Inflation in India Spikes, L&T Drops 6%

Mayank Mehta
21 Jan, 2010
New York City

The Sensex index in India dropped 2.4% after wholesale inflation index surged and Larsen & Toubro lowered its sales outlook. Reserve Bank of India may be forced to increase rate at its meeting on Jan 29. Rupee declined. Kotak Mahindra quarterly net surges 153%.

[R]6:00 PM Mumbai, 8:30 AM New York – The Sensex index in India dropped 2.4% after wholesale inflation index surged and Larsen & Toubro lowered its sales outlook. Reserve Bank of India may be forced to increase rate at its meeting on Jan 29. Rupee declined. Kotak Mahindra quarterly net surges 153%.[/R]

Stocks in India fell sharply after the latest read on inflation showed a sharp rise. Wholesale price index increased to 13.93% in the week ending Jan 9 according to the ministry of commerce from the previous rate of 13.82% in the prior week.

Larsen & Toubro dropped more than 6% after it reported its first quarterly sales and earnings decline in seven years. The company also lowered its sales outlook for the current fiscal year.

The Sensex index in India decreased 423.35 or 2.42% to 17,051.14 and CNX Nifty index fell 127.55 or 2.44% to 5,094.15. Among the Sensex 30 stocks, 5 rose and 25 fell.

On BSE trading, 579 stocks advanced, 2,369 declined and 51 were unchanged.

Banks fell after a surge in inflation and ahead of Reserve Bank of India meeting on January 29 as investors worry that the government may have to increase interest rate sooner than expected.

The IPO of Jubilant Foodworks ended on Wednesday, January 20, with an oversubscription of 31.11 times. Foreign institutional investors made a beeline for the IPO.

Rupee edged lower 10 paisa to 46.03 against one dollar.

Gainers & Losers

Amara Raja Batteries Limited decreased 3.9% to Rs 167.50 after the manufacturer of acid storage batteries said third quarter sales rose 10.5% to Rs 367 crore from Rs 332 crore a year ago. Net profit for the quarter rose 113% to Rs 39.8 crore compared to net profit of Rs 18.7 crore a year ago.

Bharat Heavy Electricals Limited declined 4.1% to Rs 2,297.40 an engineering and manufacturing company said third quarter sales rose 18% to Rs 7,100.3 crore from Rs 6,022.3 crore a year ago. Net profit for the quarter rose 35.6% to Rs 1,072.6 crore or Rs 21.91 per diluted share compared to net profit of Rs 790.6 crore or Rs 16.15 per share a year ago.

Cairn India Limited declined 2.7% to Rs 281.45 after the comptroller & auditor general of India has asked the central government to access financial records of Rajasthan oil fields. It has not yet received records of Cairn’s Barmer oil fields (RJ-ON-90 /1) for auditing, a senior official said.

ICICI Bank Limited fell 2.7% to Rs 853.35 after the bank said third quarter sales fell 22% to Rs 6,089.6 crore from Rs 7,836.1 crore a year ago. Net profit for the quarter fell 13.4% to Rs 1,101 crore compared to net profit of Rs 1,272 crore a year ago.

Ipca Laboratories Limited dropped 0.8% to Rs 1,182.55 after the pharmaceutical company said third quarter sales rose 27% to Rs 394 crore from Rs 311 crore a year ago. Net profit for the quarter rose 151% to Rs 58.2 crore compared to net profit of Rs 23.2 crore a year ago.

Jindal Poly Films Limited rose 4.6% to Rs 378.00 after the board of the company approved buyback of as much as 22,00,000 shares at a price not to exceed Rs 450 a share or Rs 99 crore.

Kingfisher Airlines Limited slipped 2.8% to Rs 60.75 after the airline company said third quarter sales fell 6.6% to Rs 1,353 crore from Rs 1,448 crore a year ago. Net loss for the quarter was Rs 420 crore compared to net loss of Rs 413 crore a year ago.

Kotak Mahindra Bank Limited decreased 3.7% to Rs 841.25 after the bank said third quarter net interest income rose 25.8% to Rs 739.8 crore from Rs 588.3 crore a year ago. Net profit for the quarter rose 153% to Rs 331.3 crore compared to net profit of Rs 130.9 crore a year ago.

Larsen & Toubro Limited fell 6.8% to Rs 1,524.35 after the engineering and construction company said third quarter sales fell 6% to Rs 8,071.4 crore from Rs 8,594 crore a year ago. Net profit for the quarter rose 15.2% to Rs 696.3 crore or Rs 11.45 per diluted share compared to net profit of Rs 604.1 crore or Rs 10.25 per share a year ago. Excluding one-time gain the year ago quarter, profit declined 50%.

Maruti Suzuki India Limited fell 0.07% to Rs 1,455.30.

Piramal Healthcare Limited slipped 6.2% to Rs 355.40 after the drug maker said third quarter sales rose 9.6% to Rs 907.7 crore from Rs 828.3 crore a year ago. Net profit for the quarter rose 127% to Rs 136.2 crore compared to net profit of Rs 59.9 crore a year ago.

Dr. Reddy’s Laboratories Limited declined 6.1% to Rs 1,128.00 after the global pharmaceutical company unexpectedly swung to a loss in the fiscal third quarter and lowered its revenue growth forecast for the current financial year.

Sterlite Industries (India) Limited dropped 3.3% to Rs 824.60 after international copper prices fell after Chinese banking regulator head said that lending in the current year will be curbed by 22% from a year ago.

Shriram EPC Limited decreased 4.0% to Rs 227.45.

Surya Roshni Limited rose 1.1% to Rs 80.85 after the company raised capital expansion plan at Kashipur unit, Uttarakhand to Rs 75 crore from the plan of Rs 30 crore.

Welspun Gujarat Stahl Rohren Limited fell 4.7% to Rs 265.85 after the pipe producing company said third quarter sales rose 4.4% to Rs 1,520.4 crore from Rs 1,456.6 crore a year ago. Net profit for the quarter rose 182% to Rs 127.7 crore compared to net profit of Rs 45.3 crore a year ago.