After witnessing a strong opening today, the markets fell into the red on account of persistent profit-booking during previous two hours of trade. While stocks from the FMCG, auto, metal, banking and oil & gas sectors corrected the most, buying activity was witnessed in capital goods, consumer durables and healthcare stocks.
The BSE-Sensex and the NSE-Nifty are currently trading lower by around 42 points and 11 points respectively. While the stocks from the midcap space are also trading in the red, with the BSE-Midcap index trading marginally lower by 0.03%, small cap stocks have managed to buck the trend. The BSE-Smallcap index is trading up by 0.1%. The rupee is trading at 46.39 to the US dollar.
According to a leading business daily, ITC is planning to foray into the UAE food market through a partnership with a Gulf company, Al Seer Group. It may be noted that the company currently does not market any of its products in the UAE and Gulf Cooperation Council (GCC) market. Nevertheless, it has big plans for the same. The company has struck a strategic alliance with Al Seer Group for distributing its confectionary products in the market. It will market its Sunfeast wheat biscuits, cookies, crackers, candies, éclairs and chews in the target markets. It is also participating in the ‘Gulfood’ exhibition for the first time this year.
It is worth noting that the company that ventured into the biscuit segment in India in 2003 with its brand Sunfeast, has managed to capture 10% market share since then. We believe that this is a good move given that food portfolio forms a significant part of ITC’s FMCG business which contributes around 14% to its consolidated topline. During 3QFY10, its branded packaged foods business grew by 24% YoY on the back of improved product mix, smarter sourcing of inputs, improved servicing of markets, and supply chain efficiencies.Currently ITC is trading in the red.
As per a leading business daily, Wipro Infotech, Wipro’s business unit overseeing Indian domestic IT market has won an IT contract worth Rs 1 bn from Punjab and Sind Bank (P&SB). According to the contract, Wipro Infotech will be responsible for integrating the bank’s branches with an IT network as well as implementing Infosys’s core banking solution, Finnacle. It may be noted that this contract was previously given to erstwhile Satyam Computers in 2006. However, its failure to deliver the contract on time resulted in dissolving of the contract.
Wipro Infotech which has already worked on such contracts rolling out core banking solutions for a bunch of PSU banks like Oriental Bank of Commerce, Dena Bank will procure both hardware as well as software for the contract. This 10 year contract is strategic for the company as P&SB aims to become a Rs 1000 bn bank by 2011 for which it will significantly increase its branch network and services. We believe Wipro’s focus on domestic IT sector will aid it in strengthening its foothold in the fast growing Indian IT market. The company already generates over 20% of its consolidated revenue from India. Wipro is currently trading in the positive on BSE.