The Mint Report 29 July 2010

The Mint Report 29 July 2010

India’s biggest two-wheeler company is reporting mixed first quarter, with pressure on its margins continuing. On Thursday Hero Honda said it quarterly net profit was down 1.6% to Rs492 crore. Net sales on the other hand climbed 12% to Rs4,265 crore. Rising costs of raw materials and a shortage of components hurt Hero Honda’s earnings. Also putting the brakes on its profits were new emission norms, which added to its expenses. Analysts expect Hero Honda’s margins to remain under pressure in the current quarter as well.

IT major HCL Technologies did better with its quarterly earnings. [GRFX IN] Net profit was up 23% to Rs238 crore. Revenue climbed to more than Rs1,320 crore, an increase of 16%.

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Reliance Industries is looking to building power plants that run on a cheaper fuel. The company is considering setting up three plants fuelled by a mixture of petcoke and imported coal. Pet-coke is a high-energy residue that’s left behind from the process that refines crude oil. If it decides to go ahead, RIL will build the plants off the Gujarat coast. That will keep them close to their two main fuel source--the Jaam-nagar refinery, which produces pet-coke-- and coal coming by ship. RIL’s Jaam-nagar facility is the world’s biggest, refining about 1.24 million barrels of crude every day. That translates into more than five million tonnes of pet-coke.

Food inflation increased in mid July, but at a lower rate. The food price index went up 9.67% in the period to 17 July. In the week before it had jumped 12.47%. The easing of food inflation was caused by a fall in the prices of cereals and vegetables.