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The Week in Review for 28 January 2011

The Week in Review for 28 January 2011
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First Published: Fri, Jan 28 2011. 09 31 PM IST
Updated: Fri, Jan 28 2011. 09 31 PM IST
On Tuesday the RBI increased its two key policy rates by 25 basis points each. The repo, which is the rate at which it lends to banks, is now at 6.5%. And the reverse repo, which is the rate at which it borrows from banks, stands at 5.5%. The RBI said the hikes would help prevent rising food prices from spilling over into general inflation. But figures released two days later show India’s food inflation is making a comeback. The food price index climbed 15.57% in the period to 15 January. That’s compared to 15.52% in the week before.
And here’s a look at some of the corporate earnings announced this week. The country’s biggest consumer goods firm HUL reported mixed numbers. Its profit declined 1.7% to Rs638 crore in the third quarter. But HUL’s revenue expanded 11.6% to Rs5,027 crore. Revenue growth mostly came from personal care products and processed foods. But that didn’t translate into more profits because costs of raw materials, packaging and advertising went up.
Also this week, India’s two biggest private banks beat all expectations. On Monday ICICI Bank reported its highest-ever quarterly earnings. Its net profit climbed 30.5% to Rs1,437 crore. That came mostly on the back of a 53.6% fall in provisions to just Rs465 crore. Meanwhile net interest income climbed 12% to Rs2,310 crore. And net interest margin remained steady at 2.6%.
And HDFC Bank also did better than expected. Its net profit jumped 33% to Rs1,088 crore. But the bank’s advances grew just 1.33%. In comparison, the industry as a whole saw advances grow nearly 10% during the quarter. HDFC’s other numbers are also mixed. While net interest income expanded 25% to Rs2,777 crore, net interest margins went down to 4.2% from 4.4%.
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First Published: Fri, Jan 28 2011. 09 31 PM IST