Markets Reflect Corporate Woes In First Half

It was the best of times for some scrips. But by and large, stockmarket prices during the first half of the current fiscal reflected the battering Indian corporates were taking.

The numbers say it all. During this period, the 30-scrip BSE sensex declined 20.31 per cent, the NSE-50 18.98 per cent and the Crisil-500 12.94 per cent.

Only three Sensex stocks, Glaxo (12.20 per cent), Bajaj Auto (8.54 per cent) and Hindustan Lever Ltd (6.01 per cent), gained in terms of market value.

`A'-group shares continued to dominate trading, with investors staying lukewarm to B1 and B2 stocks. Trading activity was poor. On an average, 1,100 stocks changed hands on a day-to-day basis.

Among the `A' group shares, 43 out of a total of 150 shares recorded gains. In the `B1' category, 150 out of the total of 475 scrips recorded gains, while in the `B2' group, 160 of the 396 scrips gained. On the losing side were 72 stocks in the `A' group, 230 B1 stocks and 144 B2 stocks.

The gainers' list was dominated by software stocks and companies which had issued open offers. Pharmaceutical shares, particularly from multinational stables, and companies which reported encouraging export prospects also gained.

Encouraging first-quarter results boosted the prospects of some stocks, while the re-rating of fundamentally sound stocks pushed their share prices upward.

Zee Telefilms zoomed by 134 per cent on the news of its proposed merger with Star TV. The company's first-quarter results showed sales up 63.7 per cent and a 57.9 per cent rise in net profit.

The battle royale between the B V Raju family and India Cements gave Sri Vishnu Cement shareholders an opportunity to cash in on the unprecedented 670 per cent rise in the share price on the open offer of Rs 100 per share.

Amara Raja Batteries gained 177 per cent on news that the foreign partner had acquired a 23 per cent stake. The markets too suddenly seemed to rediscover the company's strong fundamentals.

Novartis appreciated 75 per cent on encouraging prospects for the current year. For the year ended March 1998, net profit of Novartis grew 100 per cent. Britannia Industries shareholders are also witnessing a rise in the stock, which gained 50 per cent in the last six months. Krebs Biochemicals moved up by 146 per cent on rising exports, while Hind Inks rose by 76 per cent, following a 121 per cent rise in net profit in the first quarter. In the first half of 1998-99, most commodity stocks took a beating. Reliance Industries dipped 33 per cent despite encouraging first-quarter results. IPCL declined by 21 per cent.

Lower price realisation in the cement sector saw share prices of cement stocks such as Larsen & Toubro, ACC, Gujarat Ambuja fall by more than 25 per cent. The automobile and steel sectors were also hit hard. Telco plunged by 52.9 per cent, while SAIL and Tata Steel declined by 34 per cent.

The sectoral analysis shows that software and hardware stocks gained more than 100 per cent.