The benchmark Sensex index is all set for re-constitution from Monday i.e. June 18 with the exit of yet another pharma stock Dr. Reddy's Labs. The stock has been underperforming the sectoral index since the year 2015. Earlier in December, Lupin and Cipla made an exit from the gauge comprising 30 top companies and were replaced Yes Bank and IndusInd Bank.
With the exclusion of Dr. Reddy's from the Sensex, the weightage of pharma sector in the index will decrease to the lowest since 2010. At the same time, as the scrip of Dr. Reddy's will be replaced by Vedanta, the weighting of metal sector in the Sensex will increase to 2.6%, which is comparably lower in comparison to the FY11 weightage of the sector of 8.1%.
The Sensex since its inception has been overhauled time and again in respect of sectoral weight in line with the underlying economy. While some of the sectors have lost their importance during the course others have gained ground. The brokerages hold the view that barring some banks including the likes of SBI, ICICI Bank and Axis Bank, the Sensex constituents will register profit growth of 24% for FY19.
So, with the restructuring, the weight of sectoral index from June 18 will be as below:
|Sector||Weight in Sensex|
|Oil and gas||10.5%|
Scrip-wise HDFC Bank leads the weightage parameter in the index with 11.8% followed by RIL and HDFC with a weight of 9.1% and 8.7% respectively.