FMCG in the limelight

Mon, 20 Sep 01:30 pm

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   09:30 am   

   11:30 am   

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Indian indices continued to gain on the back of buying interest in heavy weights over the previous two hours of trade. Stocks from FMCG and realty space are seeing maximum buying interest while stocks from the banking and PSU space are seeing the minimum buying interest.

The BSE-Sensex is trading up by 205 points while NSE-Nifty is trading 61 points above the dotted line. BSE-Midcap index is up by 0.7% while BSE-Smallcap index is trading 1% above Friday's closing. The rupee is trading at 45.65 to the US dollar.

Hotels stocks are trading mixed with Taj GVK and Indian Hotels trading firm while Hotel Leelaventure and EIH Limited are trading weak. As per a leading financial daily, The Indian Hotels Company (IHCL) plans to defer its decision to further invest in Orient Express Hotels (OEH) till the US markets improve. Presently, IHCL holds a 7.85% stake in OEH which it bought for US$ 259.22 m. At the current stock price of OEH, this stake is worth US$ 74 m. As per Mr. Raymond Bickson, MD of IHCL, the company is not looking to dispose of its investment in OEH until the share price corrects. However, OEH is present largely in markets where IHCL does not have a presence. This makes the company attractive to IHCL. Furthermore, Mr Bickson also indicated that the restructuring of the company's international business will take atleast 2 to 3 years to complete. This is because IHCL plans to restructure the shareholding of its international business entities and set up an "apex company" that will house all overseas assets.

Auto stocks are currently trading mixed with Hero Honda and M&M trading firm while, TVS Motor and Bajaj auto are trading weak. According to the data released by the society of Indian automobile Manufacturers (SIAM), the export demand for Maruti Suzuki's once flagship model Maruti 800 (M800) has jumped by above 91% during the April-August 2010 period as compared to the corresponding period last year. It may be noted that due to the Bharat Stage IV emission norms, the company had earlier reported that it would sell less cars of this brand. However, this was the case for the domestic market. The surge in sales has come on the back of higher exports to countries such as Algeria, Chile and Egypt. The cumulative export volumes during this period stood at 4,435 as compared to 2,316 units a year ago. In fact, volumes for vehicle saw a sharp spike as exports during the month of August stood at 1,075 units as against compared to 236 units last year. However, the total volumes (including domestic) during the April-August period stood at 10,505 as compared to 12,649 units last year. During the month of August 2010, M800 domestic sales were down by about 30% as compared to the same month last year.

It may be noted that during FY10, the company sold over 33,000 M800s, which was lower by 33% YoY. The total volumes during the year stood at over 1 m, indicating that M800s form a very small portion of the company's total volumes.