The benchmark indices in the Indian stock market have held on to their gains and are still trading in the green. Stocks from Power and Auto space are trading weak, while those from Software, Oil & Gas and Telecom space are trading firm.
Steel stocks are trading mixed with SAIL, Sesa Goa and Tata Steel leading the pack of gainers. The stocks of MMTC Ltd and NMDC Ltd are trading in the red. As per a leading financial daily, Tata Steel, may increase its domestic steel manufacturing capacity by more than double from the current capacity of 7 mtpa. The company has expressed its plans to produce around 10 mt of steel from its Jamshedpur plant in the next 6 months. It is also expected to commence its Orissa operations soon which will produce around 6 mt over a period of next 5 years thus taking the total domestic production capacity to 16 mtpa over the next five years. While the current consumption of steel in the country is low, the domestic demand is healthy and hence strong order inflow is expected. However, due to high input costs of main raw materais- iron ore and coking coal, margins are expected to remain under pressure. The steel companies are wary of passing the increased costs to customers as this may lead to import from other countries at cheaper rates. The stock of Tata Steel is trading firm.
Most of the PSU banking stocks are trading mixed as well with IDBI Bank and UCO Bank leading the pack of gainers. However, Indian Bank and Andhra Bank are trading weak. IDBI bank announced its results today. For the fourth quarter ending March 11, the bottomline registered a year on year increase of 62%. The net profits for the fourth quarter of FY 11 came at Rs 5.2 bn. This compares to a bottomline of Rs 3.2 bn registered in the same period last year. The net interest income (NII) for the quarter stood at Rs 11.1 bn versus Rs 7.6 bn for the same period last year, thus registering a year on year a growth of 46%. The Board of Directors of the bank has also recommended a dividend of Rs 3.5 per share for FY 11. The stock of IDBI Bank is trading in the green.