Financial Daily from THE HINDU group of publications
Sunday, Oct 03, 2004
Financial Daily from THE HINDU group of publications Sunday, Oct 03, 2004 |
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Investment World
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Stocks Markets - Recommendation Orient Abrasives: Buy
THE stock of Orient Abrasives can be added to your portfolio, as it is a small-cap stock with potential for high growth. At Rs 168, the stock trades a price earnings multiple of five times its trailing 12-month per share earnings. The company makes alumina-based abrasives used in industries such as steel, cement, construction, automobiles and capital goods to remove metal and smoothen surfaces. Considering the buoyant activity in core sectors such as steel and cement, the company is expected to sustain the growth momentum of the past couple of years and report earnings growth in excess of 30 per cent. The reduction in preference dividend from 9 per cent to 7 per cent, too, would leave more earnings in the hands of common stock holders. Giventhe strong fundamentals, and the substantial scope for earnings growth in the medium term, the stock has scope for appreciation. The improvement in liquidity in the stock in the post-bonus period is also a positive trend.
Sowmya Sundar
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