Tracking Sensex: L&T top loser this week

By Reuters Staff
July 26, 2013

By Aditya Kalra and Sankalp Phartiyal

The Sensex lost 2 percent and the Nifty slipped 2.3 percent in a tough week for stocks as Indian markets remained cautious ahead of the Reserve Bank of India (RBI) policy review on July 30.

The benchmark Sensex, which ended in the red for three of five trading sessions, touched a 2-1/2 year high during the week as consumer goods shares surged.

The rupee continues to be in focus as it hit a five-week high on Friday. The RBI tightened liquidity further on Tuesday to support the rupee and the central bank is likely to hold rates at its policy review next week.

Here are the top five losers and gainers of the week that ended on July 26:

LOSERS

Larsen & Toubro (L&T): India’s largest engineering and construction conglomerate was the worst Sensex performer of the week, with its shares losing 13.2 percent after June-quarter results disappointed markets.

The company warned of a tough road ahead when it reported a 12.5 percent fall in net profit on July 22, as a slowing economy continues to hurt. Shares in L&T fell more than 7 percent on results day and ended in the red in all but one trading session this week.

“Together with our continued concerns on slower revenue growth in the B&F (buildings & factories) segment, we remain worried on the company’s meeting its full-year FY14 revenue growth guidance of 15-20 percent,” Nomura said in a note.

Jindal Steel & Power: It was the third consecutive week of losses for India’s third-biggest steelmaker by market value. The stock ended down 9.75 percent in the week ending July 26, taking its losses for the year to 57 percent. Its performance history looks dismal as the shares lost 36.5 percent in 2011 and ended flat last year.

The company will consume 25-30 million tonnes of iron ore a year by 2015, three times the current volume, and source most of the raw material from abroad, its CEO told Reuters earlier this week.

Tata Steel: Metal stocks struggled during the week and Tata Steel ended down 9.2 percent, taking its losses for the month to 20 percent and for the year to almost 50 percent.

“Demand outlook remains weak … We cut our target price to 195 rupees,” Motilal Oswal said in a research note as it maintained its ‘sell’ rating on the stock.

Of the 48 analysts that cover the stock, 29 have a ‘buy’ or equivalent rating while 12 have a ‘sell’ or equivalent rating, Thomson Reuters data showed.

Hindalco: India’s No. 2 copper producer was also among the top five losers of the week with losses of 8.8 percent. The entire metals pack has been going through a rough patch in 2013, with the BSE metals index losing 37 percent so far.

“The fall in metals clearly suggests the sluggishness at the macro level or for that matter at the industrial level,” said Nagji K Rita, Chairman & MD, Inventure Growth & Securities.

The stock ended at 94.40 rupees on Friday and is not too far away from its 2013 low of 86.90 rupees on March 26.

Bharat Heavy Electricals Limited (BHEL): Shares of the company started the week on a negative note, falling 7 percent on Monday after rival Larsen & Toubro’s results hurt sentiment. BHEL lost 8.6 percent overall in the five-day period.

Analysts don’t appear to be optimistic about the stock, which has lost over 30 percent this year. According to data, 27 of 48 analysts covering the stock have a ‘sell’ or equivalent rating, while 12 have a ‘hold’.

However, the state-run company this week bagged two contracts worth 1.32 billion rupees from NTPC for executing two solar power projects in Uttar Pradesh and Odisha.

GAINERS

Hero MotoCorp was the top Sensex gainer of the week, adding 5.2 percent, as the company’s Q1 margins beat street estimates. Sun Pharma ended up 3.5 percent and Bajaj Auto rose 3 percent as the next best performing stocks of the week. Infosys and Bharti Airtel were also among the  gainers.

(You can follow Aditya on Twitter @adityayk and Sankalp @sankalp_sp)

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