Two years later…

The Sensex has regained a level last seen in February 2008. How have the stocks moved since then?

Yesterday, the Sensex closed at 17,711. This level has not been seen since 28 February 2008 when the Sensex had closed at 17,824. In this period, the markets have witnessed a lot of volatility. After spiralling southwards until March 2009, the markets witnessed a dramatic turnaround that saw them gain more than 100% in one year since early March.

Obviously, some stocks have done exceptionally well over this period while certain others have lost value. Who were the big winners and losers among the Moneylife sample? Hawkins Cookers was trading at Rs180 on 28 February 2008. It is now at Rs904—an appreciation of 403%. The trickle-down effect of government spending on various social schemes, especially among semi-urban consumers, and higher salaries under the Pay Commission boosted the sales of pressure cookers, among other items. TTK Prestige (up 324%) is also a big beneficiary of this.

Genesys International Corp and Solvay Pharma India have surged 397% and 375% respectively over this period. Abbott India’s open offer to acquire Solvay Pharma in 2009 drove up its share price to stratospheric levels.

Sabero Organics Gujarat has zoomed 356% on the back of strong product offerings and a growth in the fertiliser and agri-products industry. Vinati Organics (up 298%) and Sudarshan Chemical Industries (up 271%) have also witnessed rapid price appreciation.

Among the other gainers are Relaxo Footwears (up 331%), Hindustan Tin Works (up 270%), and McLeod Russel India (up 237%), thanks to a sharp rise in tea prices along with B&A (up 205%), another tea company. Hyderabad Industries (up 257%), has also benefited from increased spending on roofing thanks to the trickle-down effect of various social schemes and increased government expenditure.

Even in a year when the indices have shot up 100% and stocks are up 300%, many scrips have crashed. The majority of the companies that have seen a sharp fall in share price in this period have been plagued by poor governance and gross mismanagement. Foremost among these are Northgate Technologies (down 97%), Pyramid Saimira Theatre (down 96%), Indage Vintners (down 95%) and Vishal Retail (down 93%). Among the other losers are Quintegra Solutions, Gremach Infrastructure Equipments & Projects, Prajay Engineers Syndicate (down 92% each), Asian Electronics (down 91%) and Indus Fila (down 90%).


NHAI should speed up to meet daily 20 km target: Fitch

The ratings agency has said that the pace at which projects are being awarded as well as the actual execution should be stepped up even further

Fitch Ratings today said that the National Highways Authority of India (NHAI) will have to step up the pace of awarding and executing projects if it has to meet the target of laying 20 km of roads daily, reports PTI.

While the ratings agency noted that there has been improvement in these areas of late, it called for a further speeding up of the process.

Referring to the government’s acceptance of the BK Chaturvedi Committee recommendations on NHDP (National Highways Development Programme), it said that the move has increased the pace of awarding projects from December 2009.

“These are encouraging signs; however, to achieve the daily target to construct 20 km of roads, the pace at which projects are being awarded as well as the actual execution has to step up even further,” Fitch said.

It also cautioned NHAI against private sector counterparty claims and said that they could lead to additional burden on resources requiring rework on finances.

“Additional burden on the entity's resources may stem from private sector counterparty claims that are currently locked up in various dispute redressal processes,” Fitch said. “These claims may necessitate a rework of NHAI’s financing plans.”

Fitch also expressed concern over limited participation of private players in the highways development programme.

“Limitations on the private sector's capacity to participate in the highway development programme could impose added financial strain on NHAI.”

Fitch, however, maintained its ‘AAA’ ratings—the best risk within a country—of NHAI as well as its Rs 8,000-crore long-term debt programme.

“Fitch Ratings has today affirmed the national long-term rating of NHAI at 'AAA(ind)' and its Rs80-billion long-term debt programme at 'AAA(ind)',” the agency said in a statement.

It noted that against a planned issue size of Rs4,000 crore in the financial year 2009-10, the authority has received subscription of Rs902 crore as of 20 March 2010.

It said that during 2010-11, NHAI plans to issue bonds worth Rs4,000 crore.
Fitch said that its ratings factor in substantial support NHAI has received in the form of fuel cess and grants from the government.

Fuel cess is a major component of NHAI's finances and in FY'10, it constituted 84.7% of NHAI's total finances at Rs7,400 crore, representing an increase from 43.3% in FY’06, it said.

The ratings agency also pointed out that NHAI will need stable policies and continuity of senior management to be able to meet its ambitious targets. It said, “Frequent policy changes and lack of continuity of senior management in the past have caused NHAI to under-achieve its physical targets, and in Fitch's view stability on both of these factors would be necessary in order to bring NHAI's ambitious plans and targets to fruition.”

NHAI is an autonomous body, set up to develop, maintain and manage national highways.


When I was in college, I used to tell my friends, my office will be running in three shifts and everybody used to laugh

For Hafeez Contractor, India’s best-known architect, it has been a long struggle to make it...

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