Mid and small caps buck the trend

Fri, 8 Oct 11:30 am

   Previous Close   

   Pre-Open   

   09:30 am   

   01:30 pm   

   Closing   

After starting today’s session on a positive note, Indian indices have shed early gains. Other key Asian markets are trading mixed with Hang Seng up and Nikkei down. Currently, heavyweights in the Sensex are trading mixed with stocks from the metals and auto space bearing investors’ brunt. However, stocks from the healthcare and oil & gas sectors are trading strong.

Currently, the BSE-Sensex is trading down by around 39 points, while the NSE-Nifty is down by about 11 points. However, strong buying interest is being witnessed amongst the mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading up by 0.3% and 0.6% respectively. The rupee is trading at 44.39 to the US dollar.

Cement stocks are trading firm led by Mangalam Cement and Heidelberg Cement. However, Samruddhi Cement and Madras Cement are trading weak. After adding 20 m tonnes (MT) over the last four years, Ultratech Cement has kickstarted the next round of capacity expansion plans at an investment of Rs 50 bn. The company is planning to add 25 MT of capacity over the next five years in order to maintain its market share. It should be noted that currently the company has 19% market share in the world’s second largest market after China. Ultratech has already placed orders for two 3.3 MT of furnace with a company in Germany for expansion at its Rawan plant in Chhattisgarh and Rajashree unit in Karnataka.

It should be noted that Ultratech is the single largest cement company with annual cement capacity of 48.8 MT, post the merger of the cement division of Grasim Industries with itself. It also has a captive power capacity of 504 MW.

Auto stocks are mainly trading negative with M&M and TVS Motors leading the losses. Hero Honda plans to set up a fourth manufacturing unit in the Baddi-Barrotiwala-Nalagarh industrial belt of Himachal Pradesh. It expects that it will exhaust all its current installed capacity of 5.4 m units this fiscal. The sector is booming on the back of robust economic growth and has made a fantastic comeback so far this year. Hero Honda sold over 4 m two-wheelers in FY10 and is looking to breach the 5 m mark in FY11.

The company has sought the Himachal Pradesh government’s help in acquiring land for the project, which includes a plant and various ancillary units. Hero Honda has sought the state government’s help to acquire around 801 acres (2,000 bighas) of land, according to a leading business daily.  Hero Honda executives have been surveying locations in Sirmaur and Solan districts of the hill. The company is keen on the site in the Solan district, which is connected by road with major markets in North India.