Share markets in India are presently trading marginally higher. Investors are keenly awaiting US-China trade negotiation outcome.
Barring IT sector and oil & gas sector, all sectoral indices are trading on a positive note with telecom stocks and realty stocks witnessing maximum buying interest.
The BSE Sensex is trading up by 69 points while the NSE Nifty is trading up by 19 points. The BSE Mid Cap index is trading up by 0.5% while the BSE Small Cap index is trading up by 0.3%.
Speaking of Indian stock markets, note that the Sensex, BSE Midcap index and BSE Smallcap index have had differing degrees of volatility over past fifteen years.
But the returns from the three different indices are mostly in line since 2004. Rs 100 invested in any of these indices in 2004 would have yielded about Rs 700 by March 2019.
In fact, as we can see in the chart below, the gap in the compounded annual return of the Sensex and Smallcap index is less than 1%.
Difference in 15 year CAGR of Sensex and BSE Smallcap Index is Less than 1%
This shows that while small caps are a good place to look for big returns, blue chips can also offer you big returns over long time frames.
In fact, as per Tanushree, the best contrarian bets on such safe stocks could even offer you handsome three and digit returns.
Moving on, market participants are tracking Eicher Motors share price, State Bank of India (SBI) share price and L&T share price as these companies are set to announce their Q4FY19 results later today.
You can also read our recently released Q4FY19 Results: Vedanta, Ceat, ICICI Bank, Apollo Tyres, JK paper.
In the latest developments from the results corner, Asian Paints on Thursday, reported a dull performance in the March quarter. Consolidated net profit fell 1.6% year-on-year to Rs 4.7 billion. The company had posted Rs 4.8 billion net profit in the corresponding quarter last year.
Revenues came in at Rs 52.2 billion. Reportedly, rise in total expenditure also put some pressure on bottom line numbers. The figure jumped 15.7% to Rs 43.4 billion in Q4FY19 over Rs 37.5 billion in Q4FY18.
Consolidated earnings before interest tax depreciation and amortization (EBITDA) declined 2% to Rs 8.2 billion in March quarter. Margins stood at 16.4% as against 18.7%.
The board recommended a final dividend of Rs 7.65 per equity share for the financial year ended March 31. The dividend, if approved by the shareholders will be paid on or after June 28.
To know more, you can read the detailed Q4FY19 analysis of the company here.
Asian Paints share price is presently trading down by 1.5%.
Moving on to the news from the aviation space, shares of Jet Airways are trading 4% higher today on reports of a possible takeover by AdiGro Aviation, the aviation arm of the London-based Adi Group.
Reportedly, the company has reached out to Etihad Airways for a possible partnership to turn-around the debt-laden airline.
The firm will bid for 24% stake in Jet as it wants to avoid an open offer. Sources involved in the bidding process confirmed that the entity had submitted a bid but expressed doubt over its acceptance.
Earlier, it was reported that Adi Partners had submitted an expression of interest (EoI) along with promoter Naresh Goyal and a Delaware-based entity Future Capital. However, the consortium pulled out of the process as lenders were not comfortable with Goyal bidding for the airline.
In other news, Jet Airways' whole-time director Gaurang Shetty has resigned from the board and the firm due to personal reasons.
Also, Ministry of Corporate Affairs has recommended detailed probe into affairs at Jet Airways as recent inspections by Registrar of Companies (RoC) have found many discrepancies in books of accounts.
As per an article in The Economic Times, the Ministry of Corporate Affairs (MCA) last week submitted its report recommending a detailed investigation into the affairs of the company.
Here's an excerpt from the article:
- A lot of discrepancies have been found in the book of accounts which were recently inspected by Registrar of Companies (RoC), Mumbai. They were found to be in violation of certain provisions of the Companies Act. Many of the transactions relating to the fund movements are of suspicious nature which are unexplained.
In February, the Registrar of Companies had initiated inspecting the books of Jet Airways, almost eight months after the MCA directed it to probe allegations that the airline siphoned off money. MCA had called for RoC probe at the time when Jet Airways was delaying its announcement of its June quarter result.
This is not the first agency probing the cash-strapped airline. In September last year, income-tax officials had carried out a survey at the business premises of the airline based on specific information.
How this all pans out remains to be seen. Stay tuned for more updates.
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