The indices in the Indian stock markets opened the day on a positive note after the market holiday yesterday. They however came off their day's highs midsession but eventually managed to recover from this level and closed the day well in the green. Thus, while Sensex edged higher by around 157 points, (up 0.9%) gains on the Nifty came in at around 46 points. BSE Mid Cap and Small Cap indices also had a strong performance, edging higher by 0.7% and 1.3% respectively. Stocks from the Oil and gas and consumer durables space were trading well in the green. Realty and FMCG stocks were however trading weak. Markets ended a short trading week over 3% higher.
Gains were also seen across most major Asian indices, however China still remained closed. European stocks are trading on a mixed note currently. The rupee was placed at Rs 49.31 to the dollar at the time of writing, jumping to an 11 week high on higher fund inflows.
Leading Knowledge Process Outsourcer (KPO), eClerx's sales grew by 16.0% QoQ during the third quarter of the financial year 2011-12. This came on the back of rupee depreciation and a 7% QoQ growth in revenues in constant currency terms. As regard to geographies, this growth was largely aided by a good growth in sales from the US market. The North American business (70% of net sales) grew by 25% QoQ during the quarter. The business from European markets (24% of net sales) witnessed a tepid growth of 7.0% QoQ growth during the quarter on account of the debt crisis in the region. The company's operating margins expanded by 6.3% QoQ to 45.2% during the quarter as against the 38.9% seen during the previous quarter (2QFY12). These were largely on account of lower employee costs and lower other expenditure (as percentage of net sales). Despite the huge expansion in operating margins, net profit grew by only 12.9% Q0Q during the quarter. These were on account of hedging losses as well as lower other income. For 9MFY12 however, net income increased by a robust 39.2% YoY. The company added 8 new clients during nine month period. The stock closed 0.3% higher.
Public sector bank, Union Bank of India recently declared its results for the third quarter and the 9 month period ended December 2011. The bank's net interest income grew by 10.2% YoY in 3QFY12, on the back of 16.8% YoY growth in advances. Its NIMs (net interest margins) moved down marginally from 3.3% in 9mFY11 to 3.2% in 9mFY12 despite increased lending yields. Incidentally the bank was the first bank to cut its base rate by 10 bps to 10.65% p.a. in anticipation of monetary easing from the central bank. This came into effect from December 26th 2011. The bank's Net NPAs move up sharply from 1.21% in 9mFY11 to 1.88% in 9mFY12. However sequentially this saw an improvement from 2.04% levels seen in 1HFY12. Net profit fell by a whopping by 66% YoY in 3QFY12 on account of increased provisioning especially on restructured assets. Profits fell it fell by around 32% in 9mFY12. The bank's capital adequacy ratio stands at 11.72% at the end of 3QFY12 as per Basel II. It has asked the government for a Rs 2.7 bn capital infusion which is expected by the end of March 2012. This will take the government's stake up 1% to 58%. The stock closed higher by over 4%.