Although the benchmark indices came off the day's lows during the closing hours, they still ended the day in the red. This is continuing with the negative trend seen last week. The BSE-Sensex closed lower by around 68 points (0.4%) whereas the NSE-Nifty had a better outing and was down only by around 6 points (down 0.1%). The BSE Midcap and BSE Small cap indices fared worse, declining 0.4% and 0.8% respectively.
While most Asian indices closed lower today (except China), European markets are also in the red currently. The rupee was poised at Rs 45.9 to the dollar at the time of writing.
Shriram Transport Finance declared its 3QFY11 results today. Its income from operations grew by 19% YoY in 3HFY11 (21% in 9mFY11) with a healthy growth in assets under management of 20%. Income from securitization grew over 3 times in the 9 month period. Net interest income surged 43% in 9mFY11 on the back of a benign increase in interest expense. Its net interest margins (on AUM) improved to 8.5%, from 7.1% 9mFY11, with lesser pressure on loan yields. Net profits grew by 46% YoY in 9mFY11. This was aided by robust growth in net interest income, and a jump in other income.
An exceptional item relating to 0.25% standard asset provisioning was provided on all outstanding standard assets - as per RBI guidelines. If not for this item normalized profits would have increased 55% YoY for 9mFY11 and 51% YoY for 3QFY11. The company also saw some improvement in credit quality with its net NPA ratio declining from 0.7% in 9mFY10 to 0.5% in 9mFY11. Despite a good set of numbers, the stock closed almost 2% lower for the day.
Healthcare stocks ended the day on a firm note with Dr. Reddy's, Opto Circuits and Ranbaxy leading the pack of gainers. However, closing lower by about 2.5%, the stock of Sun Pharmaceuticals was the top loser today. The stock was down on the back of the company's December 2010 quarter results failing to meet the market expectations. While the revenue growth came in at a strong 57% YoY during the quarter, the company's profits grew by a mere 3% YoY. The sharp increase in revenues was on the back of the inclusion of Taro's financials this quarter. At the operating level, the company took a hit as operating margins reduced by 8.6% YoY due to higher staff costs and other expenditure (as percentage of sales). In addition to a poor operating performance, higher depreciation and tax charges led to the marginal growth in profits.