Electrosteel Up On Bonus Buzz

Electrosteel Castings touched a 52-week high in morning trades on the Bombay Stock Exchange at Rs 366.30. The scrip, however, closed at Rs 335.30, up 9.24 per cent over Thursday's close. Around 39,360 shares changed hands on the counter. On the National Stock Exchange, around 71,844 shares changed hands.

A dealer with a local brokerage house said, "The sustained buying was mainly on rumours that the company is likely to issue bonus shares." Meanwhile, most analysts feel that the company may issue bonus in the ratio of 1:1. The company had last issued a 1:1 bonus in September 2000.

Interestingly, the scrip has advanced around 25.5 per cent from Rs 283.10 on July 2 to its intra-day high today. During the same period, volumes touched a low of 2,068 shares on July 2 to high of 71,844 shares.

Electrosteel is the largest manufacturer of ductile iron and cast-iron pipes, which are mainly used in water infrastructure. With a view to further consolidate its position in the industry, the company acquired a controlling stake in Lanco Kalahasthi Castings in March 2002.

Further, it had recently set up a ductile iron fittings shop at Kardah near Kolkata in technical collaboration with Xinxing Ductile Iron Pipe (Group) Co of China.

Xinxing has also entered into an arrangement with the company under which it will market its products abroad. ECL invested around Rs 14 crore in the project.

The company had announced strong results for the fourth quarter and full year ended 31 March 2002. For the year ended March 2002, the company recorded a 34 per cent jump in net profit to Rs 84.61 crore compared with Rs 63.17 crore last year. While total income jumped 7.8 per cent to Rs 540.15 crore from Rs 500.99 crore.