Financial Daily from THE HINDU group of publications
Sunday, Oct 27, 2002

Investment World
Port Info

Group Sites

Investment World - Commentary
Markets - Stock Markets

Encouraging trend in ITC, Grasim

Krishnan Thiagarajan

THE BSE Sensex touched a new 52-week low, closing below the 2900-mark this week. The bearishness which engulfed the stock markets was attributable mainly to selling pressure in heavyweights, with FII's remaining net sellers through the week and even domestic institutional investors.

The Sensex closed at 2875.53 points, 134.23 points (or 4.45 per cent) lower at the end of the week. As the earnings season gathered momentum, the earnings numbers from some of the heavyweights this week turned out to be a mixed one. While the earnings performance of Hindustan Lever, Mahanagar Telephone Nigam, Hindalco Industries and Videsh Sanchar Nigam were disappointing, the likes of ITC, Grasim Industries and Indian Rayon turned out to be fairly strong and encouraging.

As the overall macro-economic environment remained sluggish and there was no discernible direction in the disinvestment exercise, the markets appear to shrugged the positives and remained focussed on negatives. For Hindustan Lever, while the post tax earnings appeared to be in line with market expectations, the revenue growth fell short of expectations. In the case of MTNL, the drop in the national long distance tariffs and higher tax incidence led to the post tax earnings declining by 35.4 per cent to Rs 246.90 crore alongwith a decline in total income. VSNL, part of the Tata group, also registered a 33 per cent decline in post tax earnings as declining customer tariffs, lower settlement rates from international carriers and competition from other international long distance took a toll on its earnings.

The performance of the software service companies turned out to be a mixed one. The earnings performance of HCL Technologies, CMC and Mascot Systems were disappointing. While Satyam Computers recorded a decent sequential performance for the second quarter, a downward revision in its earnings guidance by 6-7 per cent contributed to sluggishness in the stockprice.

An unimpressive performance from HCL Technologies contributed to the stock suffering a massive hammering at the bourses. The stock declined by 25 per cent during the week. Indications by the company may record lower growth in its revenues and profits for the next two quarters on account of client rationalisation efforts further aggravated the negative sentiment in the stock.

Send this article to Friends by E-Mail
Comment on this article to

Stories in this Section
Indal: Smelt the metal

Construction: Much to build on
Shaky structure abroad
Laying the finance foundation
Building blocks of the world
Templeton India Growth Fund: Invest
Product differentiation: Greater clarity needed
Short-term flows dominate in September
Zurich High Interest Fund: Hold
Birla Advantage: Hold/Avoid fresh exposures
Acquisitions need more regulation
Zee Telefilms: Move out of the show
Clariant India: Hold/Buy on declines
Glenmark Pharma: Hold
TVS Motor Company: Hold/Buy on declines
HLL: Buy
Satyam Computers: Hold
Market-linked insurance plans — Have your cake and eat it too
Lower premium rates
What is rationality?
Tech stocks dominate
Covered call, put
Options guide
Futures guide
Beware of e-Gold
REC infrastructure bonds: No shocks
Drivesmart from ICICI Bank
Debit card from IDBI Bank
Kotak Mahindra Finance: Money in bank
`Outsourcing, right mix for offshore deals' — Mr Gerhard Watzinger, CEO, Mascot Systems
Encouraging trend in ITC, Grasim
ONGC may seek lower levels
Sustained weakness in HLL
MTNL down 10.8%
Nasdaq: Buoyant mood
NRI investments & provident fund: Dealing with NRI investments
Allahabad Bank: Unattractive
Decade of SEBI regulations — When will they start biting?
Secondary market — Sound structure, weak surveillance
Mutual funds: Expanding assets, shrinking options
Driven by domestic sales
It Adds Up!

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |

Copyright 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line