Financial Daily from THE HINDU group of publications
Tuesday, Jul 01, 2003
Financial Daily from THE HINDU group of publications Tuesday, Jul 01, 2003 |
|
|
|
|
|
Markets
-
Stock Markets Export potential of Scorpio predicts good times for M&M Deeptha Rajkumar
EMERGING clarity on the export potential front for Scorpio has been aiding momentum at the M&M counter, with the stock moving up sharply amidst good volumes. Says analyst Mr Sumeet Pillai of Karvy Stock Broking, "Today there is a bit of clarity on the company's initiatives to export Scorpio. It has identified potential export markets in China, Indonesia, Russia, South Africa. Of these, Russia and Indonesia present a big market for SUVs. These efforts have impacted company's outlook positively," he said. According to market participants, the valuation band of the stock has moved up over the last one and half months, following market's increasing confidence in the company performance with regard to Scorpio. "Today, the market is running up ahead of the numbers whereas so far it had been following it," sources said. Analysts maintain that in a scenario where the UV segment has been doing well, the Scorpio has been grabbing the higher share of the market. "This is expected to drive revenue growth and profit growth," an analyst said. With worries over monsoon prospects laid to rest, expectations about a recovery in the tractor division of the company has also been driving the stock. "The monsoon feedback has so far been positive. And demand in the non-Scorpio UV portfolio is also said to be growing, which is a definite plus for the company," says market analyst Mr Arun Kejriwal. Apart from this, a sharp spurt in its other income led by higher dividend from its subsidiaries has provided a big fillip to the company bottomline. "Presuming going ahead the dividend is sustainable, the company is looking at good cash flows. This would enable them to return the debt which in turn would reduce its interest outflow, thereby boosting earnings further," an analyst said taking a long-term view. Yet despite company feedback and a general feel-good factor about the company, there are doubts over its prospects - with regards to its tractor sales - continue to be difficult to dismiss. Tractor sales, which saw a sharp correction in FY03 due to the effects of inventory correction at the dealer end, is yet to show signs of revival. "Despite company projections that the corrective phase is expected to near completion in the next 4-5 months, we expect volumes to remain sluggish if not flat. Much depends on the monsoon and at this juncture opinion is divided on whether it is promising enough for yet another year. So it is too soon to take a call," an analyst with a leading domestic broking said. The stock ended the day at Rs 147.80 up almost 6 per cent with around 8.81 lakh shares changing hands on the BSE. On the NSE, the stock ended the day at Rs 148.20 up almost 6 per cent with around 17.80 lakh shares being traded.
Article E-Mail :: Comment :: Syndication
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | Home |
Copyright © 2003, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|