The Hindu Business Line : LIC Housing building strong gains

THE counter of LIC Housing Finance is again on the buy list of several institutional investors. This is despite the company reporting not so encouraging financial results in the first three quarters. Market buzz is that the company is likely to issue its GDRs in the next few months, and this is unlikely to affect the company's return on equity.

According to dealers, the company is expected to grow by over 30 per cent in 2004-05 fiscal, and this will lead to increase in profits. Earlier, the stock had taken a beating due to provisions of around Rs 40 crore in the last fiscal. The talk is that a leading domestic broking firm has started recommending `buy' to the shares of the company to its clients. Several funds are understood to have bought shares of the company on Friday.

The stock price of LIC Housing Finance gained 6.09 per cent at Rs 197.65 on the BSE with volume of 1.22 lakh shares. On the NSE, it closed at Rs 197.15, up 5.01 per cent, with volume of 2.52 lakh shares.

Accretion on cost savings

AFTER witnessing sharp fall in the last month, the stock price of Samtel Color is being accumulated by a section of the market.

Dealers said the accumulation in the counter is on expectation of strong financial performance of the company in 2004-05. This is mainly due to the huge savings in cost the company is likely to make. Market talk is that the company may save around Rs 25 crore to Rs 30 crore in the current fiscal due to the restoration of CNG from GAIL (India) for its plant in Ghaziabad (Uttar Pradesh). The fuel is the major cost component in the company's operation.

This is likely to result in rise in the company's EPS by Rs 6-Rs 7. Other than this factor, several market players are also bullish on the company's overall business of colour picture tubes. The talk is that the company has started focusing on flat picture tubes and recently it added another production line for this. The impact of this is also likely to be seen in the current fiscal, dealers said.

On Friday, Samtel Color gained 11.28 per cent at Rs 49.80 on the BSE with volume of 65,894 shares, and on the NSE, it closed at Rs 50.15, up 11.07 per cent, with volume of 2.19 lakh shares.

Virendra Verma

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