Indian stock market
indices have been trading strong after opening trade on a flat note. Buying interest is seen in FMCG
stocks while those from the Realty
and Energy space are trading in the red.
Energy stocks are trading weak led by ONGC and Petronet LNG. ONGC declared results for the first quarter of FY12 ended June 2011. It reported 19% YoY increase in top line and 12% YoY increase in net profit for the quarter. Operating profits were up by 15.6% over the same quarter last year while operating margins declined 1.5%. Subsidy burden amounted to Rs 120 bn for the quarter which is down 50% as compared to previous quarter. The production of crude oil was 5.93 m tonnes and that of natural gas was 5.61 m cubic metres (standalone numbers). Other income was up by 78.5% YoY. Interest costs rose and were up by 45%.
Finance stocks are trading mixed with ICRA Ltd. and Cholamandalam Investment trading firm while Crisil and IDFC are trading weak. Shriram Transport released its 1QFY12 results. The company's interest income grew by 21% YoY in 1QFY12 aided by a 22% YoY growth in assets. Net interest margins (on assets under management) improved marginally to 7.91%, from 7.85% in 1QFY11. Other income witnessed a growth of 22% YoY while net NPA ratio increased to 0.5% in 1QFY12 from 0.4% in 1QFY11. Shriram Transport's cost to income ratio remained benign at 21% in 1QFY12 (22% in 1QFY11) due to its operating leverage. Net profits grew by 20% YoY during the quarter aided by low interest and other expenses.
Demand for loans against new commercial vehicles (CVs) continued to support Shriram Transport's business even in a rising interest rate cycle. The company managed to grow its overall disbursements by 20%. However, growth was slower than what was seen at the end of FY11 (36% growth). Disbursements growth saw a fillip from the new CV space. New CV disbursement increased at a robust pace of 68% during 1QFY12. Due to the increase in diesel prices, there has been additional demand for new vehicles with superior technology.