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Deeptha Rajkumar

KOCHI, Jan. 10

IPCL has been witnessing an upside on the bourses in the recent past in anticipation of a turnaround in the petrochemical sector. The stock, which was quoting around the Rs 78 levels in the first week of this month has since risen to Rs 83.

"The petrochemical sector is expected to bounce back. There is every indication that it will turn significantly positive in the short term and say peak around 2005. Typically, there is overcapacity in the global markets where supply comes in `bunches' but demand takes time to pick up. We expect an improvement in margins," a broker said.

The stock ended Friday higher at Rs 83.20 on the BSE, up 4.33 per cent with around 6.25 lakh shares traded. On the NSE, the stock closed at Rs 83.30 up 4.39 per cent, with around 7.72 lakh shares traded. Of the traded shares, 38.29 per cent was presented for delivery on the BSE and 44.93 per cent on the NSE.

The Securities and Exchange Board of India has also cleared the stock for trading in the futures and options segment, a factor that may have impacted the price trend today.

One section of the market is of the view that ever since the change in management, there have been significant improvements in the overall functioning of the company. "The new management is more efficient which has resulted in increased productivity. One can expect it to post better than average results this quarter," a fund manager said.

According to analysts, there has been a significant amount of restructuring at the company level in terms of interest, debt, distribution and supply chain. This has resulted in significant costs cuttings and savings for the company.

Technical analysts are of the view that given the lack of liquidity in this stock, no major selling is expected at this counter. "A large chunk of shares are held by very few people. As such one does not expect any major selling at this counter. This in itself has firmed up sentiment at this counter," sources said.

Even though the market at large appears to be bullish on the stock and is confident of the company reporting good performance, sceptics are of the view that it is too early to say so. "The company is still to show performance so one should not take things for granted," a leading broker said.

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