Indian stock markets continued to trade weak on the back of sell off witnessed in heavy weights over the last two hours of trade. Stocks from the banking and realty space are trading weak, while stocks from the FMCG and pharma space are trading firm.
The BSE-Sensex is trading down by 126 points while NSE-Nifty is trading 43 points below the dotted line. BSE Midcap index is down by 0.5% while BSE Small cap index is trading 0.4% below yesterday's closing. The rupee is trading at 44.95 to the US dollar.
Kanoria Chemicals released its FY11 results. The company's top line grew by 15% YoY during the year on the back of strong performance in 4QFY11. Sales of the company's Chloro Chemicals segment grew by a tepid 7% YoY. On the other hand, sales for the Alco Chemicals division grew by an impressive 37% YoY. It may be noted that the company has sold its Chloro Chemicals business to Adiyta Birla Group. Henceforth, till the time the company sets up new business using the cash it has received from this sale, it will remain dependent entirely on the sales of its Alco Chemicals business. Operating income for the year grew by 1.6% YoY while margins fell by 2.2% to stand at 17.4%. This was on the back of sharp increase in purchases and other expenditure partially offset by fall in raw material costs and power and fuel costs. On a segmental basis, operating margins for Chloro Chemicals segment remained flat while margins for the Alco Chemicals business fell from a high of 9% in FY09 to 3% in FY11. Net profit for the year fell by 39% YoY. This was the result of an extraordinary income that the company earned during FY10 but which was not there this year. When adjusted for the extraordinary income, the net profits were seen to grow by 26% YoY on account of much lower taxes.
However, multinational retailers interested to open shop here in India will have to follow stringent investment norms, sourcing conditions and there will be a limit on the maximum number of stores that can be opened. A foreign retailer will have to put in a minimum investment of US$ 100 m. At least 50% of this investment has to be made into back-end infrastructure. As per existing policy, FDI is permitted upto 51% in single brand retail only. FDI in multi brand is not permitted at all.