The Mint report for 22 Oct 2009

The Mint report for 22 Oct 2009

The Congress Party was on a high on Thursday after it won elections in all three states that went to the polls earlier this month. The three states, Maharashtra, Haryana and Arunachal Pradesh were all ruled by the Congress and held their assembly elections on 13 October. Analysts say Thursday’s results are likely to enhance the standing of Sonia Gandhi and embolden her in her dealings with both her allies and her party members.

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Larsen and Toubro’s quarterly results beat expectations. Net profits went up 26% to Rs580 crore compared to the previous year. The company’s net sales rose to Rs7,866 crore from the earlier Rs7,682 crore.

Piramal Healthcare also posted its results on Thursday. Net profits shot up 64% to Rs114 crore for the second quarter. Its income grew more modestly, reaching Rs712 crore, up from Rs637 crore in the same period the previous year.

The service tax department has issued a show cause notice to Tata Motors about potential tax liabilities. It’s claiming Tata Motors owes it Rs325 crore worth of service tax over five fiscal years from 2004 to 2009. But paying the tax could prove expensive for Tata Motors, wiping out 63% of its profits from the first quarter of this year. Company officials have indicated to Mint that they will contest the Service Tax Department’s notice.

Also on Tata Motors, the company is considering doing a check on its new Nano cars after reports of fires in three of its vehicles. So far Tata Motors has denied that there have been fires in the two cars it has examined and says it has yet examine the third. The Nano is advertised as the world’s cheapest car, and Tata Motors has already sold some 7,500 units since it started production three months ago.

Varun Shipping is looking to get back into the Indonesian market. Until July, the company transported nearly half of Indonesia’s liquefied petroleum gas, but lost its market when the Indonesian government decided to reserve the sector for local firms. Varun Shipping is now looking for joint venture partner in Indonesia so it can operate three of its ships there.

Inflation continues to rise at an increasing rate. The Wholesale Price Index went up 1.21% in the week ending the 10 October compared to a year earlier.

Markets lost ground again on Thursday, reflecting the fall in equities worldwide. The Sensex plummeted 219 points to close at 16,790 and the Nifty went down 75 points to end trade at 4,989.