Sector performance: March quarter gainers and losers

We bring you an analysis of the major sectoral leaders and laggards for the March quarter

The Sensex has only marginally risen from its December quarter closing (17,465) to end up at 17,528 for the March quarter. However, for the past few weeks, the index has been chugging ahead at a fast pace. Some sectors were at the forefront of this rally while others have missed it altogether.

19 out of the 29 Moneylife sectoral indices have ended the March quarter in positive territory. Leading the pack is the cement sector, which has surged 17% over the December quarter closing. The acceleration in construction and infrastructure-related activity has resulted in strong demand for cement products.

Cement prices have shot up, giving a fillip to the top-lines of cement companies.
The consumer durables sector has also witnessed a sharp rally, rising 14% over this period. Higher disposable incomes through payment of arrears of the Sixth Pay Commission and NREGA payouts have boosted demand for consumer durables even in the rural sector.

Farm & farm inputs and non-ferrous metals indices have risen 12% each. In order to improve farmers’ conditions, agricultural inputs were relieved of the tax burden in the recent Budget.

Rounding up the top five is the auto components sector index, which rose 9% during this period. Automobile companies witnessed a spike in sales of passenger cars and two-wheelers that hugely benefited component manufacturers.

Among the laggards, the sugar index has witnessed a dramatic turnaround from last year’s rally, falling 24% over the past three months. A crash in sugar prices has spelt trouble for sugar companies. Many investors who bought sugar stocks near the peak of its record surge may be left licking their wounds.

The real-estate sector index has lost 13% of its value while the steel index has also tanked 8%. While property prices have slowly inched upwards, demand has not yet shown strength. With interest rates set to rise, the situation may turn worse. Steel manufacturers have had to contend with margin pressures following a surge in prices of iron ore, the main raw material in steel production.

Energy and oil & gas sector indices have also taken a beating, falling 6% and 4% respectively over this period.

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