Smallcaps in the limelight

Wed, 9 Mar 11:30 am

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Indian stock markets are trading weak on the back of profit booking in heavy weights over the last two hours of trade. Stocks from the oil & gas and pharma space are trading weak while stocks from the consumer durable and realty space are trading firm.

The BSE-Sensex is down by 76 points while NSE-Nifty is trading 26 points below the dotted line. BSE Midcap index is trading up by 0.3% while BSE Small cap index is trading 0.6% above yesterday's closing. The rupee is trading at 45.01 to the US dollar.

Auto stocks are trading firm led by Force Motors and Maruti Suzuki. As per a leading financial daily, Honda, Bajaj Auto, Yamaha and Mahindra & Mahindra are gearing up to launch motorcycles in the 200cc and above range. This segment is presently dominated by Bajaj, Royal Enfield and Hero Honda. The 200cc and above segment is small with sales of around 160,000 units per annum. On the other hand it is growing in double digits. It is believed that Honda Motorcycle and Scooter India, the country's fourth largest two-wheeler producer, will be launching the CBR 250 next month with a price tag of Rs 150,000 (ex showroom Delhi). In fact the Japanese subsidiary has already started accepting bookings and has already got 2,500. Bajaj Auto, India's second biggest bike maker will launch the Duke 200 later this year. This will be priced at the same level as the CBR 250. Mahindra 2 Wheelers, from the Mahindra Group, has rescheduled the launch of its Mojo motorcycle, a 300cc performance touring bike, in the second half of this year. As per a company spokesperson, this bike would be priced at Rs 180,000. Yahama is also expected to launch a 250 cc version of one of its bikes. With these new launches we expect competition for players already operating in the premium segment to heat up.

IT stocks are trading weak led by Tech Mahindra and HCL. As per a leading financial daily, Mahindra Group has entered into a strategic alliance with Cisco to provide a range of services including cloud computing. The JV is aimed at exploring opportunities to build smarter cities, virtual dealerships, sports and entertainment and cloud services. These include the Cisco connected stadium platform and Stadium Vision solution which will be used for access control, wireless, smart ticketing and loyalty programmes. Both the companies will work together towards cloud road-map for the Mahindra Group companies; Mahindra & Mahindra, Tech Mahindra and Mahindra Satyam. The first project under this initiative is Mahindra Innovation Park which will create new benchmarks through its smart solutions. According to company management, Mahindra has made an initial investment of Rs 100 m in the partnership and will continue to invest in the future. The tie up is likely to address about 10%-15% of the US$ 5 bn global market.

This non binding agreement would be for multiple contracts across the globe. Cisco sees this alliance with Mahindra as a crucial development and is looking forward to transforming cities and communities using network as the platform.