Hind Copper

Yesterday, the stock price had hit a 52-week new low at Rs.65 and today also it remains in the red. The stock sunk, like MMTC did when the Govt announced divestment plans. Yesterday, the Empowered Group of Ministers' (EGoM) arrived at a base price of Rs.70 for its Offer for sale (OFS). The market was expecting the price to be at a much steeper discount, like the way it was in MMTC and thus today, the stock remains in the red but not butchered like the way MMTC is. The Govt is offloading stake to meet the minimum public holding requirement but this mode of selling stake at such cheap rates is at the cost of existing shareholders and this is keeping away investors away from such PSU stocks. In Hindustan Copper, the Govt currently has 94.01% stake and it is offloading 4.01% stake. In Nov’12, the company had sold 5.58% stake at an average price of Rs.156.56/share and the stock is currently at Rs.74. The OFS has opened today.

In terms of its financial performance, for Q4FY13, the company had a 29% (YoY) drop in net sales at Rs.415 crore and despite that, it ended the quarter with a net profit at Rs.188 crore, up 37%. This was thanks to the 11% decline in total operating expenses, an almost 4 times rise in other income and a tax write back of Rs.23 crore. For the fiscal FY13, the company’s net profit rose to Rs.355.64 crore, from Rs. 323.47 crore in 2011-12. Income was down to Rs.1,323.14 crore from Rs. 1,487.56 crore. At this point of time, PSU stocks, be it companies or banks hold no fancy for investors and traders alike. And like the way MMTC continues to figure out in the top losers list, day after day, this company too does not seem to have any immediate positive triggers.