Fixing saga, stocks of India Cements go south
Spot-fixing allegations in the T20 league have left a wave of cold breath on the stocks of India Cements. Analysts say the company is caught in the midst of a double jeopardy of poor show of its March-quarter results announced on Monday and the possible links to fixing by their men at the top.india Updated: May 24, 2013 02:23 IST
Spot-fixing allegations in the T20 league have left a wave of cold breath on the stocks of India Cements. Analysts say the company is caught in the midst of a double jeopardy of poor show of its March-quarter results announced on Monday and the possible links to fixing by their men at the top.
N Srinivasan, the vice-chairman and managing director of the company, is also the president of the Board of Control for Cricket in India. His son-in-law Gurunath Meiyappan, is the team principal and CEO of the Chennai Super Kings and has been summoned for questioning by the Mumbai Police.The company announced its quarter results and soon after just before the news of spot-fixing in the T20 league surfaced. The Indian Cements stocks have tanked 17% at the Bombay Stock Exchange. On Thursday the stocks fell 4.5% to R 72.6, at the BSE (see graphic for weekly trend).
“The IPL issue is going to engulf the company to a large extent. Further the sector itself is not doing too well,” said an analyst working with a Mumbai-based brokerage firm.
“The stock prices have gone down largely because of disappointing quarter results on Monday. In addition the company made an unexpected announcement of diversification into infrastructure which caught traders by surprise. They have learnt lessons from past experience when diversified in shipping and burnt fingers,” said an analyst on condition of anonymity.
On Monday, the company alongwith its quarterly results announced its foray into infrastructure with water treatment related projects being undertaken in south India cities. Analysts tracking the segment claim the scope of this non-core venture will rise over time thereby leading to continued stress on the balance sheet of the company.
Further, the stock faced pressure as the company reported net profit of Rs 26 crore, down by 60% against the corresponding quarter last year. Net sales increased 7% to Rs 1,190 crore during the period.