Helping You Build Wealth With Honest Research
Since 1996. Read On...

MEMBER'S LOGIN

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Revealed
India's Third Giant Leap

This Could be One of the Biggest Opportunities for Investors




Important: We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
By submitting your email address, you also sign up for Profit Hunter, a daily newsletter from Equitymaster
covering exciting investing ideas and opportunities in India.

AD

Focus shifts to mid & smallcap stocks
Tue, 2 Nov 11:30 am

Indian indices crossed the dotted line to trade in the green on buying interest in heavy weights over the previous two hours of trade. Stocks from consumer durables and capital goods space are trading in the green while stocks from realty and oil & gas space are trading in the red.

The BSE-Sensex is trading up by 9 points while NSE-Nifty is trading 4 points above the dotted line. BSE-Midcap is up by 0.4% while BSE-Smallcap index is trading 0.3% above yesterday's closing. The rupee is trading at 44.40 to the US dollar.

Pharma stocks are trading mixed with IPCA Lab and Glenmark Pharma leading the gains. However, Cadila Healthcare and Orchid Chemicals are trading in the red. Sun Pharma announced 2QFY11 results recently. Topline grew by 16% YoY during the quarter. This was largely due to the strong performance of its domestic formulations business which grew by 36% YoY. The company also launched 11 new products during the quarter. As far as the US generics business is concerned, this quarter saw Taro turn into an indirect subsidiary of Sun Pharma.

Operating margins declined by 3.6% from 37.7% in 2QFY10 to 34.1% in 2QFY11 largely due to higher raw material costs (as a percentage of sales). Raw material costs increased from 24.1% of sales in 2QFY10 to 27.7% in 2QFY11. As a result, operating profits grew by a tepid 4% YoY. Having said that, the performance at the net profit level (up 11% YoY) was much better primarily on account of lower tax expenses and depreciation charges.

Food and tobacco stocks are trading firm led by Godfrey Phillips and United Spirits. Godfrey Phillips released its 2QFY11 results yesterday. The company's top line grew by 18.5% YoY on the back of 18.9% YoY growth in cigarette sales. Sales of tea & other retail products category also contributed to growth with an increase of 14.7% YoY in sales. Operating Income of the company grew by a robust 156%. This strong performance was a result of fall in raw material costs as a percentage of sales. Godfrey Phillip's net profit grew by 127.5% YoY. This is due to higher operating income partly offset by higher effective tax rates. Effective tax rates increased from 19.1% in 2QFY10 to 29.9% in 2QFY11.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

View all commentaries | Archives

Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "Focus shifts to mid & smallcap stocks". Click here!

  
ABOUT EQUITYMASTER

Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India. With solid research and in-depth analysis Equitymaster is dedicated towards making its readers- smarter, more confident and richer every day. Here's why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.

PREMIUM PRODUCTS
QUICK LINKS
POPULAR TOPICS
TRENDING TOPICS
FREE NEWSLETTERS
EQUITYMASTER SUPPORTS
  • HelpYourNGO
  • You Tube
  • Linkedin
  • Twitter
  • Telegram
  • Google Play

Copyright © Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited).

Whitelist | Refer | Terms | Privacy | Contact | About | Sitemap

Phone +91-9136015013

Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst)
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Email: info@equitymaster.com. Website: www.equitymaster.com.
CIN:U74999MH2007PTC175407

Name of the Compliance & Grievance Officer: Ms Sonal Ramachandran
Telephone: +91-22-61434003 | Email: compliance@equitymaster.com

LEGAL DISCLAIMER:
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

All rights reserved. Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.