Recouping lost ground...

The markets are still trading in red, though there has been a recovery in the past hour. It seems investors are adopting a cautious approach and are preferring to book profits at current level owing to concerns on inflation and high crude prices. Overall, the mood is bearish across sectors. Though select IT stocks are positive, largely the sector is in the red.

The BSE Sensex is trading at 6,164 (down 85 points) and the Nifty is trading at 1,931 (down 25 points). The rupee is trading at Rs 43.78 per US Dollar.

As per the business dailies, Tata Tea (TTTE.BO, news) is contemplating its entry in the iced tea segment with the launch of its ready to drink iced tea 'To life' in India and other countries. It has already introduced this brand in Europe. At present, the iced tea segment in India is at an evolving stage. It should be noted that HLL has already inked a tie up with Pepsi to markets its ready to drink iced tea product, 'Lipton'. Further, Tata Tea has announced its entry in the economy segment of 'leaf-tea' with the re-branding of its erstwhile brand 'Agni' as 'Tata Tea Agni.' It is planning to price it at a premium of 5% to 7%. At present it claims to have a market share of 5% in economy segment and expects a 100% growth with this launch. Further with this, it will have presence in all the segments of 'leaf tea' market. The stock is however down marginally.

Two-wheeler major Hero Honda (HROH.BO, news) announced its results last week. 4QFY05 results were disappointing as the post tax earnings fell by 2% YoY, though sales turnover increased by 16% YoY. Its operating margins have fallen from 17% to 15.1%. The main reasons for the same were increasing competition, rising input cost and additional promotional and publicity expenses. Though the prices of inputs have come down from the peaks, the pressure on margins is expected to continue in near future. Further it should be noted that there is a shift in consumer demand towards 125cc bikes against 100cc. Hero Honda doesn't have a significant presence in this segment. Though it launched Super splendor in this segment, there are fears that it may affect the sale of its star performer Splendor. Only time will tell how effective is Super Splendor in increasing its share in the 125cc segment. The stock is down nearly 2%.

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