Metals lead the rally

Mon, 6 Dec 11:30 am

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   Pre-Open   

   09:30 am   

   01:30 pm   

   Closing   

Indian indices continue their northbound journey on buying interest in heavy weights during the last two hours of trade. Stocks from the metals and consumer durables space are trading firm, while stocks from the FMCG and banking space are trading weak.

The BSE-Sensex is up by 217 points while NSE-Nifty is trading 67 points above the dotted line. BSE-Midcap is trading up by 1.2% while BSE-Smallcap index is trading 1.3% above Friday’s closing. The rupee is trading at 44.88 to the US dollar.

FMCG stocks are trading mixed with Camlin Limited and Henkel India trading firm and ITC trading weak. As per a leading financial daily, Dabur India plans to give its juice brand ‘Real’ a makeover as part of its strategy to garner sales of Rs 7 bn from its foods division in the next 3 years. The company intends to focus more on the nutritional aspect of the brand instead of the taste which it has been promoting uptil now. As part of the rebranding excise Dabur has changed the look and the packaging of all its Real products. Dabur is believed to have invested Rs 80 m on the whole brand building exercise. It may be noted that Real is an over Rs 4 bn brand and the market leader in the packaged fruit juice category. At present Dabur sells 12 variants of the juice and plans to launch new variants in the near term. With these initiatives, the company expects the brand to grow by double digits.

Power stocks are trading firm led by CESC and Reliance Infrastructures. NTPC, the largest power producer in the country, has asked the power ministry to help resolve an issue with Ministry of Environment and Forest (MoEF) regarding its Dulanga coal block in Orissa. As MoEF has identified certain parts in the Dulanga coal block as "no go" zone it is affecting the overall development plans of NTPC. Again with the company’s Farakka and Kahelgaon power plants operating below capacity we believe the Dulanga coal block is a very important asset for NTPC. It may be noted that the company has not been able to develop captive mines in the recent past due to lack of environmental clearance from the MoEF. This has hampered the overall power generating capacity of the company. Right now the company has an installed capacity of 32,000 MW with plans to reach 75,000 MW by 2017. However, considering the recent spate of environmental issues it would be interesting to see whether the company is able to achieve coal linkages for the same.