Indices remain buoyant

Wed, 2 Feb 01:30 pm

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Indian indices continued to trade firm during the previous two hours on the back of buying interest in heavy weights. Stocks from realty and oil & gas space continue to lead the gains while stocks from the power and capital goods space are trading weak.

The BSE-Sensex is up by 187 points while NSE-Nifty is trading 42 points above the dotted line. BSE Midcap and BSE Small cap indices are both up by 0.6%. The rupee is trading at 45.61 to the US dollar.

Cement stocks are trading mixed with Heidelberg Cement and Birla Corp trading firm. However, Chettinad Cement and India Cement are facing significant selling pressure. Shree Cement announced its 3QFY11 results recently. The company has reported a 20% YoY and 96% YoY decline in sales and net profits respectively. The fall has come on the back of 9.4% YoY decline in cement revenues and 46.2% YoY decline in power revenues. Operating profits reported a significant decline of 53.1% YoY. Operating profit margin declined by 18.6% from 38.8% in 3QFY10 to 20.2% in the current quarter. Profit before tax (PBT) reported a 99.3% YoY drop on account of higher depreciation, exceptional items and interest expenses. During the quarter and 9mFY11, the depreciation charge is high on account of commissioning of new 145 MW power plants. The net profit, which declined by 83.6%, was eased a bit by the tax credit that the company received during the quarter. The board has declared an interim dividend of Rs 6 per share for FY11.

Stocks of two-wheeler manufacturers are trading mixed with Bajaj Auto and TVS Motor trading marginally weak, while Hero Honda is trading higher by about 1%. Bajaj Auto and Hero Honda announced their sales volumes for the month of January 2011 recently. The former reported an 18% jump in sales during the month. The volume growth was led by company's popular motorcycle brands - Pulsar and Discover. The company sold a total of 313,583 units, with the two key brands forming about 68% of sales. Bajaj's motorcycle segment constituted of about 88% of total volumes (275,622 units) and rose by 18% YoY. On a month on month basis, the sales volumes came in higher by about 13%. As for the three-wheeler segment, the same grew by 15% YoY to a little less than 38,000 units. In addition, exports grew by a strong 44% YoY during the month, with the company selling over 103,000 units. As for the year till date, the company's total volumes sales stood at about 3.2 m units, which is higher by about 38% YoY as compared to the corresponding quarter last year.

India's largest two-wheeler maker, Hero Honda reported sales of 466,524 units for the month of January 2011, which is higher by 20% YoY. It must be noted that this is the ninth consecutive month wherein the company has clocked monthly sales of over 400,000 units. However, during the months of October and December last year, the company sold units in excess of half a million.