Stocks In Action: October 23, 2012

The shares of capital goods giant L&T may extend their gains after the company reported handsome September quarter earnings, beating the street estimates. L&T reported 42 per cent rise in net profit to Rs 1,137 crore. Excluding a one-time gain, its net profit stood at Rs 915 crore, still ahead of the market expectations of Rs 876 crore. The order inflow was strong at Rs 20,967 crore. Yesterday the stock gained by over 2 per cent at the time of closing and we expect the positive momentum to continue in today’s trades as well.

The shares of Hero Motocorp may show volatility today as the company will report its September quarter earnings. The company had reported dismal numbers in the September quarter and hence one may witness a decline in the numbers. The market expects Hero Motocorp to report revenues of Rs 5,200 crore and a 23 per cent decline in net profit to Rs 465 crore. Investors should keep these numbers in mind. If the company beats these figures, there may be a rise in the stock price. The management’s guidance is also important and hence if the company maintains a negative outlook, the market may respond negatively too.

The shares of Bajaj Auto may see some gains on the back of the management’s guidance of 30 per cent rise in the volumes. The management is however keeping a sluggish outlook on the two-wheeler segment. We expect some positive movement in the company’s shares.

The shares of Cairn India may shed some points after the company reported 39 per cent quarter-on-quarter decline in its profits. Analysts had expected net profit of Rs 2,770 crore for the September quarter. It also posted a foreign exchange loss of Rs 786 crore against a gain of Rs 866.3 crore during the corresponding period last fiscal. We expect a fall in the share price of the company in today’s trades.

The shares of SAIL may decline on the back of the recent comments of the steel minister Beni Prasad Verma who yesterday said that he was not happy with SAIL and RINL due to their “unsatisfactory” performances. He also said that both the firms could have done much better if their plans had been executed on time.