Stock reports for the week of September 16 -24, from Axis Direct, HDFC Securities and more! Analyst pick of the week is Mold-Tek Packaging, which posted good Q1 results despite GST driven destocking, and whose growth plans have analysts excited.
Indian markets slumped today, with Asian markets down overall after North Korea threatened a hydrogen bomb test in the Pacific Ocean, in response to Trump's aggressive speech in the UN where he had said that fresh sanctions were planned against North Korea. Kim Jong Un called Trump mentally unstable and said that the country would respond aggressively.
Market breadth is sharply down. Of the 1718 stocks traded today, 389 were on the uptick, and 1274 were down.
The Golden Cross and Death Cross screeners saw some interesting additions in the past few days. A couple of stocks saw a Golden Cross (where the short term price average moves above the long term average, indicating momentum), including cement company Gujarat Sidhee.
On September 20, nine companies saw the Death Cross (which happens when the short term price average falls below the long-term), including Simplex Realty and Alembic Limited. Alembic however, saw its share price recover somewhat on high volumes today.
This week, Larsen & Toubro (L&T's) hydrocarbon division announced landing a pipeline contract worth nearly Rs 1,700 crore from the Kuwait Oil Company for the engineering, procurement and construction of a new crude transit line from North Kuwait to Ahmadi. But the company also said recently that its 2017-18 order target for its hydrocarbon business is under review, after domestic orders have slowed down post implementation of GST. Despite the Kuwait order, Middle East and international orders have overall slowed down.
L&T already witnessed a slowdown in the first half of this year due to demonetization and GST implementation. It has been hoping that the remaining quarters pick up the slack. The firm said that it is counting on project wins in markets like South Africa, where it is bidding heavily, to make up for the shortfall in the hydrocarbon business.
Research firm Credit Suisse has however, maintained an overall 'outperform' rating on L&T with an increase in target for its share price to Rs 1425, from Rs 1330 per share. CS estimates that L&T is emerging as a frontrunner for the Mumbai Transharbour Line project.
The maximum recovery screener identifies those stocks that have seen recent, rapid recovery from their year lows (Click on the last column, and you can also see maximum recoveries over the last year).
Among these stocks is recent overperformer Divi's Labs. The stock is rising after previous observations imposed by the FDA on unit 2 of its Vizag plant were "completed and resolved" by the Authority. This could potentially lead to a lifting of the import alert from its Vizag facility. The import alert had been imposed on the Divis Lab facility in March, and the FDA had issued another warning letter in May. This had limited Divi's exports to the US, and the FDA had also mandated random testing of all products imported from the plant.
Other stocks that have seen recent sharp recoveries include TV Today Network and Lakshmi Machine Works. Lakshmi Machine Works has been previously written about, as a key stock in superstar shareholder Nemish Shah's portfolio. For the full screener click here.
Mahanadi Coalfields, a Coal India arm, is staring at a Rs. 22,000 crore penalty in the face after the Supreme Court said that all mineral production carried out in violation of environmental laws is illegal. The Court has ordered the Odisha government to recover the value of all minerals produced illegally, or in excess of caps under environment, forest laws, pollution control rules and mining plans.
Overproduction by Mahanadi Coalfields in Odisha is the cause for the penalty. The share price for CIL has been falling since the news.
Issues of overproduction, pollution and quality of coal have been plaguing Coal India over the last several months. The company's coal on average, contains 45% ash, far in excess of the 25-30% that is ideal for efficiently burning fuel in thermal power stations. CIL has largely failed to invest in coal washing and similar techniques needed for cleaner coal burning.
The total compensation to be forked out by mining companies including Tata Steel and GMR in Odisha could well go beyond Rs 50,000 crore according to estimates. Tata Steel's chromite mining in Odisha also attracted popular anger, due to the pollution in the region, and Odisha's Sukinda valley was in the past identified as the fourth most polluted place in the world due to contamination of its soil and water from chromite mining.