Construction, sugar, FMCG ride FY06 rally

MARKET OVERVIEW 2005-06

The construction, engineering, capital goods, automobile, sugar, metals, services and FMCG sectors were clear winners on the bourses posting over 100 per cent gains in the financial year 2005-06.

Of the 119 sectors tracked by Business Standard Research Bureau, 41 sectors have increased their shareholders' wealth by over 100 per cent in the last one year while 40 others have posted gains between 50 and 99 per cent. Only six sectors eroded the shareholders' wealth while 32 sectors' market capitalisation appreciated between 11 and 49.9 per cent.

Of the 119 sectors, 113 reported gains in the range of 11 per cent to 300 per cent during the period. Only six industries -- grey casting, carbon black, financial institutions, domestic appliances, audio/ video, electric picture tubes and ferro alloys -- lost their market value between one and 37 per cent.

The market wealth of housing construction companies increased almost four-fold. The aggregate market capitalisation (m-cap) of 37 companies from these sectors appreciated 300 per cent, from Rs 2,867 crore to Rs 11,453 crore.

The ceramics tiles sector came back in the reckoning with a boom in housing construction. Twelve companies in the ceramics tiles sector have increased their shareholders wealth by 328 per cent.

Housing construction ranked second in the list, appreciating 299 per cent, followed by steel alloys (283 per cent), industrial gases (247 per cent), power cables (237 per cent), industrial explosive (221 per cent) and electrical switchgear (209 per cent).

Civil construction (189 per cent), electrical equipments (188 per cent), pumps and compressors (177 per cent), breweries (173 per cent), sugar (167 per cent) and engineering (157 per cent) sectors were among the big gainers in the FY06.

Notable among the other minor sectors having joined the FY06 rally were oil drilling (178 per cent), textiles machinery (175 per cent), retail (143 per cent), engines (142 per cent), decorative & laminates (119 per cent), transmission tower and leather footwear (112 per cent).

The year witnessed the personal care sector making an entry into the gainers list with 102 per cent appreciation. Infrastructure development also brought the cement stocks in the limelight with 100 per cent gains.

Another front-line industry that benefited from the bull run was automobile -- heavy and medium (112 per cent), two and three-wheelers (106 per cent) and cars (104 per cent).

The list of other sectors that made appreciable gains in FY06 rally included NBFC and domestic appliances (94 per cent each), steel tubes/pipes, packaging and textiles/spinning/weaving (90 per cent each), mining (89 per cent), food products, chemicals and refractory (88 per cent each), bearings and telecommunication (87 per cent each) and tea/coffee, electrodes and plastics (80 per cent each).

In absolute terms, information technology was the biggest gainer with the total m-cap of the sector rising by Rs 124,160 crore to Rs 369,358 crore. oil and exploration (Rs 1,88,256 crore), banks (Rs 2,55,092 crore), telecommunications (Rs 1,13,471 crore) and power (Rs 1,54,360 crore) sectors' m-cap gained over by Rs 50,000 crore each.

Pharmaceuticals, personal care products, cigarettes, petrochemical polymers, engineering and non-banking financial companies increased shareholders' wealth between Rs 30,000 and Rs 50,000 crore each.

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