 30-share Sensex. The change will come into effect from 11 June 2012. Among other realty stocks, D B Realty, HDIL and Unitech dropped by between 1.03% to 4.53%. Bank stocks were mixed. India's second largest private sector bank in terms of net profit HDFC Bank rose 0.96% to Rs 546.90. The stock had struck a record high of Rs 557.70 on Friday, 20 April 2012. The bank's net profit rose 30.4% to Rs 1453.10 crore on 32.1% rise in total income to Rs 8880 crore in Q4 March 2012 over Q4 March 2011. The result was announced during market hours on 18 April 2012. India's largest bank by branch network State Bank of India fell 0.77%, with the stock reversing initial gains. The bank is cutting its loan rates for small and medium enterprises by 1.5 to 2 percentage points, Chairman Pratip Chaudhuri said on Tuesday, adding that the move would not squeeze bank's margins. The bank said during market hours on Monday that it has decided to revise its retail term deposit rates across various tenors, with reduction ranging from 0.25% to 1% with effect from 24 April 2012. India's largest private sector bank in terms of net profit, ICICI Bank, declined 1.04%. The bank announced during market hours on 19 April 2012 that it has reduced base rate by 0.25% with effect from 23 April 2012. The revised rate will be 9.75% from 10% earlier. The bank has also announced a reduction of 0.25% in its benchmark prime lending rate and floating reference rate (FRR) for consumer loans (including home loans) from 23 April 2012. Yes Bank rose 1.86% after the bank said during market hours today its net profit rose 33.64% to Rs 271.80 crore on 45.55% rise in total income to Rs 2051.45 crore in Q4 March 2012 over Q4 March 2011. LIC Housing Finance fell 0.04% after net profit fell 19.43% to Rs 253.60 crore on 21.34% growth in total income to Rs 1689.02 crore in Q4 March 2012 over Q4 March 2011. Metal stocks edged lower. JSW Steel, Tata Steel, Sail, Hindalco Industries, and Jindal Steel & Power fell by between 0.01% to 1.35%. LMEX, a gauge of six metals traded on the London Metal Exchange gained 1.09% on Tuesday, 24 April 2012. Sterlite Industries rose 1.89%. The company said after market hours today that its consolidated net profit fell 33.66% to Rs 1276.89 crore on 6.65% growth in total income to Rs 11522.41 crore in Q4 March 2012 over Q4 March 2011. Consequent to acquisition of zinc business at Namibia, South Africa and Ireland in the second half of the FY 2010-11, the results for the quarter reported and year ended 31 March 2012 are not strictly comparable with corresponding previous periods. Anil Agarwal, Chairman, Sterlite Industries (India) said, "Sterlite Industries delivered strong operating and financial performance during the year, despite macroeconomic headwinds. We continue to deliver on our growth projects, expanding and optimizing our assets to generate strong returns for our shareholders. The board has approved a dividend of Rs 2 share for FY 2012. Last quarter, we announced a merger of Sterlite with Sesa Goa, and simplification of the Vedanta Group structure. The merger process is well on track to create one of the world's largest natural resources major, and deliver significant long term value for shareholders." Iron ore miner, Sesa Goa rose 1.53%. The company announced after market hours on Tuesday that consolidated net profit fell 20.49% to Rs 1162.11 crore on 25.61% decline in total income to Rs 2808.48 crore in Q4 March 2012 over Q4 March 2011. Bharat Electronics rose 0.87%. The company said after market hours today that its net profit fell 25.52% to Rs 333.84 crore on 0.27% rise in total income to Rs 2444.44 crore in Q4 March 2012 over Q4 March 2011. The company said that the board of directors of the company at its meeting held on 25 April 2012 has deferred the proposal to consider buyback of shares. Ranbaxy Laboratories fell 1.8%. The company said after market hours today that it launched India's first new drug, Synriam, for the treatment of uncomplicated Plasmodium falciparum malaria, in adults. Dr Reddy's Laboratories rose 0.45% after the company said it has launched its generic version of Zyprexa tablets in the US market on 23 April 2012. Dr Reddy's Laboratories announced that it has launched Olanzapine tablets (2.5 milligram, or mg, 5 mg, 7.5 mg, 10mg, 15 mg), a bio-equivalent generic version of Zyprexa tablets in the US market on 23 April 2012, following the approval by the United States Food & Drug Administration (USFDA). Olanzapine tablets are indicated for the treatment of schizophrenia, bipolar I disorder (manic or mixed episodes). Dr Reddy said its Olanzapine tablets in 20 mg had been awarded a 180-day period of marketing exclusivity in the US on 26 October 2011,which was commercialised through a commercial, manufacture and supply agreement with Teva Pharmaceutical Industries. Most FMCG stocks extended recent gains after Farm Secretary P.K. Basu said on Monday that India is likely to have normal monsoon in 2012 and the government will give a detailed region-wise forecast today. ITC, Dabur India, Nestle India, and Marico rose by between 0.22% to 0.92%. Hindustan Unilever fell 0.26%. FMCG firms derive substantial sales from rural India. Good monsoon may boost farm incomes and consumer spending. India achieved a bumper farm output in 2011 largely because of sufficient monsoon rains. The June-September monsoon, vital for agricultural output and economic growth, irrigates around 60% of farms in India, the world's second-biggest producer of rice, wheat, sugar and cotton. Sugar stocks were mixed ahead of the meeting of Empowered Group of Ministers (EGoM) headed by finance minister Pranab Mukherjee today to discuss sugar exports as key agenda. Balrampur Chini Mills and Shree Renuka Sugars rose by between 1.97% to 2.82%. Bajaj Hindusthan and Triveni Engineering fell by between 0.68% to 0.69%. Coal India fell 1.81%. The company said that Mr. S Narsing Rao has assumed the charge of Chairman-cum-Managing Director of the company from 24 April 2012. Lanco Infratech clocked highest volume of 70.93 lakh shares on BSE. Acil Cotton Industries (52.75 lakh shares), SpiceJet (42.64 lakh shares), Kingfisher Airlines (36.67 lakh shares) and IVRCL (30.92 lakh shares) were the other volume toppers in that order. SBI clocked highest turnover of Rs 161.44 crore on BSE. Infosys (Rs 77.24 crore), United Spirits (Rs 57.38 crore), BF Utilities (Rs 52.24 crore) and L&T (Rs 50.61 crore) were the other turnover toppers in that order. Foreign institutional investors (FIIs) sold shares worth Rs 860.77 crore on Tuesday, 24 April 2012, as per provisional data from the stock exchanges. FIIs had sold shares worth Rs 407.49 crore on Monday, 23 April 2012. Investors are closely watching India Inc's Q4 March 2012 and year ending March 2012 (FY 2012) earnings. Focus is on the guidance provided by the management for the year ending March 2013 (FY 2013) to gauge the earnings outlook. ICICI Bank unveils FY 2012 results on 27 April 2012. Axis Bank, Jindal Steel & Power and Siemens unveil quarterly results on the same day. Maruti Suzuki India unveils FY 2012 results on 28 April 2012. FMCG giant Hindustan Unilever unveils FY 2012 results on 1 May 2012. Hero MotoCorp announces Q4 results on 2 May 2012. Bank of Baroda unveils Q4 results on 4 May 2012. Housing finance major HDFC announces FY 2012 results on 7 May 2012. Hindalco unveils Q4 results on 8 May 2012. Ranbaxy Laboratories will declare its Q1 March 2012 results on 9 May 2012. Dr Reddy's Laboratories announces FY 2012 results on 11 May 2012. Bajaj Auto announces FY 2012 results on 17 May 2012. BPCL unveils FY 2012 results on 25 May 2012. European stocks were trading higher on Wednesday, ahead of the US Federal Reserve rate decision. Key benchmark indices in UK, France and Germany were up by 0.22% to 1.76%. In economic news, data showed the UK economy slipped back into recession in the first three months of 2012, the second straight quarterly fall. First-quarter gross domestic product fell 0.2%. Asian stock markets were mixed on Wednesday. Key benchmark indices in Singapore, China, Japan and Taiwan rose by between 0.18% to 0.98%. Key benchmark indices in South Korea, Hong Kong and Indonesia fell by between 0.07% to 0.16%. Trading in US index futures indicated that the Dow could gain 69 points at the opening bell on Wednesday, 25 April 2012.