The Hindu Business Line : Bonus hopes lift Gujarat NRE

GUJARAT NRE Coke stock is generating heat on the bourses following the announcement that the company's board meet on November 9 would consider issue of bonus shares and final dividend for the financial year to September 30, 2004. It had declared a 25 per cent interim.

The company has recently signed a pact to acquire an Australian coalmine. The acquisition would help the company in its forward integration into steel production.

Mr A.K. Jagatramka, Managing Director of the company, confirmed this to Business Line from Sydney. The company, a leading producer of metallurgical coke in the country, is going to commission new capacity in December that will take the capacity to over 1 million tpa.

According to Mr Gaurav Dua of Anagram Stockbroking, the company has a long-term agreement with BHP Billiton for 0.3 tpa, nearly 45 per cent of supply. It has also started importing coal from other sources as well. It is also considering setting up a 0.5 million tonne steel plant in Karnataka at a cost of Rs 250 crore.

For the first half, net profits jumped 521 per cent to Rs 63 crore. At today's closing price of Rs 110.25, the stock trades at 2.4 times its first half of FY-05 annualised earnings per share.

According to brokers, certain Kolkata-based operators are currently active in it. The stock reached its 52-week high at Rs 116.50 last Friday. The counter's 52-week low is Rs 51.75.

Mr Rajesh Agarwal of CD Equisearch said the counter has the history of sharp volatility and speculative activity. "Though fundamentals appear sound, long-term investors are little wary of sustainability of the growth," he observed.

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