The Hindu Business Line : FMCG majors make a comeback

INVESTOR apathy towards stocks of FMCG companies showed signs of reversal on Thursday as select stocks of MNCs such as HLL and Nestle stayed firm.

Their performances were all the more noteworthy given that the broad market was trending down. The Sensex, which vaulted 55 points on Monday when the ONGC issue was oversubscribed within the first 30 minutes, has since then shed nearly 300 points. It breached the 5,700-point barrier to end at 5,635 on Thursday.

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Broader indices such as the BSE 200 and the S&P CNX 500, which had fared marginally earlier this week, continued to do well in relative terms. The CNX Midcap 200 index and the CNX Nifty Junior shed the least during the day. The star performer, however, was the BSE FMCG Index, the only index to end the day with gains.

Stocks such as HLL, Nestle and Colgate Palmolive, along with Indian majors such as Godfrey Philips and Marico Industries, notched gains. Notable losers included soaps and detergent companies such as Henkel SPIC, Nirma and Proctor & Gamble. ITC also ended the day with losses.

Gainers included stocks such as Restile Ceramics, Eternit Everest, Softpro Systems, Berger Paints, Pritish Nandy Communications, Radico Khaitan, Ruchi Soya and Godrej Consumer.

The stock of Restile Ceramics flared up by 565 per cent. Trading volumes in this B2 group stock was only about 940 shares. The stock price zoomed to Rs 13.30 from Rs 2. The stock had last traded on July 17, 2003. The stock of Eterneit Everest gained five per cent as the company declared a bonus of 300 per cent. Berger Paints also gained five per cent as the company confirmed news reports that it is looking to acquire companies using surplus resources.

Softpro Systems and Pritish Nandy Communications stayed firm in the wake of acquisition by promoters.

Godrej Consumer also stayed firm. The company announced that it is now buying the stock in the market as part of the buyback programme.

Ruchi Soya edged higher marginally. The company confirmed that it is finalising plans for a Rs 275-crore capacity expansion and is in talks with International Finance Corporation for project finance.

Radico Khaitan gained 1.3 per cent. The short-term credit rating of the company has edged up marginally. However, the rating agency has changed from ICRA to Fitch.

Elder Pharma firmed up by 0.2 per cent. The company has entered into a tie-up with a Japanese company to manufacture and market a product for the local market.

Satyam Computers and Gujarat NRE Coke also fared well during the day relative to that of the market.

Satyam lost only 0.7 per cent. The company announced to the stock exchange that the stake of Fidelity Mutual Fund has exceeded five per cent.

Gujarat NRE Coke also lost only 0.5 per cent. The company announced that it has tied up its supply of coking coal from overseas sources for 2004-05.

Some of the prominent losers included MICO, Ind Swift Labs, Varun Shipping and Kale Consultants.

MICO slumped by eight per cent even as the company announced a 30 per cent rise in profits.

Ind Swift Labs fell by 2.8 per cent. The company announced that as of yet no deal has been struck with Reliance Mutual for placing the shares.

Kale Consultants fell by 3.3 per cent. The company announced preferential allotment of shares to its promoters.