Index Trends & Stocks in Action For 22nd May 2013

The Indian markets ended lower yesterday on heavy selling in realty, auto and healthcare stocks amid weak European cues. The Nifty ended at 6114, down by 42 points. It has formed a three outside down candlestick pattern, which is again a bearish pattern. Yesterday it closed below a crucial support level of 6120, which is a negative for the bulls. Going ahead, 6090 will act as a crucial support level and if it breaks 6090, it can slide down to levels of 6050 as well. Resistance on the other hand, is likely to come in at 6140 and 6180.

Somany Ceramics has reported a 19.85% rise in its net profit which stood at Rs 10.14 crore for the quarter ended March 31, 2013. It had posted a net profit of Rs 8.46 crore in the corresponding period previous fiscal. Higher net sales which rose to Rs 333.71 crore for the quarter under consideration against Rs 275.86 crore in the year ago period were primarily responsible for the good growth in net profit. Following these results the stock is likely to remain in action for some time now.

HeidelbergCement India, which recently was in focus for the reports which suggested that it is selling a minority stake to a private equity firm Bain Capital, has sold its cement griding facility in Raigad district of Maharashtra to the JSW Group. The stocks of both these companies are likely to ride this development and remain in focus.

JK Paper posted a good 88.66% increase in its net profit at Rs 20.98 crore for the fourth quarter ended March 31, 2013 against Rs 11.12 crore it reported during the same period previous fiscal. Net sales of the company rose to 383.28 crore for the fourth quarter, compared to Rs 356.78 crore in the same period last year. This kind of performance is certainly what the market wants to see from every company and hence the stock will remain in action at least for some time now.

Tech Mahindra reported a 25% increase in its consolidated net profit to Rs 377.24 crore for the quarter ended March 31, 2013. The consolidated income of the firm also rose by 34% to Rs 1,907.17 crore in January-March quarter of last fiscal against Rs 1,419.05 crore in the same quarter of 2011-12 fiscal. The stock will remain in action following this kind of a performance at least for a couple of days now.

Shares of LIC Housing Finance are likely to trade positive on the back of the latest report by Credit Suisse rating it an 'outperform' candidate. Credit Suisse has set a 12 month target of Rs 365 which would give a 30% upside from the current prices. According to the MNC broker, easing of interest rates will benefit the company as housing loan demand will rise. The March quarter result of LIC Housing Finance was also good where it reported a 25 per cent growth in its net profit to Rs 316 crore. The stock will continue to remain in focus following these developments.

Zicom Security Solutions has reported an 18% growth in its top line to Rs 82 crore in the fourth quarter of FY13. Its net profit has increased by 44% to Rs 2.13 crore. The company has reported lower finance costs, which have translated into expanded net profit margins. The stock is expected to show some positive movement today.

Shares in the power sector are expected to trade with a positive bias over news that the CERC has asked the power ministry to amend the Electricity Act 2003 to contain the changes in the regulations in coal producing countries. The apex electricity regulator has also asked for an amendment of the bidding guidelines which is one of the main causes that some power producers are facing problems in raising tariffs.