Financial Daily from THE HINDU group of publications
Friday, May 24, 2002
Financial Daily from THE HINDU group of publications Friday, May 24, 2002 |
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Markets
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Stock Markets Electrosteel gains on hopes of better show Jayanta Mallick
KOLKATA, May 23 IN a choppy market, the Electrosteel Castings stock has been moving up in the last three days. It closed at Rs 226.80 on the Bombay Stock Exchange, up by 3.09 per cent. On the NSE, it closed at Rs 226.90. The combined volumes in the both exchanges, however, were lower than the two-month average volumes. "The recent uptrend is a combination of two factors — technical correction and expectation of better results for FY 2001-2002 compared to the previous fiscal. The result is expected to be announced within a fortnight," Mr Ajay Jaiswal of Lohia Securities observed. The scrip touched its 52-week high on May 15 at Rs 270.50. It also rode a rally between February 25 and March 1, rising from a level of Rs 140 to around Rs 196 on the eve of the Budget on the BSE. A Kolkata bull is known to lend support to the scrip from time to time. During the last quarter, the stock figured prominently as the top holding in one of the Franklin India's funds. The stock had clocked a record volume of 1.32 lakh shares on the NSE on March 1. Its average combined volumes in the last month on both BSE and NSE were around 14,000 shares. The EPS of the Electrosteel for the FY 2001-2002 was Rs 44.64. According to a dealer at the domestic brokerage firm, the EPS for 2002-2003 is likely to be Rs 62.44. The company has posted a 6-per cent growth in net profit at Rs 50.9 crore (Rs 47.9 crore) in the first nine months of 2001-2002. The positive factor for the company was its acquisition of Lanco group's DI pipe producing unit and blast furnace in March this year at a cost of Rs 35 crore. This had given a virtual monopoly to Electrosteel in the domestic DI pipe market and provided it an extra edge in the exports market also, the dealer said. Recently, it has set up a Rs 14-crore DI fitting plant with a hot metal producing unit. However, these investments would start yielding significant results later in this fiscal. "We expect operating margins to increase by 270 basis points next fiscal," according to the dealer.
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