35 in march 2012 worsening the case for a revival in corporate sector projects where the bank is still heavily exposed to ease the tight liquidity situation in the banking system the reserve bank has lowered the cash reserve ratio twice so far this year but with inflation still on the rise the likelihood of another reduction is not so close at hand the sharp fall in the value of the rupee only worsens the outlook for most lenders given their large exposure to the corporate sector even in such an environment hdfc bank has managed growth profitability and risk well while most banks have reported an increase in bad loans and are struggling to maintain margins hdfc bank has consistently shown improvement on both accounts it registered 22 credit growth compared with the 17 growth for the sector during the last quarter in addition it has maintained its net interest margin at 42 in the march 2011 quarter which is one of the best in the industryhindalco a sharp rise in the price of fuel and caustic soda key aluminum making ingredients has driven alumina refining costs higher significantly increasing the cost of production for aluminum making companies at the same time there is a supply surplus in the global aluminum market and demand is growing at a slower pace because of the demandsupply situation lme aluminum prices are not expected to cross 2638 on average through 2012 representing a 38 increase over 2011 in such a scenario it is very hard for companies to increase profitability as their margins suffer even a lowcost producer backed by good management such as hindalco would find it difficult to operate under such conditions however compared to its peers hindalco is a stronger company it commands one of the highest margins in the industry at 1518 with a stock price of rs 107 it trades at a pe of less than 10 which is very cheap compared to its peers the stock would be due for a rerating only when a significant improvement is seen in the global aluminum industrymbl infrastructures the construction and infrastructure industry has been impacted by several macroeconomic problems since the last oneandahalf years since infrastructure projects require high debt a rise in interest rates has severely dented the profits of these companies a slowdown in orders and delay in regulatory clearance have added to their woes mbl infrastructures mbl is a smallsized construction firm catering to rail road and industrial segments due to backward integration of its business the company has been able to maintain a higher operating margin compared to its peers the company has an inhouse crusher and quarrying plants which reduce its raw material costs mbls strategy has been to venture for projects from reputed clients for instance in the roads segment it bids for projects only from nhai or sponsored projects of world bank or adb in addition as a company policy it maintains low debt the current debttoequity ratio of mbl is