The Hindu Business Line : Bharat Gears in focus on order buzz

THE stock of auto ancillary Bharat Gears remained firm in an otherwise volatile market on Monday, sparking off rumours of somepositive corporate announcement by the company.

The counter, which has appreciated by almost 26 per cent from around Rs 20.50 levels on May 3 to its current levels of Rs 26 plus, was the subject of some intense operator buying.

Dealers speculated that either the company is likely to bag a large order from its collaborator or its debt restructuring initiatives is beginning to yield results.

However, according to analysts, the debt restructuring benefits are yet to impact financials. "The other income was the main source of income for this quarter," said an analyst tracking the company.

Sceptics opine that there is very little to cheer with regard to the company. "It has no new export clients, its factories are operating at only 35 per cent of its capacity and they have a huge workforce with no money for VRS," said an analyst with a leading domestic brokerage.

As such there would appear to be no trigger for the sudden upsurge. Market sources said that what the company required was an infusion of funds or a very large export order. "The stock has performed in line with the boom in the auto segment. However, an upside from these levels looks difficult," said a broker. Bharat Gears clients include Ashok Leyland, Swaraj Mazda and M&M.

The stock ended the day at Rs 26.85, up 1.13 per cent, with around 28207 shares traded on the BSE.

On the NSE, the stock closed at Rs 26.95, up 0.56 per cent, with around 80,188 shares traded.

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