Indices keep a cautious undertone

Tue, 19 Apr Closing

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The Indian stock market indices had a subdued outing today. After starting off the session below the dotted line, the indices kept oscillating to either side of yesterday's close. Markets finally closed flat, with a positive bias. Investors chose to take a cautious approach, in light of S&P downgrading US government debt. While the BSE-Sensex closed higher by around 31 points (up 0.2%), the NSE-Nifty closed higher by around 12 points (up 0.2%). The BSE Midcap and BSE Small cap did not fare any better, as they closed moderately higher by 0.4% and 0.3% respectively. FMCG and power stocks weighed heavy on the indices today.

As regards global markets, Asian indices mainly closed in the red today, on the back of adverse macroeconomic data from the US. China and Japan were some of the major losers in the region. The European indices however opened on a positive note. The rupee was trading at Rs 44.53 to the dollar at the time of writing.

Zee Entertainment recently announced its 4QFY11 (fourth quarter in the financial year 2011) results. This media company owns channels such as Zee TV, Zee Cinema, Zee Cafe, among others. It saw a 43% growth in consolidated net income in 4QFY11, on the back of a 23% increase in sales. For the full financial year ended March, 2011 (FY11), sales increased by 37% with profits increasing 2.5% YoY (year-on-year). Advertising (Ad) revenues grew at a healthy pace, rising 60% YoY in FY11. Ad revenues bounced back along with the rest of the economy, after a slowdown in FY10. Subscription revenues also saw an increase of 14% YoY, for the year. During the 4QFY11 quarter, the company repaid debt of Rs 910 m. As of FY11, it has gross debt of Rs 1.2 m and net cash of Rs 12.5 bn. With results coming in better than expected, the stock closed up by over 8%

Hindustan Sanitaryware and Industries (HSIL) recently announced that it is eying acquisitions potentially worth between Rs 800 m to Rs 4 bn. It is looking for potential targets in the sanitary ware, bathroom equipments and kitchen appliance segments. Last year HSIL made two acquisitions, including the bathroom fittings and accessories business of Havells India for Rs 170 m and a UK-based sanitary ware company called Barwood Products for GBP 1 m. Also, it recently undertook a makeover of its flagship 'Hindware' brand, giving it a more youthful look.

The company is also looking at expanding its current capacity. It plans to invest Rs 6.5 bn in setting up a new sanitary ware manufacturing unit in Gujarat. Along with this it plans on setting up a unit in Rajasthan for making taps and another in Andhra Pradesh for container glass. Sanitary ware production capacity will be expanded to 5 m pieces per annum from 2.8 m units. It is also expanding its chain of 'Evok' retail stores offering interiors solutions. The company currently has 8 Evok stores, and plans to open 8 new stores every year. Over the next 2.5 years, it plans to invest Rs 1.5 bn on retail expansion.