Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.This is an entirely free service. No payments are to be made.
After opening the day in the green, the Indian indices witnessed a choppy trading session and are presently trading near the dotted line. Sectoral indices are trading on a mixed note with stocks from the telecom and capital goods sectors leading the gains. Banking stocks are however trading in the red.
The BSE Sensex is trading up 23 points (up 0.1%) and the NSE Nifty is trading up 10 points (up 0.1%). The BSE Mid Cap index is trading up 0.6% while the BSE Small Cap index is trading up by 0.5%. Gold prices, per 10 grams, are trading at Rs 26,700 levels. Silver price, per kilogram is trading at Rs 34,831 levels. Crude oil is trading at Rs 2,237 per barrel. The rupee is trading at 67.76 to the US$.
Stocks in the textile sector are trading on a firm note with Vardhman Holdings and Eastern Silk Industries witnessing maximum buying interest. As per a leading financial daily, Grasim Industries will be spending more than Rs 40 billion on capacity expansion of its various businesses in the upcoming financial year. The company is going to invest Rs 38 billion on capex during the fiscal 2016-17 on its subsidiary, cement maker Ultratech. Further, it will invest Rs 2.5 billion in its VSF and chemicals business during the same period.
For the current fiscal, the company had earmarked Rs 21 billion for Ultratech. Of this, Rs 16 billion was spent on capacity expansion, logistic infrastructure, modernisation, upgradation and its ready mixed concrete business during the April-December period. On the VSF chemicals business, the firm had earmarked Rs 4.5 billion for 2015-16 fiscal.
For the December quarter of this fiscal, all the businesses of the company posted encouraging results. The company reported 95% surge in its consolidated net profit during the quarter on a YoY basis. Total income rose to Rs 90 billion in the December quarter from Rs 80 billion during the corresponding period last year.
Going ahead in the VSF segment, the company is planning to focus on expanding its domestic market through product development activities, working closely with brands, designers and retailers. As in the case of cement, the company's management stated that the demand is expected to pick up in the near term with the government's focus on infrastructure development, housing sector, smart cities, roads, among others and the firm is well positioned across the country to cater to the growth in demand.
Presently the stock of the company is trading up by 1.6%.
Automobile stocks are trading on a mixed note with Ashok Leyland and Eicher Motor leading the gains. As per an economic daily, Maruti Suzuki has reported a 2.6% decline in its total sales during the month of January on a YoY basis. The company sold 1,13,606 units during last month as against 1,16,606 units in the same month last year.
Domestic sales during the period increased marginally by 0.8% on a YoY basis. Sales of passenger cars declined by 1.4% to 87,757 units as against 89,014 units in the year-ago month. Sales of utility vehicles, including Gypsy, Grand Vitara and Ertiga, jumped 26% to 8,114 units last month from 6,432 units in the corresponding period last year. Sales of vans rose around 4% to 10,512 units last month compared with 10,113 units in the year-ago period. Exports during the month declined 35% to 7,223 units as compared with 11,047 units in January 2015.
About the domestic performance, the company said that sales would have been higher but for the lesser number of working days in January 2016 that impacted overall production and dispatches.
Long term prospects though remain intact. The company aims to reach sales volume target of 2 million units over the next five years and plans to launch 20 new models during this time. Moreover, the company has also outlined a capex of Rs 35 billion in FY16, which will be towards new product launches, R&D, marketing expenses and maintenance.
Presently the stock of the company is trading down by nearly 3%.
For information on how to pick stocks that have the potential to deliver big returns, download our special report now!