Financial Daily from THE HINDU group of publications
Tuesday, Dec 31, 2002
Financial Daily from THE HINDU group of publications Tuesday, Dec 31, 2002 |
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Markets
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Stock Markets SKF runs strong on multiple triggers Jayanta Mallick
KOLKATA, Dec 30 SKF Bearings today saw sharp jump in volumes and decent price rise on the major bourses on multiple value triggers. On the National Stock Exchange, the stock recorded volumes of 6.72 lakh shares, up from last Friday's volumes of 2.32 lakh shares. Incidentally, the average daily volumes in the counter during the past two months on the NSE stand at around 1.14 lakh shares. On the Bombay Stock Exchange, volumes amounted to 3.49 lakh shares, up from Friday's volumes of 1.58 lakh shares. The deliverable ratio (percentage of deliverable shares to the traded shares) was modest; about 37 per cent traded shares were presented for delivery on the BSE and 47.64 per cent on the NSE. After touching the December high of Rs 48, the stock closed at Rs 47.25 (Rs 45.30) on the BSE. On the NSE, the stock finished at Rs 47.05 (Rs 45.25). In the last six sessions, the stock has gained around 10 per cent. According to Mr Arun Kejriwal, a market analyst, the main driver for the stock is its detachable warrant conversion, scheduled in June 2003. "Activity in the counter is growing as the six months' average of the market price (before conversion) is to be factored in at the time of conversion". The SKF warrant also gained sharply on the BSE. The warrant gained 15.43 per cent to close at Rs 92 (an all-time high). Improvement in the earning prospects is also driving the SKF Bearings stock, according to Mr Ketan Thacker of Anagram Stock Broking. Both Mr Kejriwal and Mr Thacker felt that SKF was an excellent turnaround story. In the Q3 this fiscal, it posted a net profit of Rs 7.37 crore against a loss of Rs 2.76 crore during the third quarter of 2001-02. The company's restructuring exercise has brought about reduction in staff cost and improvement in working capital cycle. The growth in auto sector sales during the current fiscal has helped SKF improve its topline and bottomline. Automakers such Tata Engg, Bajaj Auto and TVS Motor are its top clients. "SKF has formidable client base in the auto sector. Moreover, the company has recently developed a new business relationship with Tata Engg for supplying special bearings for Indica," Mr Thacker pointed. At the current market price, the stock is trading at 10.9 times its 9 months' annualised earnings of Rs 4.3 per share.
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