The stock of Reliance Industries is likely to react positively as the company has announced strong financial performance for the Sept-Dec quarter (it was declared after market hours on Friday). Several brokerages have raised the price target for the company after the earnings report. Reliance Industries’ net profit for the third quarter ended December 2012 grew 23.9 per cent from the year-ago period on the back of higher Gross Refining Margins, which stood at $9.6 per barrel. Meanwhile, the company announced the closure of the buyback window that ended on January 19, though some marketmen expected that RIL might seek an extension of the period. It bought back shares worth over Rs 3,900 crore from public shareholders through an about year-long share repurchase programme, achieving just about 38 per cent of the target.
Suspension script for Deccan Chronicle
Deccan Chronicle Holdings Ltd will be in focus this week as the National Stock Exchange has decided to suspend the stock from January 23 for its failure to comply with the provisions of the listing agreement. While the BSE removed the stock from its BSE-500 index, it is yet to decide on the suspension. The NSE said the non-compliance includes non-submission of shareholding pattern, corporate governance report under Clause 49, financial results under Clause 41 and reconciliation of the share capital audit report for the quarter ended September 30, 2012. In a communication to stock brokers, the NSE has said though it served notices on the company, it did not respond satisfactorily to the notices. According to June 2012 shareholding pattern, close to 40,000 retail shareholders hold 1.62 crore shares of Deccan Chronicle.
Shares of GVK Power and Infrastructure and Bhushan Steel may react negatively as the NSE suspended their trading from the derivatives segment from April 2013. "However, the existing unexpired contracts of expiry months January 2013, February 2013 and March 2013 would continue to be available for trading till their respective expiry and new strikes would also be introduced in the existing contract months," said the NSE in a circular on January 17. Traders will have to square off their positions, as open interest for GVK in futures contracts stands at over eight crore shares while that of Bhushan Steel at over 5 lakh shares.
UltraTech to keep cement stocks in focus
Cement stocks may remain in focus after UltraTech Cement, an Aditya Birla Group company, reported muted growth for the third quarter on Saturday. Net profit of UltraTech Cement dropped 3 per cent to Rs 601 crore (Rs 617 crore) due to a sharp increase in operational cost. Net sales, however, improved 6 per cent to Rs 4,857 crore (Rs 4,565 crore). The company’s cement sales were almost stagnant at 9.62 lakh tonnes against 9.61 lakh tonnes registered in the same period last year. This was in line with market expectation. Most brokerages had expected subdued earnings from cement companies in December quarter owing to weak demand, which had led to a correction in prices. Besides, higher diesel prices and electricity costs will impact operating margins, they had said. Since most of the cement stocks are ruling at elevated levels, the earnings report may check their progress at the bourses.