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India's Third Giant Leap
This Could be One of the Biggest Opportunities for Investors
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- Todays Market
- Indian Stock Market News April 26, 2011
FMCG, capital goods weigh on markets Tue, 26 Apr 11:30 am
Indian stock markets continued to flounder in the red on the back of profit booking in heavy weights over the last two hours of trade. Stocks from the FMCG and capital goods space are the biggest losers while stocks from the realty and IT space have lost the least.
The BSE-Sensex is down by 212 points while NSE-Nifty is trading 66 points below the dotted line. BSE Midcap index is trading down by 0.4% while BSE Small cap index is trading 0.5% below yesterday's closing. The rupee is trading at 44.58 to the US dollar.
Auto stocks are trading in the red with M&M and Maruti Suzuki leading the losses. As per a leading financial daily, Mahindra & Mahindra is planning to set up production facilities in Africa. The company wants to establish plants in Tunisia, Morocco, South Africa, Kenya, Ethiopia and Zambia. It may be noted that Mahindra already has plants in Gambia, Tchad, Mali, Ghana and Nigeria. In fact, the tractor company is present in 24 out of the 53 countries of the continent. It gets 15% of its exports from Africa and aims to double it in a year's time.
The company management stated that the company is following a bottom of the pyramid strategy in the opportunistic market of Africa. The demand they feel will arise out of the growing disposable incomes of the people residing there. The company will be focusing on three-wheelers, light commercial vehicles and utility vehicle Bolero for this market. It is also in the process of appointing a country manager along with a team of 7-8 people to handle this expansion plan.
FMCG stocks are trading weak led by Gillette India and Hindustan Unilever. Procter and Gamble Hygiene and Health Care Limited (PGHHCL) released its 3QFY11 results. The company's top line grew by 14.3% YoY. This performance came on the back of a 21% YoY volume growth partially offset by price cuts and increase in excise duty. The company's Feminine Hygiene segment posted a 23% YoY growth for the quarter driven by strong demand for Whisper Choice and Whisper Ultra. Health Care business of PGHHCL also performed well with a growth of 11% YoY on the back of 28% YoY growth in Vicks Cough drops and 24% YoY growth in Vicks Inhalers. Operating income of the company grew by 6% YoY. While advertisement and staff costs fell by 14% YoY and 5% YoY respectively, other expenditure grew by a tepid 11% YoY. However, sharp increase in cost of goods sold by 50% YoY on the back of increase in commodity costs resulted in operating income growing slower than sales. Net profit of PGHHCL fell by 10.8% YoY on the back of lower operating income, fall in other income and rise in depreciation costs. Net profits would have been lower but for a fall in effective tax rate.
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