Nifty in tight range; Wipro down 3%

• NSE Nifty continues to remain in a narrow range between 5,855 and 5,880 for over two hours. It currently trades at 5,862, down 5.65 points over its previous day close. BSE Sensex trades at 19,561 up by 15 points.

• Wipro, post its results, has been one of the worst performing frontline stock, down 2.79% at Rs 451. Alsthom Projects (APIL), despite a denial by the company on its de-listing, is up by 3.50% at Rs 654.30 and is the biggest gainer so far. This is despite the fact that all the other major stocks like L&T (down 0.62%), BHEL (down 1.46%) are trading below yesterday’s close.

• Aventis Pharma touched an all time high yesterday, immediately on announcement of its results. However, analyst are not too optimist given the high valuations on which the stocks are traded.

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• IDFC Securities in its reports on the company has maintained a Neutral rating for the company. Net profit declared by Aventis for the March quarter was Rs 50.6 crore as compared to the estimate of IDFC of Rs 38.1 crore. The differene was largely due to higher-than-expected operating profit (profit after all expenditure but before depreciation, interest and tax). Operating margins (operating profits/sales) posted by the company were 21.6% against the broking firm’s estimate of 18.8%. However, the worrying factor is that the domestic formulation (branded products) business of the company has had subdued growth of only 12.6%, while export growth has been flat. The current high valuations of 24 times the profits of FY2012 is on the higher side according to the report. The stock currently trades at Rs 2,025 after touching an all time high of Rs 2,116 on Tuesday.

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• High valuations seem to be the problem with a number of stocks. In spite of a good set of numbers by Ambuja Cements, Kotak Securities maintained its ‘Sell’ rating on the company. Ambuja Cements reported sales of Rs 2222.47 crore and a net profit of Rs 407.48 crore for the quarter ended March 2011. Ambuja Cements’ profitability improved by Rs 1,084/tonne, driven by price hike of Rs 40-50/bag across the country. Kotak, however, is cautious on the overall macro environment as rising input costs and sluggish demand growth could further dent a fragile demand-supply environment. Ambuja Cements continues to be a sell recommendation by Kotak Securitites, however, they have revised the price target to Rs 145 from its earlier target of Rs 130. Ambuja currently trades at Rs 153, down by 2.69% over previous close.

• Asian markets continue to trade higher. Shanghai is up 0.17%, Hang Seng by 0.41 while the Nikkei is the strongest, trading 1.34% higher than yesterday close.