Mid & small caps rule the roost

Wed, 3 Nov 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 managed to hold on to their gains. Other key Asian markets too are trading in a strong trajectory. Currently, heavyweights in the Sensex are trading strong with stocks from the metals and realty space leading the gains. However, consumer durables and oil & gas stocks are trading flat.

Currently, the BSE-Sensex is trading up by around 166 points, while the NSE-Nifty is up by about 52 points. There has been strong buying interest amongst the mid and small cap stocks as well with the BSE-Midcap and BSE-Smallcap indices trading higher by 1.2% and 1.3% respectively. The rupee is trading at 44.35 to the US dollar.

Retail stocks are trading strong with Koutons Retail and Provogue leading the gains. Shopper's Stop announced its 2QFY11 results recently. Revenues grew 22.6% YoY in 2QFY11. Economic revival led to improvement in consumer sentiment. This resulted in a rebound in shopping. The departmental stores reported 23% YoY growth in sales during the period under consideration, while all formats grew at the rate of 22% YoY. The growth has been supported by increase in transaction size (up 6% YoY) and average selling price (up 3.5% YoY). Apart from robust sales, profitability has been supported by change in product mix. The company's increased focus on consignment merchandise (lower bought out merchandise means lower mark downs) enabled it to report higher margins. At the net level, the company reported profit growth of 44% YoY. This has been because of higher operating income and lower interest costs partly offset by higher effective tax rate.

Food and tobacco stocks are trading up led by VST Industries and United Spirits. Glaxo smithkline Consumer Healthcare Limited released its 3QCY10 results. The company's topline grew by a robust 24% YoY on the back of strong demand for Horlicks and Boost. Operating income grew by 23% YoY during the quarter. This was slower than topline growth, in spite of a fall in raw material costs (as a percentage of sales). The reason for this performance was a sharp increase in advertisement spending during the quarter as the company invested behind brand building. Net profit grew by 30.9% YoY during the quarter. This was a result of growth in operating income, higher other income and lower interest expense partly offset by higher effective tax rate. The tax rate increased from 32% in 3QCY09 to 33% in 3QCY10.