Market Wrap, December 9: GCPL's weak commentary takes a toll on equities; 286 stocks hit 52-week high

In its mid-quarter update, GCPL said that the demand conditions in India have been subdued for the past few months. The company further said that the surge in palm oil and derivatives prices to the extent of a y-o-y increase of 20-30% has impacted the soaps category, which represents ~1/3rd of its standalone business revenue. 

"To partly offset the cost increases, we have taken price increases, reduced the grammage of key packs, and reduced various trade schemes. Such pricing actions typically have minimal impact on category consumption but do result in reduced inventory across wholesale and household pantries. Historical patterns indicate a normalisation in volume growth following price stabilisation, which we anticipate occurring in the next few months," the statement read.

GCPL also said that the current inflationary environment has created pressure on the margins. "The company maintains its commitment to strategic investments in media and other areas like rural van distribution, etc. despite these challenging conditions. However, due to the confluence of factors discussed above, we anticipate a temporary downward breach of the normative margins this quarter," GCPL said.

The above comment had a rub-off effect on other FMCG names, too, which slid quite sharply in the trade. The BSE Fast Moving Consumer Goods index ended at  20,762.45, down 1.93%. 

At close, the S&P BSE SENSEX stood at 81,508.46, down 200.66 points, or 0.25%, while the broader NIFTY50 index ended at 24,626.25, down 51.55 points, or 0.21%. 

Top gainers & losers on the NIFTY50 index

Of 50 constituents, 32 declined and 17 advanced. 

Buzzing Stocks

Shares of Godrej Consumer Products (GCPL) tumbled as much as 10.81% to ₹1,102 apiece on the BSE on Monday, December 9, after the company issued a weak commentary on its business. The stock ended at ₹1127.90, down 8.72%. Other FMCG stocks, too, saw a sharp fall. HUL shares ended at ₹2400.45, down 3.37%, while Dabur India slipped over 3.17% to ₹506.95. Marico shares settled over 4% lower at ₹607.20 apiece on the BSE. 

The stock ended at ₹3404.45, up 10.10%. 

The stock drew heavy demand from buyers as the company, during the weekend, announced the receipt of two additional large orders in the USA, one each for HSAW and HFIW pipes, for the supply of coated pipes for natural gas pipeline projects. 

The scrip ended at ₹802.65, up 1.67%. 

Market Statistics

As many as 4,240 stocks traded on the BSE on Monday. Out of this, 2,296 advanced, and 1,774 stocks declined, while 170 scrips remained unchanged. 

286 stocks hit 52-week highs on the BSE, and 20 stocks hit their 52-week lows. 

Further, 523 stocks hit their upper circuit limits, and 214 scrips touched their lower circuits.

Sector Watch

Industrial and capital stocks were the biggest sectoral gainers on the BSE. 

The BSE CAPITAL GOODS index ended at 73,601.80, up 1.08%. 

On the contrary, besides FMCG, auto, healthcare, and banking stocks also ended in the red.

Shares of pharmaceutical companies engaged in contract development and manufacturing fell on Monday, December 9, after the United States softened its stance on the Biosecure Act.

Divi's Laboratories, Suven Pharma, Syngene International, Neuland Labs, and Laurus Labs are among the companies affected by the recent development.

Five Chinese-linked biotechnology firms won a reprieve on Saturday when negotiators on a key defense bill decided not to include legislation blacklisting the companies from new federally funded research and contracts, said a Bloomberg report.

Broader Market

The BSE MidCap index ended at 47,821.82, up 0.32%, while the BSE SmallCap index ended at 57,313.61 levels, up 0.46%.