Nov 27, 2008

Business - HUL back in top 10 m-cap ranking

Deepak Korgaonkar

Hindustan Unilever (HUL), the personal care giant, is back in the top 10 ranking in terms of market capitalisation (m-cap) after a gap of four years.

The company moved up two notches in the m-cap ranking from 11 to 9 as two public sector companies – National Mineral Development Corporation (NMDC) and MMTC — reported fall in their market capitalization. While the two PSU firms’ m-cap fell, HUL’s increased by 0.13 per cent, giving it a chance to enter the elite club.

The FMCG sector is back in the limelight with ITC and Hindustan Unilever featuring on the top 10 m-cap list after a gap of four years.

Name M-cap
Rs crore P/Eratio

1 Reliance Ind 178,971 11.68
2 ONGC 149,808 7.54
3 NTPC 135,474 18.14
4 Bharti Airtel 124,271 17.24
5 SBI 70,107 7.70
6 Infosys Techn 67,970 13.04
7 ITC 64,952 20.57
8 BHEL 63,596 22.06
9 HUL 52,208 27.26
10 TCS 51,572 10.05

Earlier, in August 24, 2004, ITC and HUL found place on the list with m-caps of Rs 25,928 crore and Rs 24,270 crore respectively. However, stocks of these companies underperformed the Sensex during the bull market with ITC gaining 235 per cent and HUL rising by 114 per cent between August 24, 2004 and January 8, 2008. During the same period, the Sensex appreciated by over 300 per cent.

In the current bear market, the FMCG sector turned the tide in its favour as the FMCG index declined by 23.3 per cent from 2,505.11 on January 8, 2008 to 1,920.85 on Wednesday. During the same period, the Sensex declined by 56.75 per cent from 20,873.33 to 9,026.72. HUL’s market cap moved up by 1 per cent, while ITC’s declined by 25 per cent during the same period.

Despite a fall of over 50 per cent in most of the frontline stocks from their January peaks, FMCG stocks have not dropped as sharply in terms of price to earnings (P/E) valuation. FMCG stocks are currently trading at a P/E of over 20 times as compared to the Sensex, which is trading at a P/E of 11.12 times.

No comments: