Sensex slips; ONGC declines, Pipavav & India Cements rally

Moneycontrol Bureau

12:30pm Bank of India disappoints

Bank Of India's third quarter net profit fell 70.4 percent year-on-year to Rs 173.4 crore. Higher provisions, slow growth in net interest income and lower other income & operating profit impacted the profitability during the quarter.

The public sector lender missed street expectations on all parameters. Profit was expected at Rs 818.6 crore and net interest income of Rs 3,148.3 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18.

Net interest income increased 2.3 percent to Rs 2,780.2 crore during October-December quarter from Rs 2,719 crore in same quarter last year. Net interest income is the difference between interest earned and interest expended.

Other income (non-interest income) slipped 1.6 percent Y-o-Y to Rs 1,079.7 crore and operating profit declined 13 percent to Rs 1,865.4 crore in the quarter gone by.

Provisions for bad loans jumped 12.6 percent year-on-year (up 64 percent quarter-on-quarter) to Rs 1,580.7 crore during the quarter with the provision coverage ratio at 56.62 percent as on December, 2015. The stock declined 5.5 percent.

12:00pm Market Check

The market remained under pressure in noon trade. The Sensex fell 80.97 points to 28453 and the Nifty declined 16.75 points to 8610.65 as banking, FMCG and metal stocks lost ground.

The broader markets outperformed yet again, the BSE Midcap and Smallcap indices gained 0.9 percent each. About 1431 shares have advanced, 1065 shares declined, and 217 shares are unchanged on the Bombay Stock Exchange. ONGC declined 0.5 percent on news that the company will have to pay a fuel subsidy of Rs 8,700 crores for the December quarter. Media reports suggested that ONGC and oil PSUs may have to pay Rs 10,900 crore in subsidy as the finance ministry has agreed to pay only Rs 5,085 crore subsidy for the December quarter.

Mahindra & Mahindra gained 0.2 percent along with Pipavav Defence (up 9 percent) on reports that Mahindra group is planning to pick up 25-30 percent stake in the defence company at Rs 66 per share, valuing the deal at Rs 3000 crores. Pipavav Defence board meet is slated for tomorrow.

India Cements jumped 14 percent after the company approved the proposal for re-organisation of Chennai Super Kings franchise. N Srinivasan says the ownership of Chennai Super Kings will go to shareholders now.