Though the 30-share Sensex of the Bombay Stock Exchange (BSE) has managed to conquer yet another psychological peak of 20K on Monday, the rally was mainly confined to top 6 stocks, which contributed over 90% in this 1,000-point rally from 19K to 20K.
Among these top 6 stocks, L&T, ICICI Bank and RIL have emerged as the real cheerleaders in this 1,000-point rally, which together commands a total weightage of 33.96% in the Sensex. Other three star performers in this rally include Tata Steel, HDFC and Reliance Communication (RCom). L&T belonging to the capital goods sector has surged by Rs 862.25 or 25.24% during this period to last close at Rs 4,277.45.
Market experts opine that L&T with its large outstanding order book position is providing investors with long earning visibility. L&T has posted a profit after tax of Rs 3,480.20 million for the quarter ended September 30, 2007 an increase of 72.95% when compared to Rs 2,012.20 million for the quarter ended September 30, 2006. Recently, L&T has bagged four contracts valued at Rs 452 crore for projects in Andhra Pradesh. Likewise, ICICI Bank has gained Rs 152.7 or 13.92% to close at Rs 1,249.40 while RIL belonging to the Oil & Gas sector went up by Rs 163.5 or 6.13% to end the day at Rs 2,827.65 from October 15 to October 29, the period during which Sensex travelled from 19K to 20K. ICICI Bank has reported a robust 33% y-o-y growth in profit after tax for quarter ended September 30, 2007. Market experts opine that with interest rate peaking out and Indian financial sector in a strong growth trajectory, stock of ICICI Bank is a good long-term bet for any investor.