The Reserve Bank of India in a surprise move decided to have an off cycle MPC meeting to re access the macro economic situation prevailing in the country and check the evolving inflation growth dynamics. The Monetary Policy Committee voted unanimously on the 4 May meeting to increase the repo rate by 40 basis points to anchor in the inflation expectations and adopt a more prudent accommodative stance. Since the stock market does not like surprises, the indices dropped sharply below the key 55000 levels to see the worst week during the last five months. Therefore, the last week ending was not good for the Indian stock market with the Sensex losing 2225 points or 3.9% to close at 54835 levels while the other index barometer, the NSE Nifty 50 index dropped 691 points or 4.04% to settle at 16411 levels. Meanwhile, the BSE Midcap Index and the BSE Small Cap Index fell by 1288 points ( down 5.28% ) and 1519 points (down 5.31% ) respectively. Global factors are not supporting the markets around the world with most media news quite pessimistic and stagnation round the corner. FIIs and foreign portfolio investors have been selling since October last adding to the misery of the stock market. Retail investors and traders have to be very cautious in stock selection at this point of time. Analysts and fund managers are bullish on RITES Ltd and expect the stock to do well over the next one year time frame but investors should check from their consultants before buying the stock.
RITES Limited is a Miniratna (Category-I) Schedule ‘A’ Public Sector Enterprise established in 1974 and a leading player in the transport consultancy and engineering sector in the country. The company has a diversified services and geographical reach across India and abroad. It has an experience spanning 47 years and has undertaken projects in over 55 countries across the Asia, Africa, South America, and Middle East regions. RITES Limited is the only export arm of Indian Railways for providing rolling stock overseas (other than countries like Thailand, Malaysia and Indonesia). Tata Steel and Rites have recently entered into a memorandum of understanding to synergise their expertise to jointly explore integrated infrastructure services. RITES and Tata Steel would collaborate to offer services in the areas of railway rolling stock exports and enhance infrastructural capabilities for buildings, airports, urban engineering, and information technology. They would also explore capacity enhancement for urban mass rapid transport, including metro railway systems, for domestic and overseas markets. As part of the MoU, RITES would provide expertise in design, marketing, operation, maintenance and support required for tapping domestic as well as overseas markets. The New Materials Business (NMB) division of Tata Steel would undertake the development and manufacturing of customised products as per the clients’ requirements in coordination with RITES. The RITES share price is hovering around Rs 260 on the bourses and can be considered for portfolio investment.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.