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Stock of Shalimar Paints Ltd on Tuesday created its all-time high at Rs 988.
The stock has been moving up since May 6 from a level of Rs 290.
The counter's movement has been coloured by speculations that the controlling stake in the company was up for sale and there were more than one intending buyers, Berger Paints India Ltd being one of them.
Mr K.S. Dhingra, promoter and chairman of Berger Paints, told Business Line that neither he nor his company was in any form involved in acquisition attempts of Shalimar Paints.
On May 6, Shalimar Paints had in a statement to the stock exchanges clarified: “As a matter of policy the company does not comment on any market reports unless they relate to matters to which the company is party and which have reached definitive stage. Otherwise, any comment by the company would be speculative.”
Despite the standard denial, the counter moved up sharply in the past one month. There had been bulk deals in this period.
On Tuesday there was a deal involving 30,825 shares which changed hands at Rs 964.
Promoters control 62.3 per cent of the paid-up equity of the Kolkata-registered old paint company, which has two manufacturing plants – one in Howrah, West Bengal, and the other one in Nashik, Maharashtra.
Promoted by Jindal Group and Jhunjhunwala Group, Shalimar Paints saw its net profit rising 36.29 per cent to Rs 3.53 crore in the quarter ended March 2011 as against Rs 2.59 crore during the previous quarter. Sales rose 17.28 per cent to Rs 129.00 crore in the quarter against Rs 109.99 crore during the quarter ended March 2010.
For the audited full year, net profit rose 16.70 per cent to Rs 11.67 crore in the year ended March 2011 as against Rs 10.00 crore during the previous year ended March 2010. Sales rose 10.63 per cent to Rs 404.44 crore in the year ended March 2011 as against Rs 365.57 crore during the previous year ended March 2010.
Mr Rajesh Agarwal, head of research at Eastern Financiers, said as the rumour had not been scotched or confirmed unequivocally, the counter has been a punters' favourite of late.
According to market circles, the fundamentals do not justify the current price of the stock.
“Prices of key inputs such as solvents, including vegetable oils, crude oil-based derivatives, and titanium dioxide, are hardening raw materials account for 60 per cent of the total cost of production of a paint company. All these inputs have reportedly become costlier by 10-12 per cent in the last one year,” Mr Agarwal added.
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