Realty stocks not invited to the party

Tue, 2 Mar 01:30 pm

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The Indian markets continued to trade firm as buying activity was witnessed in stocks across sectors during the previous two hours of trade. While stocks from the realty sector are the only ones not in favour, those from the auto, metal, banking and FMCG spaces continue to be market participants' favorites at the moment.

The BSE-Sensex is trading firm, up by around 260 points, while the NSE-Nifty is up by around 70 points. The BSE-Midcap and BSE-Smallcap are also trading firm, up by around 2% each. The rupee is trading at 46.03 to the dollar.

Engineering stocks are currently trading firm led by TRF, Thermax, Crompton Greaves and LMW. However, the stock of ABB is amongst the few losers on the back of poor results that were announced by the company at the end of last week. The company reported a 13% YoY decline in sales during 4QCY09 (December ending fiscal), while its revenues for the full year declined by 9% YoY. The decline in revenues was led by the company's power systems business which reported a 43% YoY decline in sales. Operating margins during the quarter contracted by 4.4% YoY on the back of higher cost of traded goods and higher other expenditure (both as percentage of sales). Further, the company reported a 43% YoY decline in profits during the quarter, while for the full year profits stood lower by 35% YoY. Apart from contraction in operating margins, higher depreciation charges and lower other income also pared the bottomline growth.

However, there was some good news for the company during the last quarter. ABB recorded a surge in order inflows, wherein orders booked stood at about Rs 24 bn, which is higher by about 88% YoY as compared to the same quarter last year. The cumulative order inflow for the CY09 stood at about Rs 87 bn, a growth of 8% YoY. The order backlog at the end of the quarter stood at almost Rs 85 bn, which is higher by about 38% YoY.

Trading higher by about 3.7%, the BSE-Auto Index is currently the top gainer amongst the sectoral indices. The stocks of Tata Motors, TVS Motor, Ashok Leyland and M&M are leading the pack of gainers. Maruti Suzuki announced its sales numbers for the month of February 2010 this morning. The company reported a 22% YoY growth in total sales volumes. While domestic sales volumes grew by 20% YoY, exports increased by 39%. Domestic volumes during the month stood at 84,765 units. This is the company's highest ever domestic monthly sales. Further, exports formed about 12% of the total sales volumes as compared to about 11% during February 2009.

Sales volumes during the fiscal year till date stood at about 923,000 units, higher by about 31% YoY as compared to the corresponding period last year. While domestic sales volumes increased by about 22% YoY, exports increased by about 127% YoY. Exports during this period stood at about 14% of total sales volumes as compared to 10% last year.