Planning Commission deputy chairman Montek Singh Ahluwalia today said S&P has corrected the negative signals given by its global rival Moody’s. “I am happier at the outcome. The earlier Moody’s downgrade has been offset by S&P. What S&P has said has a lot of substance to it,” he added
New Delhi: Appreciating the views of Standard & Poor’s (S&P) on the Indian banking sector, Planning Commission deputy chairman Montek Singh Ahluwalia today said the rating agency has corrected the negative signals given by its global rival Moody’s, reports PTI.
“I am happier at the outcome. The earlier Moody’s downgrade has been offset by S&P. What S&P has said has a lot of substance to it,” Mr Ahluwalia told reporters here.
“Ours is a very well-regulated banking sector and there was no justification whatsoever for raising questions on the financial stability of the banking sector,” he added.
Yesterday, S&P had upgraded its rating of the Indian banking sector, stating that domestic regulations are in line with international standards.
“In our view, banking regulations in India are in line with international standards and the regulator Reserve Bank of India (RBI) has a moderately successful track record,” S&P said while upgrading the risk profile (BICRA) a notch higher to ‘Group 5’.
The action came a day after another global ratings agency, Moody’s, downgraded the outlook of the Indian banking system to ‘negative’ from ‘stable’ amid an economic slowdown that it said was affecting asset quality, capitalisation and profitability.
Asked if the downward revision of the economic growth projections for this fiscal is likely to affect the ratings agencies’ views on India's sovereign ratings, Mr Ahluwalia said: “The growth target has been already moderated... At 7.6%, the economy is growing much faster than any other economy in the world.”
“So I think our objective should not be to worry about the fact that it has slowed down, but should be to see how to make it grow at 8% plus next year,” he said.
He said a growth rate of 7.6%, as projected by the RBI, or of 8%, as projected by the Planning Commission, is reasonable.
He also termed the latest developments in Greece, where a national unity government has taken over, as positive.
“It looks that the political impasse in Greece, which actually prevented the implementation of the Greek package, may be overcome. There was also lot of concern whether eventually Greece would lead to contagion in other European countries... I am sure that the European finance ministers are looking at how to avoid the contagion,” he said.
During the September quarter, Varun Industries commissioned new wind turbines with a combined capacity of 5 MW under its windmill project in Jaisalmer
Stainless steel-maker Varun Industries has reported a net profit of Rs15.41 crore for the quarter ended 30 September 2011, a growth of 24% vis-a-vis the corresponding period of the previous fiscal. The company had posted a net profit of Rs12.39 crore for the corresponding quarter last fiscal. Net sales of the company grew by 2% to Rs903.60 crore during the quarter from Rs 885.82 crore in the July-September quarter of FY'11, it said in a filing to the Bombay Stock Exchange.
"Our total growth target for the fiscal is 15% and we are in line with our target. In percentage terms, it may look small, but in absolute numbers, we are on our target," a company spokesperson said. He added that the company experienced accelerated growth in the corresponding quarter last fiscal, as the global economy was in good shape and Varun Industries had ventured into commodities trading.
The company said reserves of rare earth elements it found in Madagascar in July are "substantially higher" than the earlier estimate of 266.8 million tonnes.
"CPG Resources - Mineral Technologies, a globally renowned laboratory based in Australia, has certified 46.5% average mining grade of heavy mineral rare earth. As per this report, it is expected that Total Heavy Mineral (THM) reserves in the deposits will significantly increase from the earlier estimate of 266.8 million tonnes," the company has said in its statement.
The company had also acquired the cookware and non-stick manufacturing plant of Kishco Ltd in Nashik for Rs10 crore during the quarter and the company is expecting 15%-20% growth in the pressure cookers segment with this acquisition.
During the quarter, the company also commissioned new wind turbines with a combined capacity of 5 MW under its windmill project in Jaisalmer, Rajasthan, thereby increasing its total wind power generation capacity to 13.95 MW.
"We are on the verge of realising significant potential from our various assets in Madagascar as we are witnessing steady progress in our mining operations for gold and rare earths," company chairman Kiran Mehta said while talking about the Q2 results. "This, coupled with our foray into the retail segment through acquisition of Kishco plant, has opened new horizons for Varun in the near future," he added.
In the late afternoon, Varun Industries was trading at Rs269.05 per share on the Bombay Stock Exchange, 0.84% up from the previous close.
Despite strong inflationary pressures and constrained supply of bauxite and coal during the monsoon, profit before interest and taxes was sustained
Aditya Birla Group company Hindalco Industries Ltd has posted an increased net profit of Rs503 crore in Q2FY12 against Rs434 crore in Q2FY11, an increase of 16%. "Despite strong inflationary pressures and constrained supply of bauxite and coal during the monsoon, profit before interest and taxes was sustained. We are going ahead with all our greenfield as well as other expansion projects," managing director of the company D Bhattacharya said. In Q2FY12, the company's aluminium revenues were higher at Rs2,213 crore, up from Rs1,911 crore in Q2FY11, a rise of 16%, as a result of higher volumes and better aluminium prices on the London Metal Exchange (LME), he said. In the copper business, revenues were at Rs4,062 crore as compared to Rs3,951 crore in Q2FY11, on the back of higher LME and by-product credits.
Copper volumes were lower on account of shutdown of one of the smelters up to mid July. However, the copper business being a custom smelting operation, with offset hedging programme, was not significantly impacted by the gain or loss on changes in LME prices or foreign exchange fluctuations, he said. The copper business' profit before interest and taxes was higher at Rs148 crore from Rs129 crore due to higher TC/RC and by-product credit offset to some extent by higher energy costs, lower volume due to shutdown and related expenses. The company's net sales and operating revenue at Rs6,272 crore in Q2FY12 were up 7% over Q2FY11, driven by higher volume and improved realisation, despite lower sale of value added products.
In the late afternoon Hindalco was trading at Rs128.65 per share on the Bombay Stock Exchange, 4.35% down from the previous close.