Auto stocks ensure positive start

Wed, 11 Aug 09:30 am

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The Indian markets have started today's session on a positive note. The benchmark indices opened above the breakeven mark and have stayed in the positive territory. Other key Asian markets are in the red with Japan (down 2.3%) leading the pack of losers. The US markets closed lower by 0.6% yesterday.

Currently in India, heavyweights from the BSE-Sensex are trading strong with auto majors witnessing the most buying activity. The BSE-Sensex is trading higher by around 30 points, while the NSE-Nifty is up by about 10 points. Buying activity is also being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.4% and 0.7% respectively. The rupee is trading at 46.50 to the US dollar.

Infrastructure major IVRCL announced its 1QFY11 results yesterday. Both its top-line and bottom line registered a decline during the period. The company's top line registered a decline of 0.3% YoY during 1QFY11. This was mainly of account of slow moving projects in Madhya Pradesh and Andhra Pradesh. Over all, the company lost around Rs 2.5 bn 1QFY11 on account of delays in these projects. Operating profits increased 1.2% YoY in 1QFY11 due to a decline in overall expenditure. Operating margins were flat and registered an improvement of 0.1% during the quarter. Net profits on the other hand declined 20.8% YoY in 1QFY11 due to increase in depreciation and interest expenses partially offset by decline in taxes. The stock of IVRCL is currently trading lower. Its peers like Pratibha Industries and Nagarjuna Construction have however begun the day on a positive note.

As per a leading business daily, retail major Shoppers Stop is planning to open around 12 new outlets in the current fiscal year (FY11). It plans to invest Rs 1.2 bn for the same. Further, the company plans to take its total number of stores to 60 in 25 cities over the span of the next 4 years. It may be noted that Shoppers Stop currently has 32 stores in 13 cities in India. In terms of space, the company plans to scale up its retail space under operation from 1.9 m sq ft currently to about 3.5 m sq ft in the next four years. Once these new stores become operational, they will help the company growth its revenue streams over the next few years. Retail stocks are currently trading mixed with Shoppers Stop and Provogue leading the gains. Trent and Bata India on the other hand are trading almost flat.