Indian stock markets continue to flounder in the red on profit booking in heavy weights over the last two hours of trade. Stocks from the auto and IT space are trading weak while stocks from the oil & gas and FMCG space are trading firm.
The BSE-Sensex is down by 136 points while NSE-Nifty is trading 50 points below the dotted line. BSE Midcap index is down by 0.8% while BSE Small cap index is trading 0.7% below yesterday's closing. The rupee is trading at 44.53 to the US dollar.
FMCG stocks are trading mixed with stocks like Hindustan Unilever and Gillette India witnessing buying interest while Camlin and Godrej Consumers are trading in the red. Dabur India has gotten into an agreement with Ajanta Pharma to acquire their energizer brand "30-Plus". It may be noted that "30-Plus" was launched in 1990 as an herbal energizer capsule for thirty-plus males in India. The brand promoted by the likes of Jeetendra turned out to be an instant hit among the Indian consumers.
Dabur's latest announcement is in line with the company's intention to focus on healthcare business. This transaction will help the FMCG company establish its presence in the OTC (over the counter) health care market. As per the management, it will provide them synergy benefits and enable them to suit the demands both domestically and internationally. They are in talks with a few more companies to increase their product portfolio in the OTC segment. Dabur's turnover last year was Rs 41 bn of which Rs 10 bn were contributed by the OTC segment.
Engineering stocks are trading mixed with Finolex Cables and Punj Lloyd trading firm while Lakshmi Machine and Emco Ltd are trading weak. Sintex Industries declared its FY11 results. The company's top line for the year grew by a strong 35% YoY. This growth was on the back of the company's plastic and textile divisions. While the plastic division posted a robust growth of 36% YoY, textile business grew by 26% YoY. Sales of the plastic division was led by the sub segment of building material which grew by 51% YoY during the year and custom molding which grew by 26% YoY during the year. Operating margin of the company grew by 2% to stand at 18.2%. This was due to fall in staff costs and other expenditure (as a percentage of sales). The growth would have been sharper but for a sharp increase in raw material costs (as a percentage of sales). Net profit grew by 39.8% YoY. This was slower than operating profit growth and comes on the back of fall in other income, increase in interest costs and rise in effective tax rate.