The Hindu Business Line : Suprajit Engg to focus more on exports

THE stock of auto-ancillary Suprajit Engineering Ltd (SEL) has been marking spurts on the bourses in the recent past on sustained market interest amidst good volumes.

The stock has appreciated by 44.5 per cent from a low of Rs 164 as on 17 Dec last, to its current levels. The counter, however, lost momentum on Wednesday in keeping pace with the general market trend.

Fundamentals and expectations of good numbers for the year apart, the company's announcement of a stock split and a 1:1 bonus have added to the market interest. Analysts maintain that going forward, the growth trigger for the company will be exports.

It is the largest manufacturer of automotive cables and the main supplier to all the major two-wheeler manufacturers within the country.

The company also manufactures speedometers for TVS, Kinetic. Its clients include Hero Honda, TVS Motors, Bajaj Auto, Hyundai and LML.

Additionally, its acquisition of the Gujarat-based Shah Concabs a year ago has enabled it to cater to commercial vehicle manufacturers such as Tata Motors and Ashok Leyland.

When contacted, Mr Ajit Kumar Rai, Managing Director, Suprajit Engineering Ltd, told Business Line that the company intends to ramp up exports aggressively.

"We have a strong focus in Europe, particularly the UK, and that is how it is going to be for the next one year. We also have a presence in the US replacement market with two customers which should go forward in terms of volumes in FY04-05,'' Mr Rai said.

To this extent, the company is currently in the process of turning over one of its Bangalore units/plant into a 100-per cent unit only for exports.

"By end of the current fiscal, all business done at this unit will be strategically relocated to our other units,'' he said.

According to him, going forward, the company will grow at a much faster pace in exports than in the domestic market. "Over the next three years, we expect 15 per cent of the company's business to be exports,'' he added. Currently, exports are around 3 per cent of the company's business.

The stock ended the day at Rs 237.45, down 9.99 per cent with around 24,273 shares traded on the BSE. The stock is not listed on the NSE.

There are concerns, however, over the fact that the stock price had run up too fast too soon.