Indian equity markets continues to trade weak over the last two hours of trade on back of heavy selling pressure witnessed across industry heavyweights. Metal and realty stocks witnessed maximum selling pressure.
Steel stocks are trading in the red led by Jindal Steel and Tata Steel. Hindustan Zinc has announced its results for the quarter ended June 2012. The company has reported a 3.5% YoY decline in net sales and 5.8% YoY increase in net profits for the quarter ended June 2012. Operating profits declined by 10% YoY, while operating margins declined by 4% YoY. The increase in net profits was driven by higher other income (up 51% QoQ due to higher yield on investment and also MTM gain of Rs 1.2 bn) and low tax rate of 13%. Net profit margins increased by 5% YoY. Other income grows by 59.7% YoY. The company maintains that production at Rampura Agucha mine will ramp up in H2FY13 and volume will be flat YoY. FY13 capex of Rs 180 bn kept intact. The company had cash and equivalent of Rs. 194 bn.
Engineering stocks are trading mixed with Honeywell Automation and Voltamp Transformers leading the list of gainers while Crompton Greaves and Elecon Engineering were the top losers. As per a leading financial daily, Larsen and Toubro (L&T) and Pipavav Defence have formed two separate joint ventures (JV) with Mazagon Dock to produce equipment for the defence sector. As per the JV, Mazagon will partner L&T to manufacture submarines for the navy while the venture with Pipavav will make frigates, destroyers and aircraft carriers. This will help Mazagon in executing its existing orders through these joint ventures. On the other hand, L&T needs defence orders to deal with the current situation and this deal has come in at the right time for the engineering company. Pipavav too will benefit out of these new orders as these will result in more cash flow.