Cement Stocks may loose and Bhel will shine bright !

BHEL has announced amazing results this evening and following that the stock is an out performer in the stock. BHEL is planning to spend 3200 Crore to increase its capacity, Plans on to enter Nuclear power plant set up in association with Allstom. Plans to generate 15000 MW power in the current fiscal. It is on tie up with Reliance on rigging operations. BHEL has an excess outstanding order to the value of Rs.55,000 Cr. and this fiscal it announced a 48% increase in its net profits. This is a stock to watch for now and a recommended buy as the stock shows a good one to hold on a medium to long term basis. The BHEL stock gained Rs. 100 today as the market reacted to the news

Cement Stocks are taking a great thrashing and the latest on this sector happens to be that the CVD has been removed from import of cement thus making the imported cement much cheaper and attractive than the local cement producers like ACC, Ultratech, Grasim, Ambuja, Dalmia so on . Analyst say that the cement that can thus be imported with these rates will be Rs. 30 cheaper than local cement. This move by the government follows as a result of steps to curb inflation rates in the economy. This is one of the list of steps taken by the government to keep check on the inflation as along steps like these….

  • Increase in CRR making the liquidity more dearer now.
  • Removal of quota on sugar exports thus boosting agriculture  
  • Taking a tough stance on realty IPO’s and stocks to keep check on land prices

In the news from the auto stocks, Carlos Ghosn, CEO, Renault and Anand Mahindra, CEO, M&M unveiled the Logan at Rs. 4.8 lacs for the petrol version and the diesel version at Rs. 5.45lacs. Only time will tell if Logan is going to replicate the success that it has in the European markets again in India. M&M is currently quoting at the levels of Rs. 743 and the next few days can see if we are in for some good news in this stock. Initial bookings on the Logan to start in 2 weeks at 10 cities across India.

Hershey’s come visiting to India to take a 49% stake in Godrej foods and this will be a great step in the F&B segment. I will be writing more about this as the deal unfolds. As to my favorite sector IT tread with care as all these companies are due to announce their results in the course of this fortnight and there are so many factors that are of great concern. There has been a slowdown in the IT scenario in US market, companies in a bid to keep up the figures are making foray in newer markets like Europe, Scotland and south America. Secondly Rupee is very strong against the dollar so this might reflect unfavorably in the earnings. Two nights back in Bangalore I was exchanging notes with Raj Datta, GM of Knowledge initiatives of Mindtree quoting that Africa is one of the untapped markets where there is sizable potential for all these IT growth.

Investors beware the market has not bottomed out yet . What appears as a small comeback of 160 pts today is a small bounce back , but appearances can be so deceptive as I feel the bear hug is still gripping the market.

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