The Hindu Business Line : Weak denim price pares Arvind Mills

ARVIND Mills, a textile company, is on a downward move. On Wednesday, the stock fell 5.54 per cent at Rs 93.70 on the BSE with volumes of 12.44 lakh shares; on the NSE, it closed at Rs 93.65, down 5.69 per cent with volumes of 3.94 lakh shares.

Dealers said the fall in the stock price is due to drop in denim prices. The price of denim has dropped by 7-10 per cent in the last few months and further fall is expected due to the increased domestic capacity, which goes up by 50 per cent in the next 15-18 months.

On the other hand, an increase in cotton prices, a raw material for Arvind, is likely to put further pressure on the company's profits.

On these concerns a foreign broking firm has downgraded the stock to sell.

Realty plays positive

PRAJAY Engineers Syndicate, a construction and hospitality company, was locked in the 5-per cent upper circuit on Wednesday. The stock closed at Rs 91 with volumes of 3.23 lakh shares. Dealers said there has been buying interest from select investors. This buying is due to the company's housing and hotel projects coming up in Hyderabad.

The talk is that the big trigger for the stock would be three township projects on 40 acre land to be started in second quarter of 2006. Dealers expect that this would give a big boost to the company's revenues and bottomline in 2007.

These projects are eligible for 100 per cent tax deduction, leading to saving in income-tax. Moreover, the appreciation in the value of land is another positive for the stock. The company is also planning to construct two hotels in Hyderabad and this would also add to the revenues and profits.

Gains on new order

ICSA India, a company providing technology for power sector, has been in the limelight in the last few weeks. The stock has risen 68 per cent in the last one month. On Wednesday, the stock rose 5 per cent to close at Rs 623.95 on the BSE with volumes of 72,807 shares.

Dealers said the growing interest in the stock is on the expectation of huge growth potential for the company's products in the power sector. The recent order from Sudan's National Electricity Corporation, which involves design, supply, construction and commissioning of transmission lines for a total 514 km, is seen as positive for the stock.

Virendra Verma

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