The Hindu Business Line : Spirit up for it

THE counter of liquor maker Shaw Wallace & Company stock has caught the attention of market players who had earlier taken position in the United Breweries (UB) stock.

Dealers said the interest in the stock of Shaw Wallace has developed on expectation that a foreign company is likely to pick up stake in it. There is also talk that the valuation of the company will be similar to UB.

Dealers said the stock of Shaw Wallace is still under-valued compared to UB and further upside is possible. On this expectation, several institutional investors have already bought shares of the company.

On Monday, the stock price of Shaw Wallace gained 5 per cent at Rs 171.40 on the BSE with volume of 2.70 lakh shares.

Shines on growth prospects

ENGINEERING company Larsen & Tourbo's stock has been on the rise over the last few days.

Dealers said several top broking firms are advising their institutional clients to buy the stock at these levels.

The main factor for the interest in the stock is the low equity base of the company.

The view is that due to a low floating stock, there is upside in the stock price even on small purchases.

Moreover, the market players are expecting a bonus issue in the company as it has large reserves.

Another reason is that infrastructure spending in the country will grow and major benefits of this will come to L&T.

On Monday, the stock price of the company gained 4.78 per cent at Rs 982.65 on the BSE with a volume of 3.22 lakh shares. On the NSE, it closed at Rs 979.80, up 4.14 per cent, with a volume of 7.22 lakh shares.

Party over advance tax

SEVERAL market players are still bullish on the stock market due to higher advance payment made by leading listed companies in the third quarter.

Dealers said top firms have paid advance tax, which is much higher than that in the third quarter last year. They said this indicates that most of the companies are likely to report higher net profits for the third quarter.

In this list are SBI (Rs 691 crore of advance tax against Rs 519 crore in third quarter of 2003), Tata Steel (Rs 560 crore against Rs 230 crore), Reliance Industries (Rs 139 crore against Rs 85 crore), Tata Motors (Rs 102 crore against Rs 25 crore), Hindalco (Rs 90 crore against Rs 48 crore), Bajaj Auto (Rs 90 crore against Rs 70 crore) and Colgate (Rs 22 crore against Rs 16 crore).

Virendra Verma

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