BSE Consumer Discretionary index hits new high; Shalimar Paints surges 17%

Mahindra Holidays & Resorts, Lux Industries, Dish TV India and Borosil rallied more than 10 per cent on the BSE in intra-day trade

Shares of consumer discretionary companies were in focus at the bourses on Wednesday, with the S&P BSE Consumer Discretionary Goods & Services hitting a new high after a strong rally in smallcap stocks like Mahindra Holidays & Resorts, Lux Industries, Dish TV India, Shalimar Paints and Borosil, which rallied more than 10 per cent on the BSE in intra-day trade.

The S&P BSE Consumer Discretionary Goods & Services index was up nearly 1 per cent at 4,892.63 on the BSE in intra-day today, surpassing its previous high of 4,856.98, touched on February 16, 2021. In comparison, the benchmark S&P BSE Sensex was up 0.56 per cent at 50,922 points, at 11:28 am.

The stocks from sectors like movies & entertainment, hosiery, hotels and restaurants, auto ancillaries, paints and real estate have seen a sharp run-up today.

According to a PTI report, the government has begun assessing the impact of the second wave of infections on different sectors and may look at providing support at an appropriate time to segments requiring fiscal help. The services sectors like hospitality, tourism and aviation which had just started recovering were hit hard by the second wave of Covid, the report suggests, quoting sources that these segments might need some support on an urgent basis from the government.

Among individual stocks, Shalimar Paints hit a 52-week high of Rs 120.05 after rallying 17 per cent in intra-day trade on the back of nearly three-fold jump in trading volumes, on expectation of strong volume growth to sustain, riding the potential demand shift from unorganised segment.

Shares of Lux Industries surged 14 per cent to hit a new high of Rs 2,630.55 on the BSE in intra-day trade today after the company reported a more-than-doubled net profit at Rs 90.64 crore in the March quarter (Q4FY21), on the back of healthy operational income. The company, one of India’s largest hosiery producer and exporter, had posted profit of Rs 41.49 crore in Q4FY20. In the past three days, the stock rallied 26 per cent on the BSE.

Lux Industries' income from operations during the quarter under review jumped 49 per cent year on year (YoY) at Rs 601 crore against Rs 404 crore in the corresponding quarter of previous fiscal. Ebitda (earnings before interest, taxes, depreciation, and amortisation) margins improved 507 basis points (bps) at 21.45 per cent against 16.38 per cent in the year-ago quarter. Higher Ebitda margins were on account of an increased share of value-added products and overall cost efficiency measures, including advertisement expenditure.

The management said the performance has been driven by progressive improvement in demand and consumption across the innerwear industry. The company witnessed healthy traction for economy and mid-premium categories and saw a gradual pickup in premium and export segment.