Asian Paints surges on impressive Q4 results, Dr Reddy disappoints analysts

Indian Markets:

• As the weekly expiry day unfolded, the benchmark indices remained range-bound and settled with marginal changes, signaling a momentary respite from concerns over US inflation. 
• While most sectors traded in alignment with the benchmark, resulting in a relatively flat outcome, market participants were engaged in selective buying within the banking, financial, and FMCG sectors. 
• Notably, the market breadth leaned towards advancing stocks, largely driven by buying activity in the small-cap space.

Global Markets:

• Shares in Europe and Asia declined on Thursday. Chinas consumer price index rose 0.1% in April year-on-year, the slowest since early 2021. Month-on-month, prices declined by 0.1%. 
• US stock markets closed mixed on Wednesday on lower-than-expected growth in inflation in April. The US Consumer Price Index (CPI) increased 4.9% from April 2022 to April 2023, Bureau of Labor Statistics report showed on Wednesday. Thats just below the 5.0% forecast and under the year-over-year percent increase of 5.0% in March.
• The White House said in a statement on Wednesday that easing gas and food prices were providing some welcome breathing room for families at a time when the US economy and job market are strong.

Stocks in Spotlight:

• Following the release of its Q4 results, Dr. Reddy’s witnessed a notable decline of 7 percent in its stock price, reflecting market apprehension. While the drugmaker reported an impressive tenfold increase in net profit for the quarter, rising from Rs 87.5 crore to Rs 959.2 crore compared to the same period last year, it fell short of the estimated figure of Rs 1,093.6 crore as projected by analysts. This discrepancy between actual performance and market expectations, coupled with concerns raised by brokerages regarding the company’s growth path, has cast a shadow of caution over Dr. Reddy’s. 
• Hindalco Industries, witnessed a significant drop in its share price, closing nearly 4 percent lower, following disappointing Q4 numbers reported by its wholly owned subsidiary, Novelis. With Novelis accounting for over 60 percent of Hindalco’s overall revenue, the company’s lackluster performance had a notable impact. Novelis reported a 27 percent year-on-year decline in net income, amounting to $156 million, while net sales dipped by 9 percent to $4.4 billion for the fourth quarter. 
• Asian Paints, the renowned paint manufacturer, witnessed a notable surge of over 3 percent in its share price following the release of its Q4 financial results for FY23. Furthermore, revenue from operations reached Rs 8,787.34 crore, reflecting a solid 11 percent YoY increase. Analysts at Axis Securities, commended Asian Paints’ robust performance, attributing it to strong double-digit volume growth. The company’s EBITDA margins surpassed expectations, primarily driven by better-than-anticipated gross margin expansion, resulting from lower raw material prices. Asian Paints’ stellar Q4 results signify its ability to effectively navigate market dynamics and capitalize on favorable trends, positioning it for sustained growth in the future. 

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