Vedanta rejig to spur trade in group stocks

Suresh P Iyengar K.S. Badri Narayanan | Updated on November 15, 2017

Reorganisation plans announced by the $11.4-billion Vedanta Group may lead to hectic activity in the Sterlite Industries, Sesa Goa and Cairn India counters this week. The record date for the merger is expected to be announced in five to six months after receiving approvals. The newly formed Sesa Sterlite will be well-equipped to face current operational challenges with the financial flexibility. It will have an annual revenue of Rs 66,000 crore and interest outgo of Rs 4,000 crore. The financial performance of Sesa Goa has been affected by the recent mining ban in Karnataka, high export duty, flattering demand, besides environmental and logistic issues in Goa. The company's net profit fell by 35 per cent to Rs 692 crore in the December quarter. Similarly, Sterlite Industries, which has recently come out of a court battle to keep its factory operational in Tuticorin in Tamil Nadu, has reported a 10 per cent decline in net profit at Rs 284 crore due to fall in copper prices. The Madras High Court recently ordered closure of the plant over environment issue. The company challenged the order in the Supreme Court and has won a reprieve.

Sales figures to drive auto stocks

Automobile stocks such as Tata Motors, Maruti Suzuki, Hero MotoCorp, Bajaj Auto and TVS Motor generally react to monthly sales data. Companies mostly announce sales figures on the first or second day of the month. Automobile firms push sales during February ahead of the General Budget. But this time, the Budget has been postponed to March 16, due to five State Assembly elections. As some expect the Budget to increase excise duty on automobiles, particularly on diesel cars, sales figures in February may go up.

StanChart IDR may see action

The only listed Indian depository receipt of Standard Chartered Bank may see some action this week as the bank is coming out with its full year results on February 29. The IDR returned just 7 per cent this year so far, even as Indian banks on the BSE and NSE have delivered stellar returns. Currently, the IDR is ruling well below the issue price of Rs 104. The London-headquartered bank makes bulk of its earnings in Asia and other emerging markets.

Will railway stocks gain speed?

Railway stock such as Kalindee Rail Nirman, Titagarh Wagon, Kernax Microsystems, Stone India, BEML, and Texmaco Rail & Engineering may see some buying interest ahead of the Railway Budget, on expectations that the Government may dole out some benefits to the sector. Usually, punters bet on these stocks ahead of the Railway budget and book profits after the annual exercise. The Railway Budget is scheduled to be presented on March 14. However, with the Railways facing cash crunch, this time the expectation on the sector will be moderate.

Published on February 26, 2012

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