Tata Tea, Hll Proffer Cups That Cheer
In the absence of any other event to look up to, the stock market anxiously awaited three important results yesterday: those of Tata Tea, HLL and ITC. Despite the better than anticipated results announced by two -- HLL and Tata Tea -- the market did not cheer up. The moral of the story seems that bourses take their own course, irrespective of the developments.
The ITC results turned out to be a wet blanket yesterday. Despite it showing an 18 per cent jump in net profits, the market was dejected and failed to be enthused. Players are of the view that the future course of market will be determined by how the ITC price moves next week. There is an interesting story on the run up to ITC's first quarter results. One of the leading domestic stock broking houses (which is turning into a merchant banking major) made some presentations with the US-based foreign fund. These presentations indicated excellent results for ITC, and in the process coaxed the fund to buy the stock. As is normal, there was some frontrunning as well. A day prior to the results, when the marketmen scaled down its expectations of ITC's Q1 bottomline to Rs 170 crore from the earlier figure of Rs 220 crore, the foreign fund seems to have decided not to make any investment. This reason was good enough for the broker to dump the stocks, which resulted in the stock taking a beating at the bourses. This was
also coupled with some selling by a leading Singapore-based fund. This fund is reported to have dumped over 2.5 lakh shares on Thursday: this dealt a heavy blow to ITC's stock price.
The first result to be announced was that of Tata Tea. It posted a net profit of Rs 39.1 crore showing a jump of 400 per cent, which was way ahead of what the market had expected. This helped improve the market sentiment and lifted the spirits a bit. A 32 per cent jump in net profit announced by HLL prompted a lot of fund managers to go scouting for this stock. It is reliably learnt that both US and UK-based fund managers were scouting for this stock. Thus one could see the stock price move up further in the next week.