Financial Daily from THE HINDU group of publications
Friday, May 28, 2004
Financial Daily from THE HINDU group of publications Friday, May 28, 2004 |
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Markets
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Stock Markets Himatsingka Seide gains on retail initiatives Deeptha Rajkumar
Mumbai , May 27 BACKED by its retail initiative in the domestic market, the stock of Himatsingka Seide has been gaining strength on the bourses in the recent past. The stock, which was ruling at around Rs 312-Rs 313 levels on May 19 has appreciated by almost 7 per cent to its current levels of around Rs 335 (NSE). The company, which had a 100 per cent export focus, is now looking to aggressively ramp up its presence in the domestic market via its branded stores — Atmosphere — across the country. Industry sources said that the company plans to open five more stores over the next two months in Gurgaon, Pune, Bandra and Bangalore. Analysts maintain that their domestic initiatives have prompted many to take a re-look at the stock. Touted as a steady performer, the counter, which is quite illiquid given its large promoter shareholding, has also been witnessing better than average volumes. Yet, commenting on the unprecedented volumes witnessed at the counter on May 26, dealers said it was more on account of inter-scheme transfer by funds. As per the grapevine, Birla MF and Principal have sufficient interest in the stock. A CLSA company report says that the company has also planned initiatives in the bed linen and upholstery segments. The company is looking at an accelerated growth in the next 2-3 years. "The company is likely to launch its upholstery fabrics (currently it is predominantly drapes and curtains) by the end of the current fiscal and has started developing products for the same. "Depending on the response, the company is likely to make a small investment in 30-35 looms. Upholsteries, which will be predominantly blended fabrics, will also be for the exports market, where demand should pick up after April 2005. "By FY06, the company plans to get into premium range of bed linens as well. Independent consultants are vetting the business plan presently." Analysts maintain that the company proposes to take forward its retail expansion from India to overseas markets such as Hong Kong, Singapore and Dubai. For this purpose the company is said to be looking at acquiring a distributor in the Western markets. "They are looking at setting up their retail business overseas. This will, at some level, also help them in offsetting in any loss in business which is but natural if they were to buy a distributor in the western markets," an analyst tracking the company reasoned. While a large section of the market is of the view that valuations at these levels look stretched, optimists maintain that a strong balance sheet and healthy return ratios add to the attractiveness of the stock. "We expect that from second quarter of FY05, the domestic sales will be about Rs 2 crore per month," said an analyst. However this does not take away from the fact that illquidity at the counter is a concern. The stock ended the day at Rs 335 almost flat with around 7984 shares traded on the NSE. On the BSE the stock ended at Rs 330 down 1.5 per cent with around 660 shares traded.
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