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According to a note from Nomura Securities,the study of a sample of 139 companies from the BSE 500 index that have reported...

2QFY10 results positive so far

According to a note from Nomura Securities,the study of a sample of 139 companies from the BSE 500 index that have reported 2QFY10 results so far reveals that net sales have increased by 3.3 per cent year-on-year (y-on-y) and 2.7 per cent quarter-on-quarter (q-on-q). Owing to better cost management and lower input prices,this sample of companies has managed to grow operating profits by 28.7 per cent y-on-y and 6.8 per cent q-on-q. Net profits for this sample were up 25.3 per cent y-on-y and 5.4 per cent q-on-q. Net profit margin for the sample is 12.4 per cent versus 12.2 per cent in 1QFY10 and 10.8 per cent in 2QFY09.

On the sectoral front,auto and cement saw strong growth in net sales while telecom,metals and media have been laggards. In terms of net profit,pharma,cement,autos and banks have posted strong growth this quarter while media,construction and infrastructure,and metals have seen profits decline y-on-y.

Policy review to affect banks negatively

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In the credit policy review announced last week,RBI announced changes that are likely to have a negative impact on banks earnings and sentiments,says a note from Nomura. RBI has asked banks to carry a minimum loan loss provisioning cover of 70 per cent by September 2010. Banks that fall short of this norm are SBI,ICICI and Canara.

RBI has increased the Statutory Liquidity Ratio (SLR) from 24 per cent to 25 per cent. This,say analysts at Nomura,will have a negative impact on sentiments now and affect earnings when loan growth picks up in the third or fourth quarter of FY10.

RBI has also increased the provisioning on loans to commercial real estate from 40 basis points to 100 basis points. This is marginally negative for banks and an opportunity gain for HDFC,LIC Housing. Being NBFCs they will not have to make these additional provisions. The key losers will be SBI,ICICI Bank and Canara Bank. Axis Bank,PNB and IDFC are likely to be gainers.

In Odisha, Modi mounts ‘loot tantra-vs-bachat utsav’ attack on Congress over GST

India8 hr ago

Prime Minister Narendra Modi Saturday hailed the revised Goods and Services Tax (GST) structures, saying the era of “double bachat (saving) and double kamai (income)” has arrived under the Bharatiya Janata Party rule. Addressing the ' Namo Yuva Samabesh' in Jharsuguda, Modi accused the Congress of indulging in “loot tantra (tactics)” while in power.

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