Scrips in 3 sectors set scorching pace

The performance of three sectors""hotels, transport and communication, which pushed the gross domestic product (GDP) growth rate to 8.4 per cent in the second quarter of the current financial year""is in sync with their performance in the stock market.

A study of the representative segments""hotels, automotive and telecommunication service providers over the last one year, shows that the appreciation in scrip prices range between 75 per cent to 390 per cent, far in excess of Sensex, which clocked in a growth of 73 per cent, the highest in a calendar year in the last twelve years.

In the hotels segment, returns from the Hotel Leela Venture stock is up 307 per cent, followed by ITC Hotels at 187 per cent, Asian Hotels at 178 per cent. Indian Hotels Company moved up 137 per cent during the one-year period.

In the automotive segment, Eicher Motors lead the race at 299 per cent. Ashok Leyland up at 199 per cent, Tata Motors 179 per cent, Bajaj Auto 123 per cent and Hero Honda gained 75 per cent.

The telecommunication rally is spearheaded by Bharti Tele-Ventures, which appreciated 390 per cent. Tata Teleservices (Maharashtra) gained 284 per cent.

Rushabh Seth""head (equity funds), Kotak Mutual Fund, in his report has mentioned that one of the advantages for Indian businesses is improving infrastructure critical for sustaining long-term growth.

Analysts said that the appreciation in share prices of these sectors is primarily because foreign institutional investors pumped in money in these sectors realising its growth potential.

A report indicated that India is the most preferred market for foreign funds followed by Taiwan and Thailand.

The impressive tunraround in the economy, which grew at more than 8 per cent in the second quarter, was possible due to an 11.9 per cent growth in trade, hotels, transport and communication, which accounted for 26 per cent of the GDP.

However, there were exceptions in the scrip performances of these sectors. Some of the stocks appreciated but, not more than Sensex.

In the hotels segment EIH was an exception. The scrip appreciated 62 per cent in the one-year period. In the telecommunications segment the exception was VSNL, which gained only 58.76 per cent.