Indian indices plummeted sharply during the previous two hours as profit booking in heavyweights instensified. All sectoral indices are in the red with stocks from the IT and banking space leading the losses.
The BSE-Sensex is down by 321 points while NSE-Nifty is trading 102 points below the dotted line. Both BSE Midcap and BSE Small cap index are also trading lower by 0.58% and 0.15% respectively. The rupee is trading at 45.13 to the US dollar.
IT stocks are trading weak with Infosys being the biggest loser. IT services major Infosys has announced its 3QFY11 consolidated results. The company has reported a 2.3% QoQ growth in its sales and a growth of 2.5% QoQ in its net profit. Operating margins remained flat at 30.2% as compared to the previous quarter.
On an overall basis, the growth in sales was owing to higher volumes (man-hours billed) during the quarter. The company added 40 new clients during the quarter taking the total number of active clients to 612. Utilization rates declined to 72.6% during the quarter as compared to 74.3% during the previous quarter. This was mainly on account of larger number of trainees during the quarter. The company continued its hiring spree during the current quarter as well. However, the attrition rate continued to remain high. It stood at 17.5% at the end of the third quarter, as compared to 17.1% at the end of the preceding quarter.
Stocks of capital goods companies are trading weak led by Praj Industries, Triveni Engineering and Areva T&D. After ending higher by 13% yesterday, the stock of wind turbine manufacturer Suzlon is trading marginally lower today. Anyways, yesterday’s gains were on the back of the company announcing that the Suzlon Group signing a memorandum of understanding (MoU) with the Government of Gujarat for developing 1,000 megawatt (MW) of new wind power capacity in the state. This project is expected to be done over a period of three years. This MoU was signed at the Vibrant Gujarat conference. No doubt, this is a massive order for the company. In fact, the past quarter was good for the company with the order inflow being about 400 MW during Q2FY11. Order backlog at the end of the quarter ended September 2010 stood at 693 MW (from the India business). At the end of Q2FY11, the group order book of Suzlon was at US$ 5.4 bn as compared to US$ 4.9 bn at the end of Q1FY11. However, execution will remain the key going forward. Suzlon is currently going through a rough phase on the back of poor market conditions, a factor that even led to it reporting losses at the operating level. Not to mention the huge debt that the company has piled up on its books.