The Hindu Business Line : Several block deals in Jaiprakash Ind

THE Jaiprakash Industries stock today closed firm on the major stock bourses even as a majority of the stocks tumbled and strong apprehension of a bearish trend lurked.

According dealers, some of the market players used the counter for their defensive trading strategies.

The stock attracted several block deals.

It gained five per cent from its previous closing level.

On the BSE, there were three block deals involving 95,000 shares.

On the NSE, the stock recorded 14 bulk deals involving 1.7 lakh shares.

The delivery volume was at 4.9 lakh shares, representing 24.6 per cent of the total traded quantity in the counter on the NSE of 19.9 lakh shares.

Today, the traded volumes on both the major exchanges shot up significantly from levels witnessed in the last few trading sessions.

According to Mr Devarsh Vakil of Anagram Stockbroking, the market expected that the construction industry as a whole would do better in view of several infrastructure projects going on stream.

The sectoral stocks have been outperforming the market.

Being the one of the leaders in the pack (the L&T stock also performed well today), it attracted additional interest from the investors.

At the closing price of Rs 124, the stock traded at 18 times its trailing four-quarter earning per share of Rs 6.8.

Despite a 15 per cent fall in sales in the quarter ended on December 2003, the company reported a 23 per cent increase in the net profit, largely because of impressive 620 basis points spurt in margins.

"This is interesting as the whole industry has been witnessing a rise in income due of plethora of construction activity getting started, but a fall in margin (due of competition and increase in cost). The rise in margin for Jaiprakash is a positive indicator for the stock in the future," said Mr Vakil.