Mid and small caps outperform

Wed, 14 May 11:30 am

   Previous Close   

   Pre-Open   

   09:30 am   

   01:30 pm   

   Closing   

After opening weak today, the Indian Indices are trading flat in the morning amid outperformance among mid and small cap stocks. The buying interest is the highest in metal stocks while the selling pressure is the highest in energy stocks.

The BSE-Sensex is trading down 40 points and the NSE-Nifty is trading down 8 points. Similarly, the BSE Mid Cap index is trading up 0.9%, while the BSE Small Cap index is trading up 1.2% today. The rupee is trading at 59.68 to the US dollar.

Software stocks are trading mixed today. While Tata Consultancy Services (TCS) and Tech Mahindra are leading the gainers; HCL Tech and Wipro leading the losers. As per news reports, India's second largest software firm Infosys has completed the process (pending shareholder approval) of hiving off its software products business into a separate subsidiary. This subsidiary, named Edgeverve Systems will solely focus on the creation and distribution of software products and platforms. In FY14 this division contributed only 3.6% of revenues and most of that was from the company's flagship banking product, Finacle. However Finacle has been retained by the standalone company and will not be part of Edgeverve. Thus the subsidiary will be starting off on a very low revenue base. It must be pointed out that the products business has a higher margin profile than the services business and Infosys will look to increase the share of revenues from this subsidiary in the coming years. Infosys is trading down 0.3% today.

Engineering stocks are trading mixed today. Elecon Engineering and BGR Energy are leading the gainers; while, Sanghvi Movers and Kalpataru Power and Transmission are leading the losers. As per a press release on BSE, Larsen and Toubro (L&T) has received orders worth Rs 11.4 bn in various business segments during April-May 2014. According to the company, orders bagged by power transmission & distribution (T&D) and building & factories segments are worth Rs 10.7 bn; while additional orders have been received from various ongoing projects. Orders worth Rs 7.5 bn in the power T&D business are from Saudi Arabia and Oman. It has also received an order from Vizag Transmission, a subsidiary of Power Grid Corporation of India (PGCIL), in Andhra Pradesh. Order inflows for the company for 9MFY14 grew by 23% YoY to Rs 674 bn. Despite a good growth; L&T has revised its order inflow guidance from 20% YoY growth to 15-20% YoY growth for FY14 as it expects muted order inflow growth in 4QFY14. The current order book of the company provides revenue visibility of more than 2 years. L&T is trading 1% down today.