The information being discounted is that against a general expectation of a marginal profit for the first half, ACC is likely to report a profit of Rs 23 crore. For the first quarter, the company reported a profit of Rs 8 crore, almost doubling the second-quarter profit to Rs 15 crore. When compared with the profit earned in the second quarter of the previous year, the earnings growth will be even more startling, as that quarter's profit was barely Rs 3.5 crore. The earnings growth rate will also look much better in thesecond quarter.

As far as judging the stock is concerned, at the time of its first-quarter results, the stock was quoting at Rs 1,600. Thereafter, it fell on expectations of a worse earnings performance. The present price is just over half of that figure.

Still under a cloud: Despite the improvement in earnings expected, there cannot be a serious or lasting change in sentiment for either ACC or the cement sector for that matter. A few days after the announcement of its intent to spend huge sums on road projects and the fallout on the cement sector, there is skepticism regarding the ability of the government to pull it off, or its financial and organisational capability to do so. Doubts are also being expressed about coherence within the government regarding the manner in which the buyback announcement was made and the path that the government will choose to introduce the buyback provisions. The positive sentiment in the market is hinged to a large extent on an ordinance being issued right away.Delay in issuing the ordinance, or if there is an announcement regarding introducing the amendment in parliament when the winter session starts in November, can result in a retrenchment in values in a number of stocks.

ICICI Bank: This is one of the few bank stocks that was expected to do very well in the second quarter of the current year. But it has disappointed. To some extent, its performance mirrors the other results that have been announced so far. The first off the block with its quarterly results was HDFC Bank, followed by Jammu & Kashmir Bank and then State Bank of India, where there has been a marginal improvement in the profits earned in the second quarter over that earned in the first, and a robust growth rate in profits for the first half, compared with the corresponding previous year's first half. However, in the case of ICICI Bank, the profit earned declined in the second quarter, compared with the first quarter. Even the profit growth for the first half, as compared with thecorresponding period last year, has been poor at 7 per cent.

The basic trend being seen is similar for these banks, with interest spreads being squeezed, but a large growth in business volumes enabling them to report higher net interest. ICICI Bank has not reported much of a growth in other income, but the other banks have. As expected, there has been an increase in provisioning for the first half, and ICICI Bank has provided for more than half of the provisioning it expects it will have to provide for the full year. Provisions and contingencies (which also includes a provision for taxation) rose to Rs 10.84 crore in the second quarter, against Rs 4.72 crore in the first quarter. Cumulatively, growth in provisions and contingencies for the first half has increased by 40 per cent over the same period last year.

Undoubtedly, it is this higher level of provisioning that brought down its profits for the second quarter, but the provisioning position should be better in the second half. By then, it will be theother banks like SBI that will be making higher provisions in the second half.