Capital goods to the rescue

Mon, 21 Jan Closing

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   Pre-Open   

   09:30 am   

   11:30 am   

   01:30 pm   

Indices in the Indian equity market came off the day's highs during the closing stages. However, they still managed to close the day in the positive. While BSE-Sensex edged higher by around 63 points, gains on the NSE-Nifty came in at 18 points (up 0.3%). BSE Mid Cap and BSE Small Cap indices were lacklustre today and closed nearly flat. Nearly 3 stocks gained for every 2 stocks that closed the day in the red.

Asian indices closed mixed today with Europe too displaying similar trend currently. The rupee was trading at Rs 53.9 to the dollar at the time of writing.

Markets seem to be finding it difficult to get past the psychologically crucial mark of 20k. However, given how long term fundamentals are poised, we won't be surprised if this mark is comfortably breached in the near future. However, as value investors , we pay more attention to individual business models than overall index levels and here, stocks should be bought irrespective of market levels. What counts are the entry barriers and the quality of management we believe. Of course, valuations shouldn't be too high.

Bharat Heavy Electricals (BHEL), India's largest supplier of power generation equipment, was amongst the highest gainers on Sensex today with gains of more than 2%. The buoyancy apparently was on the back of a big landmark achieved by the company in the continent of Africa. As per reports, the company successfully commissioned its first Steam Turbine Generator (STG) unit in Ethiopia. This is the company's first STG set to be commissioned in Africa. The capacity though was on the lower side, standing at a mere 12 MW. BHEL is not having a particularly good time on the bourses. In the last one year, the stock has lost around 30% of its value as rising competition and regulatory uncertainties took a toll on its performance. Hopefully the current year should see the company improve upon its 2012 show.

DB Corp, one of India's largest print media companies, announced its third quarter results today. Its topline for the December quarter increased 11% YoY whereas growth in operating profits came in at an impressive 25% YoY. Its bottomline improved further and grew by 27% YoY. Performance for the first nine months however remained tepid with bottomline growing 4% YoY on the back of a 9% growth in topline. Advertising revenue growth bounced back to double digits reporting 11% YoY increase. Circulation revenue grew by 16% as compared to the same quarter last year. The stock however closed weak today and was down 1%.