After starting today's session on a shaky note, the Indian markets rose sharply as buying activity intensified during the previous two hours of trade. Buying activity is being witnessed in stocks across the board, with those from the IT, realty, metal and oil & gas spaces leading the pack of gainers. The market sentiment is very positive as the advance to decline ratio is poised at 2.5 to 1 on the overall BSE.
The BSE-Sensex is currently trading higher by around 230 points (up 1.1%), while the NSE-Nifty is up by about 65 points (up 1.1%). Stocks from the mid and small cap spaces are also seeing some interest as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.9% and 1.1% respectively. The rupee is trading at 44.49 to the US dollar.
Engineering stocks are currently trading firm led by Alstom Projects, Punj Lloyd and Areva T&D. Praj Industries recently announced its quarterly and half year results for the quarter ended September 2010. The company put up a weak performance as its revenues and profits declined by 46% YoY and 78% YoY respectively during 2QFY11. Operating profits declined by 84% YoY as operating margins crashed to 6.1% as compared to 20.1% during the corresponding quarter last year. While the company was able to reduce raw material costs in line with the decline in sales, employee costs and other expenses were the cost heads that impacted margins. Employee costs rose by 9% YoY, while other expenses decreased by 23% YoY (both in absolute terms). The company's profit before tax decreased by 79% YoY, a lesser decline as compared to the fall in operating profits. This was on the back of higher forex gains. On excluding the same, profit before tax as well as profits declined by 82% YoY each. As for the performance during 1HFY11, revenues and profits were down by 38% YoY and 70% YoY respectively.
FMCG stocks are trading mixed with Henkel India and Archies Ltd. trading firm and Dabur and Godrej Consumer trading weak. As per a leading financial daily, Dabur has completed the acquisition of Turkey-based personal care products maker Hobi Kozmetik Group. Dabur had acquired Hobi Group firms, which include Hobi Kozmetik, Zeki Plastik and Ra Pazarlama, for Rs 3.2 bn in July this year. Hobi Kozmetik is a leading manufacturer of personal care products. Its brands include 'Hobby' and 'New Era' which are hair care and skin care products. The company has a presence in 35 countries, including the Middle East and North Africa. As per a Dabur spokesperson, the acquisition of Hobi group gives the company a foot-hold in a new market and adds international brands to the company's portfolio. It may be noted that at present, 20% of Dabur's overall sales comes from the international markets.