After starting today's session on a positive note, Indian indices have gained further ground and are trading firm. However, other key Asian indices are trading mixed. Right now, heavyweights in the Sensex are trading strong with stocks from the banks and consumer durables space witnessing strong buying interest. However, oil & gas and healthcare stocks are trading flat.
Currently, the BSE-Sensex is trading up by around 158 points, while the NSE-Nifty is up by about 47 points. There has been some buying interest amongst the mid and small cap stocks as well with the BSE Midcap and BSE Small cap indices registering gains of 0.89% and 0.91% respectively.
Banking stocks are trading firm led by Indian Bank and SBI. SBI announced its 3QFY11 results recently. Net interest income grew by 44% YoY in 9mFY11 on the back of 22% YoY growth in advances. NIMs also improved from 2.6% in 9mFY10 to 3.4% in 9mFY11 led by robust growth in low cost deposit base (CASA). The improvement in NIMs was due to reduction in cost to income ratio which declined from 52% in 9mFY10 to 46% in 9mFY11 due to write back of employee cost provisioning. However, gross NPAs rose to 3.2% from 3.1% in 9mFY10. The capital adequacy ratio of the bank stood at 13.2% (as per Basel II) at the end of 9mFY11 with further capital raising scheduled in FY12.
FMCG stocks are trading mixed with Henkel India and Archies Ltd. trading firm, while Camlin Ltd and Dabur are trading weak. Godrej Consumer Products Limited (GCPL) released its 3QFY11 results. The company's top line grew by 90% YoY. This came on the back of strong performance by the company's international business (with a growth of 296% during the quarter) and the inclusion of 100% of Godrej Household Products Limited's financials (49% the same quarter previous year). Operating margins of the company however fell by 2.1%. This was due to increase in raw material costs and other expenditure. Other expenditure was higher during the quarter as a result of higher sales promotion expense. GCPL's bottom line increased by 40% YoY. This was due to fall in other income and higher interest expense. Interest expense was higher due to servicing of debt raised by the company to finance its acquisitions.