Financial Daily from THE HINDU group of publications
Friday, Dec 10, 2004
Financial Daily from THE HINDU group of publications Friday, Dec 10, 2004 |
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Markets
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Stock Markets Firm price trend in caustic soda propels Kanoria Chem
Jayanta Mallick
Kolkata, New Delhi, Dec. 9 A FIRM price trend in caustic soda and chlorine has improved the stock market chemistry for the Kanoria Chemicals stock. The stock today gained 10 per cent to close at Rs 92.40 on the NSE. Mr Ajay Todi, Senior Vice-President of the company, told Business Line that caustic soda prices have been ruling firm in the domestic market since October on increased demand form user industries such as aluminium, paper, power and soap. "We expect a further rise in the price for caustic soda in the local market, partly because of further price hike in the global market slated for January and partly because of rising demand", he added. The November delivery price for caustic soda, the money spinner of the company, shot up to Rs 23,000 per tonne against Rs 18,000 a tonne in August-September. "Though, currently it is hovering around Rs 22,000 per tonne, major European players, including Akzo Nobel, have begun to push the price line further for December and January deliveries. Generally, during this period supply shrinks internationally because of maintenance shut-downs also", Mr Todi explained. He confirmed that during the third quarter of the current fiscal, Kanoria Chemicals has seen a "significant rise" in margins as well as volumes. The fourth quarter also seemed promising, he added. According to Mr Milan Bavishi of Anagram Stockbroking, the caustic soda price, in fact, took an upturn from January this year from Rs 14,500 a tonne. Chlorine, a by-product, also witnessed better price realisation during the present quarter. The capacity expansion plan for caustic soda and a gradual technology shift for poly aluminium chloride (from mercury cell technology to cell membrane technology) would de-risk the chlor alkali business, Mr Bavishi felt. The on-going capacity expansion plan of the caustic soda plant (from 52,000 tpa now to one lakh tpa) is expected to be completed by October 2005. At today's price, the stock quoted at 10 times its annualised half yearly earnings for 2004-05.
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