Realty stocks lead

Wed, 2 Feb 11:30 am

   Previous Close   

   Pre-Open   

   09:30 am   

   01:30 pm   

   Closing   

Indian indices are trading firm on buying interest in heavy weights over the previous two hours of trade. Stocks from realty and oil & gas space are the largest gainers while stocks from the power and capital goods space are the smallest.

The BSE-Sensex is up by 250 points while NSE-Nifty is trading 60 points above the dotted line.BSE Midcap and BSE Small cap indices are both up by 0.8%. The rupee is trading at 45.56 to the US dollar.

Real Estate stocks are trading firm with Unitech and Ansal Housing leading the gains. However, Ackruti City and Omaxe Ltd. are trading weak. DLF announced its 3QFY11 results recently. Top-line increased 22.4% YoY on the back of strong sales booking. The company booked 2.48 msf of area in 3QFY11 as compared to 2.0 msf in 2QFY11. Operating margins expanded to 47.5% during the quarter due to high profit margin project launches. However, net profits declined 0.5% YoY in 3QFY11 due to increase in depreciation and interest expenses.

Currently, DLF has 41 m sqft of area under construction in its development business and 16 m sq ft in the annuity business. The total developable area stands at 399 m sqft as at the end of 3QFY11. On the realization front, commercial segment witnessed a significant jump of 83.7% YoY. However, realizations in the residential segment were relatively flat. Margins in the residential and commercial space stood at 75.5% and 80.1% respectively during the quarter. The company has been working consistently to reduce the debt burden by unlocking its non-core assets. It may be noted that the net debt/equity ratio at the end of the quarter stood at 0.79x, with an average cost of debt in the region of 10.8%.

Hindustan Sanitaryware Ltd. (HSL) declared its 3QFY11 results. The company's top line grew by 36% YoY. HSL's building products division grew by a robust 43% YoY driven by strong recovery of real estate and the construction industry and the company's focus on premium products. The second division of HSL i.e. container glass also turned in a strong performance, growing by 31% YoY. While volumes increased by 21% YoY, higher realization contributed towards the remaining top line growth. Better product mix as well as price hikes contributed to the growth in realizations. Operating margins of the company improved by 4.1% to stand at 22.2%. This performance came on the back of lower raw material costs as well as lower power and fuel expenses (both as a percentage of sales). Better energy efficiencies at a new plant belonging to the container glass division helped the company control its power and fuel costs. Bottom line grew by an impressive 177% YoY as lower interest charges and better economies of scale further boosted performance.