India Markets Thursday Wrap-Up: Firm Close For Indian Indices

by: Equitymaster

Indian stock markets traded in the green throughout the trading session today. Although there were alternate bouts of buying and selling seen, the indices managed to trade above the dotted line albeit within a range. The buoyancy was sustained in the final trading hour as well as the Indian stock markets closed in the green. While the BSE-Sensex closed higher by around 131 points (up 1%), the NSE-Nifty closed higher by around 34 points (up 1%). The BSE Mid cap and the BSE Small cap also did well to notch gains of 1% each. Gains were largely seen in IT and metal stocks, while FMCG and healthcare stocks were out of favour.

As regards global markets, Asian indices closed firm today while European indices have opened in the red. The rupee was trading at Rs 49.05 to the dollar at the time of writing.

Auto stocks closed mixed today. While Hero MotoCorp and Mahindra & Mahindra Ltd. (M&M) closed firm,Ashok Leyland and Tata Motors (NYSE:TTM) were at the receiving end. Ashok Leyland announced results for the third quarter ended December 2011. The company's topline registered a healthy growth of 29% YoY for the quarter. This was led by a robust 26% YoY growth in volumes and 3% YoY rise in realisations. For the nine months period, revenues were up 16% YoY. Operating margins remained stable at 7.3% resulting in a 27% YoY growth in operating profits. While raw material costs and other expenditure (as percentage of sales) increased, this was offset by a fall in staff costs. Thus, strong performance at the operating level coupled with a substantial rise in other income and lower tax expenses led to the 54% YoY growth in the bottomline during the quarter. For the nine months period, operating profits grew by 11% YoY, while net profits dipped by 8% YoY on account of a surge in interest costs and depreciation charges.

Private banking stocks also closed mixed today. While ICICI Bank (NYSE:IBN) and Yes Bank found favour, ING Vysya Bank and Axis Bank closed weak. Yes Bank also announced results for the third quarter ended December 2011. Interest income grew by 30% in 9mFY12 on the back of 21% YoY growth in advances while net interest margin remained stable at 2.6%. Net interest income grew 30% YoY in 9mFY12 on the back of 15% YoY growth in advances. Other income grew by 35% YoY in 9mFY12 due to robust growth in fee income. Net interest margin came down marginally lower to 2.8% (2.9% in 9mFY11) due to pressure on interest costs. Bottomline grew 35% YoY in 9mFY12 thanks to write back of provisioning and higher operating leverage. Capital adequacy ratio was comfortable at 16.1%, gross NPA stood at 0.2% (specific NPA coverage 80%).