Buy-Back News Props Atlas Copco

Shares of Atlas Copco, the country's largest compressor manufacturer, surged almost 14 per cent at Rs 143.60 today after the company said it is considering a buy-back. The stock closed higher by 6.17 per cent to Rs 134.10 amid a volume of 95,465 shares on BSE.

The stock has been rising in spite of the company's recent poor financial performance. From Rs 114 on February 28, 2002, the stock grew 10.7 per cent to Rs 126.30 on March 6, 2002. Atlas Copco of Sweden, the parent company, has a 51 per cent stake in the company which would go up after the buy-back.

On February 25, 2002, the company announced its fiscal 2001 (year ended December 2001) results, reporting a 33 per cent fall in net profit to Rs 10.48 crore, compared with a net of Rs 15.75 crore the previous fiscal. Net sales rose 9 per cent to Rs 228.08 crore in fiscal 2001. However, the results are not comparable as fiscal 2000 consists of the full year's operations of Atlas Copco and nine-month operations of the erstwhile Chicago Pneumatic India (CPIL) with effect from April 1, 2000. On the other hand, the fiscal 2001 results comprise full year results of both the companies.

The company is currently undergoing a restructuring of operations and it has closed down its manufacturing operations at Mulund in Mumbai. The company has about a 50 per cent market share of the compressor industry in India, higher than that of Ingersoll Rand. It has a presence in both portable compressors (used in construction industry) and oil-free compressors (used in pharma, food and textile industries). It also manufactures construction tools.