Indian stock market indices traded flat for the past two hours of trade after a positive start to today's session. Stocks from the auto and consumer goods space are trading in the green, while those from IT and realty are trading weak.
Auto stocks are trading firm led by Escorts and M&M. As per a financial newspaper, Ashok Leyland has decided to set up a factory near Chennai to manufacture light commercial vehicles (LCVs) with its JV partner Nissan. The project will require investment of Rs 25 bn over 4-5 years. It will be spread across 380 acres at Sriperumbudur which is 40 km away from Chennai. It may be noted that earlier Hyundai had also set up a manufacturing facility here.
The two automobile partners have stated that they would produce 150,000 vehicles initially from the existing facilities till operations commence in the new factory. Ashok Leyland had recently declared its intention to start manufacturing LCVs from its Hosur plant. It is looking at producing 190,000 units once the new plant at Sriperumbudur gets commissioned. Both the companies had earlier agreed that there will be no cross distribution. Nissan will cater to the luxury segment of the market and Leyland will focus on the demand of the mass market.
Construction stocks are trading weak led by Peninsula Land and GMR Infra. As per a leading financial daily IVRCL Infrastructure has bagged orders worth Rs 5.64 bn. The power, buildings and transport divisions of the infrastructure and construction firm have been awarded these. The power divisionís orders stand at Rs 3.6 bn and include transmission line projects worth Rs 2.4 bn by the Power Grid Corporation of India Ltd. The company has stated that this order is one of the largest orders in transmission line segment for the company and second order for transmission line in north-eastern part of India. The value of order for building division is Rs 1.3 bn and the transport division has bagged orders worth Rs 735 m. This order is for the construction of an embankment for widening of bypass from the metropolitan bridge to Garla station road crossing awarded by Kolkata Metropolitan Development Authority. While this is a positive development for the company and provides revenue visibility in the future, execution of these projects will remain the key.