Stocks in Action: December 11, 2012

Bharat Electronics Limited (BEL) said that it has signed a Memorandum of Understanding (MoU) with Israeli Aerospace Industries, wherein, both the companies would jointly work on the future of a Long Range Surface to Air Missile ship defence system project. This project is an over USD 500 million joint venture wherein BEL would function as the lead integrator and produce major sub-systems. This is likely to result in an upward movement in the stock price of BEL.

As per company sources, KEC International received orders worth Rs 612 crore in the last one month from a number of customers across the world in segments including transmission, power systems, cables and the water businesses. This takes the order book of the company to Rs 9000 crore. This strength in the order book combined with a robust inflow of orders is likely to result in an uptick in the share prices of KEC International.

Punj Lloyd has received an order from Singapore for the construction of a new prison headquarters. The order is worth Rs 528 crore which takes the backlog of orders received after September 20, 2012 to more than Rs 25900 crore. The new order, according to Business Standard, comprises of the construction of four buildings and several ancillary buildings, substantial earthworks with retaining walls, road widening and external work,. The stock price of Punj Lloyd is surely to witness an up move following this news.

ICRA said that tractor sales are expected to be subdued in Q2FY13 due to a dampened demand caused by weak monsoons. Tractors witnessed a negative YoY growth of 10.9% in Q2FY13 and demand continues to be weak as a result of high interest rates, inflation and rise in the prices of tractors. ICRA said that is expecting volumes to be flat (0-2% declines) for FY13. This would result in a slight downward move in the stock prices of Mahindra & Mahindra.

Wipro has been in the news for having added a USD 200 million contract in the telecom vertical, its acquisition of Singapore-based LD Waxsons and now the sale of its flagship brand Sunflower Vanaspati to Cargill. This is likely to add a tinge of volatility to the stock prices of Wipro today.

The government fixed the price of its 10% stake sale in NMDC at Rs 145 – 150 per share. The price band is at a discount to the LTP (last traded price) of NMDC which was Rs 154.75 per share. This is likely to result in a downward movement in the stock price of NMDC today.