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Indices on recovery path
Mon, 31 Jan 01:30 pm

Indian indices continued to recover the losses that they started with early in the day. Currently, stocks from the capital goods and oil and gas space are heralding the recovery, while stocks from the IT, realty and FMCG space continue to trade weak.

The BSE-Sensex is down by 60 points, while NSE-Nifty is trading 8 points below the dotted line. BSE Midcap and BSE Small cap indices are both down by 0.59% and 0.92% respectively. The rupee is trading at 45.96 to the US dollar.

Engineering stocks are currently trading firm with Siemens, Bharat Bijlee and Kalpataru Power leading the pack of gainers. The stock of engineering major Crompton Greaves is trading firm on the back of it announcing good results for the quarter ended December 2010. The company’s consolidated revenues grew by 7% YoY during the quarter led by strong performance from the consumer products (30% YoY) and industrial systems (23% YoY) business. These businesses formed about 20% and 16% of the quarter’s revenues. Business in its largest contributing business (64%), the power systems division, remained flat. Crompton Greaves’ operating margins remained flat at 14.2% during the quarter. Net profits however, grew by 17% YoY as interest costs declined by 22% YoY. Further, lower tax outgo also helped the company at the bottomline level.

Banking stocks are currently trading firm with Canara bank, India Overseas Bank and UCO Bank leading with substantial gains. Corporation Bank declared its 3QFY11 results. The bank has reported a 41% YoY and 25% YoY growth in net interest income and net profits respectively. Net interest income grew by 44% YoY in 9mFY11 on the back of 27% YoY growth in advances. Other income fell by 17% YoY during 9mFY11 due to lower treasury gains. The bank’s NIM moved up to 2.6% in 9mFY11 with CASA funding being 24% of total deposits. The bank’s exposure to commercial real estate grew by 4% YoY in 9mFY11 and stood at 3.9% of total advances. The gross NPA has remained stable at 1.3%. However, at the net level NPAs came in marginally higher at 0.6% as against 0.5% in 9mFY10.

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