The Hindu Business Line : Textile machinery on turnaround path

THE textile machinery sector, which had not been doing so well over the past year and half or so, seems to be back on the revival path. Market sources maintain that such a trend would augur well for stocks such as Lakshmi Machine Works, India Card Clothing etc.

Analysts say the first positive trigger for the sector has been the announcement allowing duty free import of second-hand machinery. While there is no denying that the euphoria over the prospects for the textile industry in 2005 (good order flow, capex etc), analysts caution that one should not view it as a passport to profits. Post-quota regime will see price of products drop initially and an increase in competition. However, there is a consensus in that this would result in machinery being upgraded to suit international requirements. Sources maintain that India's knowledge of textile machinery could open doors for exports to other countries in a big way. Needless to say given that it is an industry leader, LMW is touted as one of the major beneficiaries of the growing optimism in the sector. LMW ended the day at Rs 7,215 with around 150 shares traded on the BSE.

Bank of Rajasthan gains on consolidation talk

Rumours of consolidation saw the counter of the Bank of Rajasthan surge on the bourses on Friday. The stock ended the day at Rs 36.25, up 11.54 per cent, with around 32.50 shares traded on the BSE. On the NSE, the stock closed at Rs 36.30, up 12.21 per cent, with around 32.35 lakh shares traded.

Yet analysts feel there is no merger story here. Industry sources maintain that it is more of a turnaround story. With the bank having cleaned up its balance sheet, it is reportedly on the growth path.

ITC in thick of action

Courtroom drama apart, the counter of ITC Ltd continued to rule in positive territory with a confident market aligning itself to a favourable ruling. A moot point to note is that even though the Supreme Court had recalled its judgment minutes after the pronouncement on Thursday, the stock closed almost 4 per cent higher on that day. Needless to say, Friday's trend remained positive and the stock ended the day at Rs 1,104.45, up 5.92 per cent, with around 4.9 lakh shares traded on the BSE.

On the NSE, the stock ended at Rs 1,105, up 6.04 per cent, with around 13.53 lakh shares traded.

Prior to this, ITC has seen a pre-budget rally on expectations that the Government would not hike excise duty on cigarettes.

Deeptha Rajkumar

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