Indian equity markets had a volatile trading session today. The indices began the day's proceedings on a positive note and maintained the momentum for most of the morning session. While the afternoon session saw some profit booking at higher levels, buying activity resumed thereafter pushing the indices higher. While the BSE Sensex today closed higher by 101 points, the NSE-Nifty closed higher by 26 points. Both the BSE Mid Cap index and the BSE Small Cap also notched gains of 0.5% each. Gains were largely seen in banking and FMCG stocks.
As regards global markets, Asian equity markets closed in the green today while European indices have also opened firm. The rupee was trading at Rs 54.14 to the dollar at the time of writing.
Pharma stocks closed mixed today. While Cadila Healthcare and Lupin closed firm, Ranbaxy and Biocon were at the receiving end. Ranbaxy announced results for the first quarter ended March 2013 (December ending company). Net sales declined by 34% YoY during the quarter, due to Lipitor exclusivity in 1QCY12, which was not present this quarter. Base sales registered double digit growth. Operating margins declined to 6.2% during the quarter, against 28.9% in 1QCY12. This was again due to the presence of high margin Lipitor during 1QCY12. The company reported profit of Rs 1.3 bn in 1QCY12 down by 90% YoY largely because of the fall in operating profits and surge in interest costs.
PSU banking stocks closed mixed today. While Corporation Bank and Punjab National Bank (PNB) found favour, Bank of India and State Bank of India (SBI) closed into the red. Corporation Bank announced results for the fourth quarter and year ended March 2013. The bank posted a marginal growth in net profits on account of higher provisioning and lower margins during the quarter. While total advances were up by 18% YoY as of March 2013, deposits increased by 22% YoY. Total provisions during the quarter rose by 22% YoY. The net interest margin declined to 2.29% in FY13 from 2.48% in FY12. Going forward, the bank will need to expand its CASA base substantially. It has been shedding its costly bulk deposits; however this still remains at elevated levels. Going forward it plans to focus on increasing its CASA base by adding branches and also focus on NPA recovery efforts and keeping gross NPAs below 2%. It also plans to open branches in rural areas to be able to meet its priority sector lending targets which are still below mandated levels.