The Hindu Business Line : Alstom Projects India attracts attention

THE stock of Alstom Projects India Ltd gained sharply on Wednesday. According to dealers, the counter has attracted both retail and speculative interest. A few long-term investors reportedly made entries today.

The stock closed at Rs 141.7 on the BSE with a gain of around 7 per cent. The traded volume also showed over 5-fold increase on the major bourses. There was a block deal involving 11,428 shares on the NSE.

According to Mr A. Jaiswal of Lohia Securities, the stock is joining the rally relatively late in the power sector stocks.

According to Mr V.K. Sharma of Anagram Stockbroking, the stock at today's closing price traded at 10.9 times its trailing four-quarter earnings per share. "It is interesting to note that other players in the sector much higher price-earning multiples. For example BHEL has a P/E of 17.8 and ABB has a P/E of 25", he added.

Mr Sharma felt that the company is being positioned as the hub for various activities of the global group. "The second generation power reforms in India also provide additional growth opportunities for Alstom in the medium-to-long term," he observed.

According to stock analysts, the company's strong fundamentals and credible management style make the stock an attractive long-term bet.

The topline and bottomline growth prospect for the company has improved following Alstom group's decision to source some of its international R&D services, engineering and equipment (hydro power turbines and generators) from the Indian outfit. The local outfit is also gradually increasing its engineering including plant engineering and manufacturing capabilities, according to the management.

The company's order book recorded a decent figure of Rs 1,360 crore at the end of June quarter.