The Hindu Business Line : TIL scales new peak on value buying

THE TIL Ltd stock has been scaling new peaks this month on focused mopping up by certain market makers. The stock today finished at its new 52-week high of Rs 135.20, up five per cent, at the upper circuit on a relatively lower volume of 13,055 shares against the last two weeks' average of 57,973 shares on the BSE.

According to market sources, the accumulation was primarily based on improving fundamentals of the company. However, the sources observed that the declining volume suggests the accumulation may have paved way for short-term distribution.

The stock has gained around 23 per cent in the last one week. The company has declared a dividend of 12.5 per cent for 2004-05 against 7.5 per cent in the previous fiscal.

According Mr Rajesh Agarwal of CD Equisearch, the increasing activity in the infrastructure sector in the past one year has buoyed up its order book position. The current order book position of the company is Rs 180 core, according to the management.

"Debt restructuring has also reduced its interest cost. All its borrowings have been renegotiated and the current effective rate for the company is around 4 per cent sub-PLR," Mr Agarwal pointed out.

In the operational front, a 7-year contract signed last year with Tata Steel for maintenance contract for its mining projects, growing equipment renting business and investment buzz in the mining and port handling sectors have been triggering growth for the material handling, earth moving and defence equipment manufacturer.

According to management sources, the company has made some headway in meeting certain specification and supplying some new equipment to defence establishments.

Industry sources maintain that going by the trend, the company may report over 60 per cent growth in topline and even higher bottomline growth this fiscal in view of better order execution and improved margins.

In crane segment, the company has reportedly established an edge over others in the domestic market in 30-plus-tonne capacity category providing an import substitution. The company's overall market share in crane business is understood to be around 80 per cent.

In certain other equipment segment, such as level laughing equipment, the company has claimed to have stolen a march over others in terms of technological upgradation and efficiency.

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