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Banks, auto stocks buck the trend
Fri, 11 May Closing

The benchmark indices in Indian stock markets languished in the red throughout the session today. The day's proceedings began on a negative note and worsened with profit booking in power, commodity and pharma heavyweights. Few banking and auto stocks, however, bucked the trend. While the BSE-Sensex closed lower by around 127 points (down 0.8%), the NSE-Nifty closed lower by around 37 points (down 0.8%). The BSE Mid cap closed lower by 0.8%, while the BSE Small cap closed lower by 0.9%.

As regards global markets, Asian indices across the board closed lower today while European indices have also opened in the red. The rupee was trading at Rs 53.57 to the dollar at the time of writing.

Arvind Ltd. declared its results for the fourth quarter and financial year 2011-12 (4QFY12). The company has reported 21% YoY growth in net sales while its profits have grown by 48% YoY in FY12. The topline grew in FY12 aided by higher volumes and price improvements in denim sales in the domestic markets. Consolidated EBIDTA also grew by 12% YoY. However, there was a marginal drop in EBIDTA margin from 13% in FY11 to 12.2% in FY12 due to lower operating margins in the brand and retail segments. Despite higher interest costs, net profits grew by 48% YoY in FY12. The company declared a dividend of 10%.

As per a business daily, Gas Authority Of India Ltd. (GAIL) (India) has inked a pact with Tamil Nadu Industrial Development Corporation to create natural gas supply infrastructure in the State. As per the deal, GAIL is going to create a gas pipeline infrastructure across the State. The agreement follows a previous MoU between the two in 2008 when GAIL and Tidco signed a pact to create a joint working group to assess the medium and long-term demand potential for gas and assess the infrastructure that needs to be created. There are however some short to medium term concerns for GAIL due to regulatory risk and capacity under utilization. At pretax profit level, the company earns 52% (in FY11) of its income from non gas transmission segment. This will only get better as the company plans to double its Petrochemical facility (accounted for 23% of profit at pre tax level in FY11).

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