Stocks In Action: August 9, 2012

Tata Power has reported a 66 per cent drop in its net profit in the June quarter. The business saw a 24 per cent rise in the topline on the back of an increase in power generation and coal volumes. The realisations in the coal business were below expectations. The interest cost was also higher, which has bought the net profit down. We expect negative trades of the company on the bourses.

According to latest reports, Kingfisher Airlines has further cancelled 30 flights from Delhi and Mumbai due to a fresh strike by its employees in protest against the non-payment of salary. The management is expected to meet tomorrow to discuss the company’s financial position. We expect the stock to remain volatile with a negative bias. Any positive outcome from the meeting may give a positive spin to the stock but that remains doubtful considering that the company is close to absolute bankruptcy.

Oil India, post the market hours, reported its June quarter earnings. The results were above market expectations wherein its net profit rose by 9.5 per cent to Rs 930 crore. The street expectations of the net profit were in the range of Rs 820 crore. The topline was also up by 3 per cent to Rs 2,440 crore. We expect the stock to show a rise in the price.

After market hours yesterday Pantaloon Retail posted its June quarter earnings wherein it has reported a decline in its earnings in the core retail business. We may see southward volatility in the stock.

Tata Consultancy in its yesterday’s board meeting has reiterated the bright future of the company. We expect a rise in the share price in today’s session.

According to Business Standard, cement companies may go slow in terms of capacity expansions in the current five-year plan. According to industry experts, issues related to land acquisition, environment clearances, poor demand and inadequate supply of raw materials like limestone, coal and fly ash may hamper their expansion plans. We could see some negativity in the shares of the top cement firms in today’s trades.