Stock In Action 14th August 2012

According to media reports, Tata Steel yesterday post market reported nearly 89 per cent decline in consolidated net profit at Rs 597.88 crore for the June quarter 2012. The profit in the corresponding quarter of the previous fiscal was Rs 5,346.55 crore. Net sales of the company rose by 1.89 per cent to Rs 33,547.73 crore from Rs 32,925.68 crore in the April-June period of 2011-12. This is after the falling demand from the key Europe which accounts around 66 per cent of sales and production for the steel giant. On the back of this news one may see volatility with a negative bias in the share price of Tata steel in today’s trading session.

Yesterday, post the trading hours, the board of Rain Commodities approved a buy-back of its shares. The company has decided to conduct the transaction through through the stock exchange for an amount not exceeding Rs 46 per share subject to a maximum of 1.27 shares and a minimum of 0.31 crore shares. Yesterday the stock closed higher by 4.68 per cent at Rs 38 and there are chances that it may see an upward movement today also.

Coal India reported its June quarter numbers after the closing of market hours and the reaction to it would be seen in today’s trade. The company has posted a net profit of Rs 45,765.70 million for the quarter ended June 30, 2012 as compared to Rs 45,415.90 million for the quarter ended June 30, 2011. The total income has increased from Rs 48,508.80 million for the quarter ended June 30, 2011 to Rs 49,103.20 million for the quarter ended June 30, 2012. On the back of this one may see volatility in the share price of Coal India in today’s trading session.

According to Business Standard, those cement manufacturers who have been slapped a penalty of over Rs 6,700 crore for price cartelisation will have to comply with the order of the Competition Commission of India (CCI) within 90 days from the issue of the same. On the back of this news one may see volatility with a negative bias in today’s trading session in some of the cement stocks.

According to Business Standard, in big-ticket land deal realty major DLF has sold 17 acres of prime land in Mumbai to Lodha Developers for about Rs 2,700 crore, nearly four times higher than the price at which the company had bought this property seven years ago in 2005. DLF had bought the land from National Textile Corporation for Rs 703 crore. The company decided to sell this piece of land as part of its strategy to exit from non-core businesses. Further, the report suggested that the valuation of DLF’s land is lower when compared with Indiabulls’ deal in 2010 for 8.39 acre of NTC land for Rs 1,580 crore. On the back of this news one may see volatility in the share price of realty heavyweight DLF in today’s trading session.

According to media reports, the finance minister is pushing a divestment strategy and intends to target 15 sell-offs this fiscal with one sale in every 15 days to meet the divestment target of Rs 30,000 crore for FY13. Meanwhile, a cabinet nod for Oil India, MMTC, NALCO, Hind Copper and Neyveli Lignite is likely to be expected next week. Companies like SAIL, BHEL and RINL have already obtained approval for their stake sale. On the back of these reports one may see volatility with a positive bias in today’s trade in some of the above-mentioned PSUs.

For today, we have some of the major companies declaring their quarterly results, which could mean stock-specific movement. Watch out for stocks like Deccan Chronicle, Finolex Cables, Gammon India, Jain Irrigation, IDFC, Videocon, MMTC, Hindalco, HDIL, Unitech, Reliance Infra, Reliance Power and Shree Renuka Sugar.