Raymond Scrip In Bear Grip

The Raymond scrip lost heavily at the major bourses during the week ended June 6, even as the indices soared on improved trading sentiment.

Raymond's poor corporate results, which saw its net profits falling from Rs 95.7 crore to Rs 8.9 crore came as a surprise to the market. Though Raymond is viewed as a fundamentally strong company, the closure of one of its textile plant in Madhya Pradesh hit the bottomline of the company.

The scrip closed at Rs 58.50 on the Bombay Stock Exchange, declining by Rs 8 over the previous week's close. At the National Stock Exchange, the scrip ended the week at Rs 59.50, down by Rs 7.30 over the previous week's closing price. After the results were announced in the market, the scrip immediately came under heavy selling pressure. It fell from Rs 60.75 to hit the lower end of the circuit filter at Rs 54.75 on the BSE. At the NSE, it was frozen at the lower end of the circuit filter at Rs 59.75.

 

On the last day of the trading week, the scrip plummeted to its 52-week low at the major bourses during intra-day trading.

The scrip touched Rs 51.25 on the BSE and Rs 56.80 on the NSE, but recovered to Rs 58.50 and Rs 59.50 respectively at close.

Apart from the plant closure, the company attributed the unsatisfactory results to the depressed steel and cement prices. Marketmen are sceptical of the Raymond scrip, which they feel will continue to slide in the days to come.

Said a dealer at a leading corporate broking house: The market was expecting poor results from Raymond because all the three core divisions of Raymonds - steel, cement and textiles have had a poor year. Also, with this scrip hardly a favourite on the FII buying list, an immediate turnaround in the scrip price seems doubtful.

Says Rajesh Kothari, analyst at Mafatlal Securities: It has been a bad year for cement, steel and textile majors as is evident from the poor results of Tisco and Century Textiles.

The cement and steel sector are expected to do well from the second half of the current year onwards. In which case, the scrip price could move up about six months from now. But in the short term, the scrip price could move sideways at the best.