Stock In Action 26th October 2012

Crompton Greaves may witness some buying of shares today as investment bank Goldman Sachs has upgraded it to ‘buy’ from ‘neutral’. The bank has also raised the target price to Rs 155. This is on the back of its better prospects arising due to the domestic orders and margins. It also said that the company would benefit from restructuring of the state electricity boards.

The shares of utility vehicle and farm equipment maker Mahindra and Mahindra may show gains in today’s market after its results yesterday. The company reported a 22 per cent jump in its net profit to Rs 902 crore. Its net sales were up 33 per cent to Rs 9,659 crore in the September quarter. Its utility vehicle sales rose by 32 per cent to 62,751 vehicles and it currently has a market share of 45.4 per cent.

The shares of Kingfisher Airlines may show some strength after the 26-day lockout was resolved yesterday. The company’s management has agreed to pay dues of the four months’ pending salary to the striking employees by December. The employees have decided to resume work with immediate effect. Yesterday its shares showed gains after several low sessions in the wake of the DGCA having suspended its license.

The shares of Kalyani Forge may decline today after the company reported a decline of 12 per cent in net profit. The total revenues were flat at Rs 73.10 crore. The margins also seem to be under pressure which may prompt investors to sell the stock.

The shares of pharma company Fresenius Kabi may remain low after the company reported a decline in its sales as well as profit. Its formulation as well as bulk drug revenues declined which will be perceived negatively by the investors.

Investors should also watch out for the shares of Firstsource Solutions as a Kolkata-based CESC has proposed to acquire a 49 per cent stake in this company. Yesterday the stock was up by nearly 8 per cent.

Asian Paints will also show good gains after having reported 17 per cent growth in its sales in the September quarter. Its net profit grew by 14.6 per cent to Rs 239.2 crore. The board has also recommended a dividend of Rs 9.50 per share to the shareholders. We expect positive movement in its shares.