Indian stock market indices shed all their gains during the last two hours of trade and slipped into the red. Banking and Pharma stocks witnessed maximum selling pressure, while FMCG and IT stocks managed to find favour.
Power stocks are trading in the red. PTC India Limited and CESC Limited are the biggest losers, while Reliance Power and Torrent Power are the biggest gainers. Power Grid Corporation has announced results for the quarter ended September 2011. Net sales grew by 8% YoY in 1HFY12 while the company transmitted 30 bn units of energy in 1HFY12. While the sales growth was muted due to slower execution of capex plans, the company will benefit from the expansion of its network over the next few years. Operating margins remained stable at 84% with marginal deterioration in the second quarter. Higher other income and lower tax incidence propelled growth in net profit margins in 2QFY12. Net profits grew by 4% YoY during the half year period. Projects worth Rs 33 bn were commissioned during 2QFY12 as against Rs 8 bn during 1QFY12.
Energy stocks are trading weak led by Gujarat Gas and HPCL. According to a leading financial daily, BG Group of Britain is planning to divest stake from its subsidiary Gujarat Gas Company Limited (GCCL), India's largest and oldest private sector city gas distribution (CGD) firm, following a review of its global portfolio. BG had bought 65% of Gujarat Gas in 1997 for Rs 1.7 bn and plans to exit at a time when Gujarat Gas commands a market value of nearly Rs 55 bn. The company has already informed the stock exchange about the start of the divesting process. The main reason for the exit is the gas availability from Panna Mukta Tapti fields which has declined by 50% since 2008, thus making the company dependent on expensive liquefied natural gas (LNG), which is resulting in poor profitability.