Stocks In Action For 31st August 2012

According to business standard, The uncertainty surrounding coal availability has forced the country’s largest power producer NTPC Ltd to cut down its investment size by a fourth or around Rs 50,000 crore. The company had planned to invest more than Rs 2 lakh crore during the five-year period ending 2017. On the back of this news one may see volatility with a negative bias in shares of NTPC in today’s trading session.  

As per media reports, the government yesterday said that state-run BHEL has proposed setting up another manufacturing unit at Sakoli in Maharashtra. The manufacturing plant is proposed for meeting the requirements of fabricated assemblies of boilers, turbines, etc for power plants. The process of land acquisition has started and production from the unit would commence within 24 months from the date of land acquisition. The company has various manufacturing facilities spread across the country, including Haridwar, Ranipet, Bhopal, Bangalore, Hyderabad, Trichy, etc. The project will take time to get implemented and we may not see any major impact in the short term. Therefore the scrip may not witness any movement today.

According to Business Standard, Rashtriya Chemicals & Fertilisers plans to spend Rs 4,000 crore over the next three years to expand its urea production capacity at the existing plant at Thal in the western state of Maharashtra. The state-run company, which is the third-largest urea maker in India, has started the process to secure feedstock and get environmental clearance for the project, it said on Thursday. The expansion will include setting up one single stream ammonia plant of 2,200 tonnes per day capacity and one single stream urea plant with 3,850 tonnes per day capacity. On the back of this news we may see some positive momentum in the stock today.

State Bank of India (SBI) has embarked upon a special campaign to ramp up its home loan book. It is going to reduce the processing fee for home loans to Rs 1,000 per loan irrespective of the size. The offer would be made available from September 1 onwards. The management has further stated that it has got some surplus funds after the RBI cut the statutory liquidity ratio by 1 per cent to 23 per cent. These funds would be used in expanding its retail business. The bank is aiming at 20-25 per cent growth in its home loan portfolio.

The shares of Hero Motocorp fell by 1.3 per cent to Rs 1,820 yesterday after Credit Suisse downgraded the stock to ‘neutral’ from ‘overweight’ and cut its target price to Rs 2,056 from Rs 2,401. The investment bank cites caution about the company’s near-term outlook given an expected slowdown of sales in the domestic two-wheeler market, though the stock is still favoured on a medium-term basis. For Hero Motocorp, almost the entire growth in dispatches since January has been a function of its building inventory. Hence, with little scope for further inventory increase, the dispatches will track retail volumes and remain weak. We may continue to see some pressure in the stock today as well.