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Markets lower ahead of RBI policy
Tue, 3 May 11:30 am

Indian stock market indices have been trading in the red on the back of selling pressure from heavyweights. Metals and banking stocks are the biggest gainers, while realty and consumer durables are not finding favour.

The BSE-Sensex is down by 73 points while NSE-Nifty is trading 21 points below yesterday's closing. BSE Midcap and BSE Small cap indices are trading flat. The rupee is trading at 44.37 to the US dollar.

Finance stocks are trading mixed with LIC Housing and Motilal Oswal leading the gains. However, Mahindra Finance and Cholamandalam Investments are trading weak. IDFC recently announced its fourth quarter and (4QFY11) and full year ended results for FY11. The company has reported rise in income from operations by 27% and 22% for the quarter and full year respectively. The topline numbers are Rs 13.02 bn and Rs 49.16 bn for the quarter and the full year. The growth in income from operations in FY11 is mainly on the back of 50% YoY growth in advances. Disbursements and approvals grew by 106% YoY and 40% YoY respectively. Company's taxes went up by 70% over the quarter last year and 36% over the last year. A fall was seen in the other income by 45% year on year. Higher taxes, increased provisioning and lower other income hurt profits for the financial company and IDFC reported net profit growth of 26% in 4QFY11 and 21% in FY11. It has declared a dividend of Rs 2 per share.

Food & Tobacco stocks are trading mixed with Tata Coffee and VST Industries trading firm while GSK Consumer and Lakshmi Energy is trading weak. GSK Consumer released its 1QCY11 results. The company's top line grew by a moderate 9.5% YoY. While demand for GSK remains strong, sales appear muted due to a high base effect. This is because the company has consistently posted strong double digit top line numbers in the same quarter the last few years. Operating income grew by 9.4% while operating margins remained flat during the quarter. During the quarter staff costs and other expenditure grew sharply. However, fall in raw material costs and advertisement spending (all as a percentage of sales) helped keep the operating margins flat and operating income growth in line with sales. Net profits grew by 15% YoY during the quarter. This was due to strong other income growth which doubled during the quarter and a marginal fall in effective tax rates. Effective tax rate fell from 34.4% in 1QCY10 to 34% during the current quarter.

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