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Indian stock markets shed gains
Tue, 8 Nov 11:30 am

Indian stock market indices shed all their gains over the last two hours of trade as profit booking pushed the indices into the red. Realty and Pharma stocks witnessed maximum selling pressure, while FMCG stocks witnessed maximum buying interest.

The BSE-Sensex is down by 14 points, while the NSE-Nifty is down by 9 points. BSE Mid Cap index and the BSE Small Cap index are up by 0.21% and 0.17% respectively. The rupee is trading at 49.32 to the US dollar.

FMCG stocks are trading strong led by HUL and Archies Limited. Dabur India Limited has announced results for the quarter ended September 2011. The company has reported a 29.8% YoY and 8.4% YoY growth in sales and net profits respectively. Consolidated sales for 2QFY12 increased by 29.8% YoY backed by robust sales performance by all divisions. Growth was driven by a mix of price, volume and acquisitions. Operating (EBITDA) margin fell by 220 basis points YoY during 2QFY12. The lower profitability was on account of higher raw material expense and other expenditure. At the net level, profits grew by a mere 8.4% YoY due to a jump in interest outgo, partially offset by higher other income. The net profit margin was down by 260 basis points YoY during 2QFY12.

PSU Banking stocks are trading weak led by Andhra Bank and Bank of India. Corporation Bank has declared results for the quarter ended September 2011. The bank has reported 45% YoY and 14% YoY growth in interest income and net profits respectively. The increase in net interest income was because of a 17% YoY growth in advances. Capital adequacy ratio stood strong at 13.6% at the end of 1HFY12 from 14.1% at the end of 1HFY11 as per Basel II norms. Net NPA (non-performing assets) to advances came in higher at 0.9% in 1HFY12 from 0.4% in 1HFY11. Other income increased 25% YoY in 1HFY12 on higher profit on sale of investments, dividends and forex income. Net profits increased by a muted 14% during the quarter on account of lower NII growth and higher provisions, however higher other income and lower tax payments aided growth.

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