Indian share markets march ahead

Thu, 18 Oct 01:30 pm

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Backed by strong buying across the board, Indian share markets picked up momentum in the post-noon trading session. Majority of the sectoral indices are trading positive with realty, banking and auto stocks leading the pack of gainers. Only pharma and oil and gas stocks are languishing in the red.

BSE-Sensex is up 110 points and NSE-Nifty is trading up 32 points. Both BSE Mid Cap and BSE Small Cap indices are up by 0.8% and 0.6%, respectively. The rupee is trading at 53.1 to the US dollar.

Majority of the auto stocks are trading in the green with Tata Motors and Eicher Motors being the biggest gainers. It is reported that Maruti Suzuki is expecting to grow its sales volumes by 10% during 2HFY13 i.e. the second half of the current fiscal. Growth in volumes would be fuelled by the upcoming festive season. During the first half, the sales volumes were flat, which would take the overall growth of the year to about 5% YoY. It may be noted that this estimate is better than the Society of Indian Automobile Manufacturers' (SIAM) estimate of the overall passenger vehicle sales growing by 1% to 3% during the current year. While Maruti's volumes were hurt by the whole Manesar incident, as per the management, the volumes are gradually being ramped up. It is believed that the company is producing about 1,400 vehicles a day at present. It is targeting 1,600 units by the end of the month and about 1,800 units by next month. The company's views may be based on the strong response of the newly launched Alto 800, which already witnessed more than 10,000 bookings within a day of its launch. Maruti Suzuki stock is up 0.9%.

Most of the food stocks are trading in positive led by Lakshmi Energy and Agro Tech Foods. As per a leading financial daily, ITC is going ahead with its aggressive Rs 100 bn investment plan in its hotel business. The company plans to add 5,000 rooms across categories. Although the demand outlook in hotels has been weak with flat occupancy in the past two years and 60% occupancy at present, the company expects demand to pick up in future. The company would add 1,000 rooms across four of its brands over the next 2-3 years. These include a 400-room hotel in Kolkata and a 100-room hotel in Bangalore. Two hotels in Hyderabad and one in Noida are on the drawing board.

Apart from that, the company would be setting up one hotel each in Hyderabad and Noida through a joint venture. On the overseas front, the company would be setting up a premium hotel in Colombo and is looking at establishing presence in Nepal. ITC's position will be further cemented by the opening of a 600-room integrated hotel complex, ITC Grand Chola, in Chennai. The company is also investing close to Rs 1 bn to raise its wind energy capacity by 20 MW to 90 MW. The renewable energy would be utilized across ITC's group businesses, particularly the hospitality business. At present, 55% of the total power consumed by the group's hospitality business is through renewable energy. ITC stock is up 0.9%.