Consumer durables, power buoy markets

Tue, 29 Dec 12:30 pm

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After witnessing a strong start today, the Indian stock markets remained somewhat choppy during previous two hours of trade. However they managed to trade above the dotted line on account of buying activity in the index heavyweights lead by consumer durables, power and metal sectors.However select stocks from IT , healthcare and telecom sector are failing to garner investors' interest.

BSE sensex and NSE Nifty traded in the green, up by 58 point and 24 points respectively. The BSE-Midcap and BSE-Smallcap are trading up by 0.9% and 1.3% respectively. The rupee is trading at 46.68 to the dollar.

As per a leading business daily, Indian IT majors like TCS, Infosys, Wipro and HCL are vying for multinational giants like HP-EDS and IBM for a share in US$ 30 bn worth of infrastructure management contracts.

According to Forrester's research, atleast US$ 430 bn of infrastructure management contracts are due for renewal in 2010 bringing in a huge opportunity for the new service providers in this category as atleast one-fourth of these are expected to go to new suppliers. It is estimated that 15 top vendors like HP, IBM, CSC together with some Indian players delivered infrastructure projects worth US$ 84 bn in 2009. However, the incumbent players like IBM and HP which are huge in size and experience are formidable opponents. Nevertheless, Indian IT vendors with their renewed capabilities and forward looking strategies for such services are quickly gaining a share of the pie. It is evident from the large multi-year, multi-million dollars deal won by our IT players. HCL signed deals with Readers Digest, Xerox and Nokia while Wipro acquired Citi Technology services also winning a 6 year US$ 1 bn infrastructure deal. We believe that the Indian companies can make substantial inroads into this business segment through innovating newer models like 'pay-per-use' or pay-per-device'.

According to a leading business daily, India's fifth largest drug maker (by revenue) Lupin is sighting some acquisitions in India in order to gain market share. It is particularly eyeing acquisitions in the therapeutic areas such as central nervous system, nephrology and urology. Lupin does not have any significant presence in these segments which have little competition due to a small number of players therein. It may be noted that Lupin which is one of the fastest growing company in Indian pharma market aims to increase its revenue to RS 30.4 bn by 2013 from Rs 11.4 bn in FY09. It has hinted that it is keen on following an organic as well as inorganic path in meeting its goal as in it is difficult to gain market share and penetration in the competitive market only through organic growth.