Realty, engg stocks lead gains

Thu, 3 Feb 01:30 pm

   Previous Close   

   Pre-Open   

   09:30 am   

   11:30 am   

   Closing   

The Indian markets continued to trade well above the dotted line during the previous two hours of trade. Buying activity is being witnessed in stocks across the space with those from the realty, capital goods and banking spaces leading the pack of gainers. Healthcare and pharma stocks are however amongst the top under performers at the moment.

The BSE-Sensex is trading higher by about 310 points (or 1.7%), while NSE-Nifty is trading higher by about 80 points (up 1.5%). Stocks from the mid and smallcap spaces are also trading firm with the BSE Midcap and BSE Small cap indices trading higher by about 0.7% each. The rupee is trading at 45.61 to the US dollar.

Auto stocks are currently trading mixed with Ashok Leyland, Bharat Forge and Cummins India trading weak, while Tata Motors, Escorts and Hero Honda are trading firm. The stock of commercial vehicle major Ashok Leyland is under pressure on the back of its volumes for the month of January 2011 not being in line with market expectations. In the nine month period ended December 2010, the company reported sales volumes of 64,426 units as compared to 38,119 units during the corresponding period last year. However, sales volumes post the month of October 2010 have declined considerably on the back of the new emission norms coming into play and price hikes announced by the auto manufacturers. For instance during the quarter ended December 2010, the company reported sales volumes of 18,437, which was higher by 14% YoY. As such concerns over whether the company would be able to meet the target of 90,000 to 95,000 units (given by the management earlier) for the full year FY11 started making rounds. However, the company's management recently indicated that it would was confident of achieving this target. And for it to do the same, it would need to sell about 10,000 units each month in the quarter ended March 2011.

However, during the month of January 2011 the company sold 7,711 units, which is lower by 2% as compared to last year. While domestic sales came in at 6,880 units as compared to 7,460 units during the same month last year, exports rose to 831 units from 411 units.

FMCG stocks are currently trading weak led by Godrej Consumer, Dabur, Marico and Nestle. However, the stock of GSK Consumer Healthcare is the sole gainer at the moment on the back of the company reported strong results for the quarter ended December 2010. The company has reported a 21% YoY and 59% YoY growth in sales and net profits respectively. Operating (EBITDA) margins for the company rose sharply to 14.2% (as a percentage of sales) for the quarter. Bottom line for the quarter grew by an impressive 58.5% YoY. For CY10, the company's net profits increased by 28.8% YoY while the net profit margins grew by 0.9% to 12.6%. This performance comes on the back of increase in operating income, higher other income, fall in interest as well as depreciations costs and lower effective tax rate.