Banking, auto aid in cutting losses

Fri, 11 Feb 01:30 pm

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After trading in the red for most part of the post noon trading session, the Indian markets inched towards the dotted line during the previous hour of trade. Stocks from the auto, banking and consumer durables sectors are leading the pack of gainers, while those from the metal and IT sectors are trading weak.

The BSE-Sensex is currently trading lower by 15 points, while the NSE-Nifty is trading higher by about 3 points. Stocks from the mid and smallcap spaces continue to find some favour today as the BSE Midcap and BSE Small cap indices are both up by 0.5% and 0.7% respectively. The rupee is trading at 45.66 to the US dollar.

<>Honeywell Automation announced quarterly and yearly results recently (December ending company). During the quarter ended December 2010, the company's revenues grew by 19% YoY, while profits declined by 26% YoY. At the operating level, the company's profits declined by about 4% YoY as expenses increased at a fast pace (as compared to the revenues growth) of 23% YoY. The company's operating margins stood at 11.9% as compared to 14.8% during the corresponding quarter last year. Lower other income, and higher depreciation and tax charges led to the sharp decline in profits during the quarter. As for the full year CY10 results, the company's revenues increased by 15% YoY, while profits declined by 21% YoY. The key reason for the same was a poor operating performance as margins fell to 10.6% as compared to 16% during CY09. The company has recommended dividend of Rs 10 per share for approval of shareholders. This translates to a dividend yield of about 0.5%.

The IIP numbers for the month of December 2010 have been announced. Industrial growth slowed to a marginal 1.6% YoY during the month. The growth stood at 18% YoY during the same period in the preceding year. This lower IIP number were mainly due to the poor performance of the manufacturing sector which grew by a meagre 1.9% YoY against a robust 19.6% YoY growth a year ago. The production of consumer non-durables dropped by 1.1% YoY during the month. The mining and capital goods sector also declined by 3.8% YoY 13.7% YoY respectively. However, electricity generation expanded by 6% during the month of December 2010. Industrial growth during the April to December 2010 period stood at 8.6%, unchanged in comparison to the corresponding period of the previous year.