The Mint Report for 28 April 2011

The Mint Report for 28 April 2011

The shortlist is in. India’s has narrowed down on two European combat aircraft for its much-awaited MMRCA deal. The final contenders are the Rafale, which is made by France’s Dassault Aviation and the Eurofighter Typhoon from European consortium EADS. The government has asked the two companies to extend their bids until 31 December.

The MMRCA is a potential 42,000 crore defence contract. It will provide 126 high-end combat for the Indian Air Force.

The four losing contenders for the MMRCA deal include two from the US and one from Russia. There’s already concern their rejection could impact relations with both countries. On Thursday US Ambassador to India, Timothy Roemer, quit his job, though he cited personal and other reasons.

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In corporate, ICICI Bank has reported some of its best quarterly earnings in years. Profit jumped 44% to 1,452 crore.Net interest income went up 23% to 2,510 crore.

While growth in loans made ICICI’s profits something of a record, it was below most expectations. CEO Chanda Kochar said the bank suffered a treasury loss of Rs196 crore because of a rise in yields. And expenses, including salary hikes also ate into profits. On the bright side, the bank expects a loan growth of 20% in the current fiscal. Meanwhile, ICICI Bank’s net interest margin was 2.7% compared to 2.6% in the previous quarter. Shares of the lender rose 0.92% on the BSE to a 1117.55, even as markets fell.

ICICI Bank’s earnings come just days before the Reserve Bank’s next policy statement. It’s widely expected to increase lending rates when it meets on the third of May.

Food inflation has accelerated to a three week high. India’s food price index went up 8.76% in the period to 16 April. The week before it went up 8.74%. As with the previous week, prices of fruits were the main culprit-their costs went up 28% on a year-on-year basis.