The Hindu Business Line : Sintex closes higher amid all-round selling

THE stock of Sintex Industries on Friday moved and closed higher amid all-round selling in the market. The stock finished 0.6 per cent up at Rs 111.25 with a little increase in the trading volumes on the major bourses.

The stock did not provide much of trigger for buying but dealers felt that some investors might have used it as a defence bet. The company's recent agreement with Containment Solutions Inc of US for licence, technology and equipment, has given it an edge in the manufacturing of fibreglass reinforced plastic storage tanks particularly for automotive oil and lubricants.

In view of increased domestic retail activity in the oil sector, Sintex's move appears timely and news on this front is likely to keep the stock warm.

In January, a section of investors had pinned their hopes on the unconfirmed news that the company was in the process of clinching supply deals for textiles from Pierre Cardin and Wal-Mart. However, in the absence of confirmation, the stock slipped from a height of around Rs 145. The textiles business accounted for around 27 per cent of the turnover. The counter's 52-week high is Rs 156.

The company reported a decent growth in bottom line and upped the dividend for the fiscal ended on March 31, 2004 to 30 per cent from 20 per cent in the previous fiscal. However, according to dealers, the improved earnings per share had been factored in when the results came in.

The counter, of late, has seen waning of FII interest. Foreign funds, including the US-based GMO Emerging Market and Batterymarch Financial Management, had picked up around 25 per cent stake during the third quarter of the last fiscal from Mauritius firm Indocean Ventures.

According to Mr Ketan Thacker of Anagram Stockbroking, at Friday's closing price, the stock traded at 5.02 times its 2003-04 earnings per share of Rs 22.14. The 2002-03 EPS was Rs 14.84.

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