After starting today’s session on a negative note Indian indices have continued to trade well in the red. Other key Asian markets are trading mixed with China in the green and Japan in the red. Stocks from the consumer durables and metals space are trading strong while stocks from the realty and IT space are trading in the negative.
The BSE-Sensex is trading down by around 55 points, while the NSE-Nifty is down by about 14 points. Buying interest is, however, being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are both trading higher by 0.2%. The rupee is trading at 47.32 to the US dollar.
FMCG stocks are mainly trading in the positive with United Breweries seeing the highest gains. Dabur is also one of the top gainers. According to a leading business daily, Dabur is in advanced talks to acquire Turkish personal care products maker Hobi Kozmetik. The estimated deal value is Rs 3 bn. The Turkish company makes shampoos, hairstyling, haircare, skincare and bath and shower products for women, men and children. These are marketed under the brand names Hobby and New Era. It has operations in more than 30 countries. It is the market leader in baby and body care products. It has annual revenues of around Rs 1 bn, with profits of Rs 150 m. Dabur, on the other hand reported revenues of Rs 34 bn and profits of Rs 5 bn for FY10. Dabur is looking for an overseas acquisition; however news of this acquisition has not been confirmed by the company. Godrej and Marico, the company’s rivals have already made international acquisitions. If this works out, it will be the maiden acquisition for Dabur. The company has cash of around US$ 200 m and it has a history of turning around brands such as Balsara and Fem care.
Media stocks are trading mixed with Reliance Media and DB Corp leading the gains. However, Zee Entertainment and Sun TV are trading in the red. Zee Entertainment announced its 1QFY11 results recently. The results were encouraging with the company reporting 42% YoY and 64% YoY growth in sales and net profits, respectively. Growth in the topline was led by 90% YoY growth in advertising revenues. This was driven by higher channel shares across the network, a far improved macro environment and a continued preference of advertisers towards television. However, subscription and other services revenues reported a modest growth during the quarter.
EBITDA margins improved to 27.6% in 1QFY11 due to lower programming and operating cost. However, SG&A expenses increased marginally during the quarter. Bottomline grew by 33% YoY in 1QFY11 on the back of topline growth, higher operating margins and lower finance charges. In 1QFY11, ZEE TV had an average weekly channel share of 20% and average weekly gross rating points (GRPs) of 253. This was despite the intense competition faced on account of sports programmes aired during the quarter.