Overnight Digest: Five stocks to watch out on February 12

The five stocks that may witness some kind of significant movement on Feb 11 in the markets are: Dr Reddy, State Bank of India, Union Bank of India, Bank of India and BEML. 

a) Dr Reddy’s: Dr Reddy's is mulling a buyback of equity shares. Saumen Chakraborty, President and CFO, said “they will be making a proposal to the board on February 17 and as per listing obligation and disclosure requirement they have notified to the stock exchanges. With regards to USFDA concerns, he said the company has given a comprehensive response to the warning letter of December 7 and given an update on progress of remediation in last week of January.

b) State Bank of India: State Bank of India (SBI) reported disappointing Q3 FY16 number on earnings front, standalone profit falling 61.7% year-on-year to Rs 1,115 crore on higher provisions. Profit was supported by lower other income. Gross non-performing assets (NPA) increased 95 basis points QoQ and 20 bps YoY to 5.1 percent and net NPA rose 75 bps QoQ and 9 bps YoY to 2.89% in Q3. Provisions for bad loans shot up 82.3% sequentially and 49.2% year-on-year to Rs 7,949.4 crore in Q3.

c) Union Bank of India: Union Bank of India’s Q3 FY16 profit plunged 74% year-on-year to Rs 78.5 crore, dented by higher provisions and lower net interest income & operating profit. Asset quality worsened in Q3 with gross non-performing assets (NPA) rising to 7.05% from 6.12% QoQ and 5.08% YoY and net NPA climbing to 4.07% from 3.39% QoQ and 2.95% YoY. Union Bank said “slippages stood at Rs 3,409 crore for the quarter against Rs 1,931 crore in preceding quarter, adding restructured accounts as on December 2015 were at Rs 20,917 crore”. Provisions for bad loans shot up 186.2% sequentially and 45.3% on yearly basis to Rs 1,237.7 crore due to additional provision.

d) Bank of India: Bank of India has posted a massive loss on yoy basis of Rs 1,510 crore in quarter ended December 2015 against profit of Rs 173.4 crore impacted by higher provisions and lower net interest income. Bank of India said “provisions shot up 128% year-on-year and 11.3% sequentially to Rs 3,604 crore in Q3”. Asset quality was very weak with gross non-performing assets (NPA) rising 163 basis points quarter-on-quarter and 511 bps year-on-year to 9.18% in Q3. Net NPA increased 94 bps QoQ and 275 bps YoY to 5.25% during the quarter. Gross NPA jumped 22.2% QoQ & 118.8% YoY to Rs 36,519 crore and net NPA surged 21.3% QoQ and 98.6% YoY to Rs 19,978 crore in quarter ended December 2015. 

e) BEML: BEML has reported a standalone net profit of Rs 3.10 crore for Q3 FY16 on the back of higher income from operations. “The company had posted a net loss of Rs 11.42 crore in the corresponding quarter of the previous fiscal”, it said in a statement. The firm's total income from operations increased to Rs 763.52 crore, over Rs 576.89 crore in the year-ago period. BEML operates in three major business verticals for associated equipment manufacturing - mining and construction, defence and rail and metro.