India Markets Friday Wrap-Up: India Tops Gainers in Asia

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 |  Includes: EPI, IFN, IIF, INDY, INR, PIN, SCIF, SCIN
by: Equitymaster
Even with the government's pending decision on the hike of diesel and cooking fuel prices, the benchmark indices in Indian stock market took off to a flying start and ended the day with the maximum gains in the Asian region. Auto, banking, IT and commodity stocks witnessed the maximum investor favor. While the BSE-Sensex closed higher by around 514 points (up 2.9%), the NSE-Nifty closed higher by around 151 points (up 2.8%). The BSE Midcap and BSE Small cap indices too ended the day higher by nearly 2%.

As regards global markets, Asian indices across the board closed higher today while European indices have also opened in the positive. The rupee was trading at Rs 44.98 to the dollar at the time of writing.

Power Finance Corporation (PFC), the largest financer of power projects in the country, has raised about Rs 30 bn through 3, 5 and 10-year bonds. The funds will be largely used for lending to the proposed ultra mega power projects in the country. The generation sector comprised the largest allocation of PFC's loan book in FY11 (84%). Private sector projects enjoyed a marginally higher allocation of 7%, compared to 5% in FY10. The company reduced its loans to the state governments to 65% from 68% previously. Loans to the central sector increased marginally.

PFC managed to grow its advances by 25% YoY in FY11. But, in keeping with the overall slowdown in the power sector, growth saw a slight tapering off versus performance in the 9 month period ended December, 2010 (9mFY11). The financier saw a 32% YoY growth disbursements. Both PFC's loan growth and net interest margins (NIMs) in FY11 came in line with our estimates for the fiscal.

Mahindra & Mahindra (M&M), India's largest utility vehicle maker, is aiming to spread out its reach with the launch of two sports utility vehicles (SUV) from the recently-acquired Korean automaker Ssangyong. With this launch the company will foray into the Indian premium car segment. M&M will launch few new products that include a new SUV (from Mahindra), a new electric car (Reva) and Korando C, Rexton from Ssangyong during the year. It is also planning to take its own products to the Korean market next year which will give the company the opportunity to extend Mahindra's global footprint. The company is planning to sell 120,000 Ssangyong cars this year. Last year, the Korean auto maker sold about 82,000 units.

M&M's management has indicated that going forward commodity prices will play a key role in determining profitability for both the auto industry. This would be the case for the sector as a whole.
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