The Hindu Business Line : Select buying lifts Essel Propack

A group of investors is accumulating Essel Propack on expectation of improved financial performance and inorganic as also organic growth. According to market sources, the company this quarter is likely to report better profitability due to two main reasons — passing on raw material cost increase to the customers and better management of currency fluctuations. Commissioning of the Poland laminated plastic tube manufacturing plant last month and the expansion of medica l devices facility in Singapore in July are also seen as positive for next few quarters. The company’s plans to acquire 10 per cent stake in each of the two sick RAS Group companies with substantial management control are seen in positive light. The joint proposal, with the existing promoters of the two units, is before the BIFR. Once cleared, the move would give Essel access to additional capacities for tubes and laminates in the country. One of the two units also exports to Sri Lanka and Iran. A company spokesperson broadly confirmed the developments. He, however, clarified that full effect of capacity expansions including the new units would be felt in the first quarter (January-March) of 2008.

On Thursday, the BSE 500 counter attracted substantial volume on both BSE and NSE. Though it could not hold on to the intra-day gains and closed 3.5 per cent down at Rs 59, in the last one week, the stock has improved by over 23 per cent.

Jayanta Mallick

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