Heard on the street: Kennametal India, Kotak Mahindra

Dividend payout triggers an 8 pc rally in Kennametal India

Uncertain market conditions seem to have prompted investors to take a selective investment approach, with many of them focusing on the companies offering attractive dividend yield on shares. Kennametal India is one such example where the company attracted good buying after it doled out a hefty interim dividend of 350% dividend for the current year.

The large payout triggered a major action in the counter, with the stock surging nearly 8% to Rs 652 on volumes of more than 20 times over the two week average on the BSE on Tuesday.

Analysts also feel that Kennametal India could be a potential delisting candidate, with the foreign parents holding a significantly large stake of 88.2% stake, which is marginally below Sebi’s delisting limit of 90%, in the Indian subsidiary.

According to brokers tracking movement in the stock, most of the investors preferred to take delivery of the shares to benefit from huge dividend. The delivery ratio, which is percentage of shares actually delivered in the market in relation to the total traded quantity, stood a healthy 64% on the BSE.

Contributed by Vijay Gurav


Traders build positions in Kotak Mahindra on growth hopes

Select mid-cap banking shares have been seeing some action despite concerns that rising interest rates may affect profitability of the banking sector in the near term.

The counters of a few banks like Kotak Mahindra Bank, YES Bank and Lakshmi Vilas Bank have seen interest pick-up in past few days, which, according to analysts, can be attributed to their positive quarterly earnings and better growth prospects.

For instance, Kotak Mahindra Bank has seen positive rollover in the June series of F&O contracts and has also seen a buildup of long positions in the counter. Analysts expect the bank’s standalone net profit to grow at 22% CAGR over FY11-13E.

Its net profit surged to Rs 248 crore in Q4FY11, up 32% on a QoQ basis and 22% on a YoY basis due to lower provisions during the period.

Contributed by Harish Rao