The Hindu Business Line : Mahindra Ugine turns active

Operators turned active today in Mahindra Ugine Steel Co counter even as the stock went ex-dividend (final recommendation 25 per cent; total 45 per cent) from Wednesday. According to market sources, the BSE Smallcap stock attracted much higher traded quantity than its fortnightly average on the BSE as operators began mopping up at current lows. The stock finished at Rs 97, up over 4 per cent, on the NSE with a volume of 61,551 shares and on the BSE it gained over 3 per cen t to close at Rs 96 with a volume of 79,781 shares. On January 25 this year, it had created its 52-week high at Rs 145. As recent industry reports suggest that demand for alloy/special steel is likely to remain strong in India and China in the next few years on the back of strong demands from automotive sector, Mahindra Ugine, a player with value addition capability (Uttarakhand stampings unit recently started commercial production), increasing capacity (to expand its capacity to 2,40,000 mtpa by the end of this fiscal) and a largely secure intra-group and local market, is considered a growth long-term bet.

According to analysts, the company has also begun to enjoy full effect of merger of Pranay Sheetmetal Stamping with it. “Earnings growth of the company is expected to in the region 30 per cent year on year”, said a sector analyst.

Promoters hold 55.53 per cent in the company. Among the institutional investors are HSBC Global (7.13 per cent), HSBC Financial Services Middle East (3.63 per cent) and Merrill Lynch Capital Market Espana (1.88 per cent) of the Rs 32.48 crore paid up capital.

Jayanta Mallick

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