Abb

Price on 29/01/98: Rs 445.25

Price on 06/02/98: Rs 367.25

The scrip has been badly mauled by 17.51 per cent to Rs. 367.25 after seeing a high of Rs. 540 on january, 19, on massive selling by Indian institutions. Largely illiquid, the sudden fall was caused by some institutional sales. The company has had to face a major reduction in its order book and analysts have been scaling down profit projections for 1997-98 form Rs. 70-80 crores to Rs. 65 crores and more recently to Rs. 40-50 crores.

The company derives roughly one third of its turnover from the Power Generation Equipment Division. Contracts from several independent power projects including those being set up by Videocon, Daewoo, Nippon Denro Ispat are still awaiting execution pending financial closure of the projects. Roughly another third of the turnover comes from the transmission and distribution division which supplies high and medium voltage switchgears mainly (70-80 per cent) to the SEBs. Besides being bad creditors, almost all the SEBs are battling against bankruptcy. The last third of the turnover is provided by the industrial systems segment which services the various process industries. No spectacular growth can be expected from this segment given the general recessionary conditions.