Financial Daily from THE HINDU group of publications
Tuesday, Feb 22, 2005
Financial Daily from THE HINDU group of publications Tuesday, Feb 22, 2005 |
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Markets
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Stock Markets Eicher group stocks gain, betting on restructuring Our Bureau
Kolkata , Feb. 21 THE Eicher Ltd and Eicher Motors Ltd counters moved up today with good volumes on the bourses as the market factored in the positives from the business restructuring of the two companies. Mutual funds and FIIs reportedly picked up the stocks. While the Eicher Motors stock hit the 52-week high and closed with a 15.45 per cent gain, Eicher Ltd gained 19 per cent. Franklin Templeton, which has 6.9 per cent stake in Eicher Motors, recently upped its stake in Eicher Ltd to 5.5 per cent. According to dealers, the ongoing business restructuring among the group companies has attracted the attention of some players. After transferring the tractors, two-wheelers, engines and gears businesses from Eicher Ltd to Eicher Motors Ltd (EML), in another move, the group is transferring the automobile exports business of Eicher International Ltd to EML. This is expected to provide direct and indirect export related benefits to EML. According to a recent HDFC Securities report, the move will entitle EML for DEPB credit and the advantage of incremental margins in exports. According to Mr Milan Bavishi of Anagram Stockbroking, the transfer of business from Eicher Ltd to EML would help the latter in lowering its tax liability and enable it to borrow funds. "The addition of tractors, two-wheelers, and engine businesses would help EML to make its presence in most of the auto segments. "A broad product portfolio will help it also to achieve greater bargaining power over suppliers and customers." Mr Ajay Jaiswal of Lohia Securities said that the farm sector and the tractor industry were expecting positives from the forthcoming Budget. At today's closing price of Rs 317, the EML stock traded at 17.6 times the annualised of earnings of the first nine months of the current fiscal of Rs 18.
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