The S&P BSE 500 index hit a 52-week low of 13,409, down 1.3% on the BSE on Tuesday after a sharp decline in consumer discretionary goods & services, infrastructure, information technology (IT), cement, pharmaceutical and financial sector stocks. The index has fallen below its previous low of 13,453.81 touched on October 11, 2018, in intra-day trade.
With today’s decline, the S&P BSE 500 index has fallen 16% from its all-time high level of 15,938 recorded on September 3, 2018, as the cement, paints and auto ancillaries companies reported a weak set of numbers for the quarter ended September.
Total 65 stocks from the index, including Tata Motors, UltraTech Cement, Shree Cement, Piramal Enterprises, Grasim Industries, Container Corporation and Bharat Forge were hitting their respective 52-week lows on Tuesday.
Kansai Nerolac Paints, Dilip Buildcon, Just Dial, PC Jeweller, Hexaware Technologies, Sadbhav Engineering, Zensar Technologies, Sonata Software, Asian Paints, NLC India, Biocon, Apollo Tyres, Greaves Cotton and Aegis Logistics have fallen more than 6% each today.
Shares of paint companies lost sheen, by falling up to 12% for the second day in a row after Asian Paints and Kansai Nerolac Paints reported a weak set of numbers for the quarter ended September 2018 (Q2FY19).
Asian Paints slipped 7% to Rs 1,120 after the company reported a 3.8% year-on-year (Y-o-Y) decline in its consolidated net profit at Rs 5.06 billion in Q2FY19, due to higher input costs and lower volume growth. The company’s consolidated revenue from operations grew 8.5% to Rs 46.39 billion on Y-o-Y basis.
“The decorative paints business segment in India registered a low double-digit volume growth. Raw material prices continued to move up further, which has led us to take a price increase from October 2018,” said K.B.S. Anand, managing director and CEO of Asian Paints. The company has also seen a growth in automotive and industrial coatings.
Kansai Nerolac Paints hit a fresh 52-week low of Rs 343, down 12%, extending its Monday’s 6% fall; after the company posted a 15.6% Y-o-Y decline in its net profit at Rs 1.22 billion in Q2FY19. Net sales of the company, however, grew 10.7% Y-o-Y at Rs 12.86 billion during the quarter. EBIDTA (earnings before interest, tax, depreciation, and amortization) was Rs 1.95 billion down by 11.9% over the same quarter of the previous year.
The company said factors like GST rate changes in July leading to destocking by dealers, lingering monsoons over many parts of India and a delayed festival season affected demand for both decorative and industrial customers. The company expects the growth momentum to be good in decorative but subdued for industrial in the near future. It is hoped that the rupee and crude oil will stabilize at the current levels. Any adverse change will put further pressure on margins.
UltraTech Cement, Shree Cement, India Cements, Dalmia Bharat and Ramco Cement from the cement sector hit 52-week lows after ACC and UltraTech Cement reported a weak set of numbers.
UltraTech Cement dipped 6% to Rs 3,264, extending its past three days 7.5% decline on the BSE. The cement major reported 11% Y-o-Y decline in its consolidated net profit at Rs 3.76 billion in September quarter (Q2FY19), due to higher operating cost.
“Domestic sales volumes jumped 21% over Q2FY18. However, rising energy and logistics cost coupled with rupee depreciation resulted in cost increasing by 14% as compared to Q2FY18, bringing down profits as compared to the previous year,” UltraTech Cement said in a statement.