India Equity: State Refiners, Deccan Chronicle, SKS Microfinance
The following companies had unusual price changes in India trading. Stock symbols are in parentheses and share prices are as of the 3:30 p.m. close in Mumbai.
The Bombay Stock Exchange Sensitive Index, or Sensex, advanced 308.23, or 1.7 percent, to 18,518.81. The BSE 200 Index increased 1.6 percent to 2,285.46.
Oil refiners: Bharat Petroleum Corp. (BPCL IN), Indian Oil Corp. (IOCL IN) and Hindustan Petroleum Corp. (HPCL IN) rose after they were raised to “neutral” from “reduce” at Nomura Holdings Inc., which said further “downside” may be limited following the fall in the shares. The brokerage increased Bharat Petroleum’s share-price estimate to 620 rupees from 425 rupees, and raised its forecast for Indian Oil to 365 rupees from 240 rupees, analysts led by Anil Sharma wrote in a report. They lifted the price estimate for Hindustan Petroleum to 380 rupees from 270 rupees.
Indian Oil, the biggest state-owned refiner, added 2.4 percent to 352.85 rupees, Bharat Petroleum, the second biggest, rose 3.5 percent to 666.05 rupees, and Hindustan Petroleum, the third biggest, climbed 2.7 percent to 400.5 rupees.
Deccan Chronicle Holdings Ltd. (DECH) jumped 8.3 percent to 76.55 rupees, most in more than a month, as investors judged the 19 percent drop in less than two weeks may have been excessive.
“It may be a valuation play today,” Chitrangda Kapur, an analyst with Angel Broking Ltd. in Mumbai, said by phone. “The stock hasn’t reacted to any positive news recently, including a buyback” at as much as 180 rupees apiece, she said. Angel has a “buy” rating and a stock price-target of 120 rupees.
Eveready Industries Ltd. (EVRIN IN) plunged as much as 11 percent to 43.3 rupees, and traded at 45 rupees, down 7.6 percent, the most in almost two years on concern profit margin at India’s largest maker of batteries may be eroded as price of zinc, a key raw material, increases.
Kolkata-based Eveready said yesterday profit in the quarter ended March 31 plunged 96 percent and sales fell by 10.3 percent after an increase in price of batteries depressed demand for the product, according to a statement on the company’s website. The average price of zinc, which accounts for about 17 percent of raw material costs, rose by 9.4 percent in the quarter from a year earlier, the company said.
Glenmark Pharmaceuticals Ltd. (GNP) gained 3.4 percent to 285.85 rupees. The drugmaker’s unit settled a litigation with Nycomed ASA and signed a license agreement to sell a generic version of Cutivate lotion by March 2012, according to an exchange filing.
GVK Power & Infrastructure Ltd. (GVKP) rose 1.8 percent to 22.8 rupees, the most in three weeks. The company’s unit that operates the Mumbai airport has submitted to the regulator details of development fees collected at the airport, Yashwant Bhave, chief of the Airports Economic Regulatory Authority of India, said in New Delhi.
Henkel India Ltd. (HNKL) increased by its daily 4.9 percent limit to 35.2 rupees. Jyothy Laboratories Ltd. (JYL) , the consumer products maker, agreed to acquire 50.97 percent of Henkel India, according to a statement to the Bombay Stock Exchange. Jyothy will make an offer for an additional 20 percent stake in Henkel, the statement said.
Jyothy slid 0.6 percent to 221.95 rupees.
National Fertilizers Ltd. (NFL) gained 1.3 percent to 102.65 rupees, the most since April 28. India’s government plans to sell a 20.4 percent stake in the state-run company through a follow on public offering, according to an advertisement in the Economic Times newspaper today. The state-owned company today invited bids from banks to manage the sale, the advertisement showed.
Shriram Transport Finance Co. (SHTF IN) surged 7.3 percent to 652.95 rupees, the most in almost five months, rebounding from a 25 percent drop over six days that drove the price- earnings ratio to the lowest since 2007.
“Any steep correction is a good buying opportunity in the case of a company like Shriram Transport, which is one of the best among the non-bank finance companies with good asset quality,” Ambareesh Baliga, chief operating officer at Way2Wealth Brokers Pvt., said by phone today.
SKS Microfinance Ltd. (SKSM) lost 20 percent to a record 331.8 rupees, on speculation the company may report a loss in three months ended March 31.
“The microfinance sector is still finding difficulties in raising resources,” Jayne Shah, an analyst at Avendus Capital Pvt. in Mumbai said in a telephone interview today. “The road ahead is not smooth for the sector.”
The company, based in Hyderabad, may report a loss of 23 million rupees ($513,000) in the fiscal fourth quarter, according to a median estimate of five analysts compiled by Bloomberg. The figure was calculated by subtracting the annual profit estimate of 1.79 billion rupees from nine month earnings.
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