BSE capital goods index hits the roof

On Tuesday, it surged by 53 points compared with a 57 points drop in the Sensex

The power generation and engineering stocks are back in the limelight. The BSE capital goods index on Tuesday hit its life-time high of 3792.51 during intra-day trades before closing at 3764.57.

The capital goods index was the biggest gaineramong indices on Tuesday, surging 53 points compared with a 57 points drop in the Sensex.

Sector stocks such as Siemens, Larsen and Toubro, ABB, Grindwel Norton, Crompton Greaves, Bharat Electronics, SKF, Esab India and HMT closed in the positive territory, gaining one to six per cent on BSE.

ABB was the major gainer, up 6.09 per cent to close at Rs 1,414.70 against the previous close of Rs 1,333.50. The company has won India's first major equipment orders for 765 Kv extra high voltage (EHV) transformers and shunt reactors from National Thermal Power Corporation (NTPC), the country's leading power generation utility and PGCIL (PowerGrid Corporation of India), the central power transmission utility. These will be the largest transformer banks and the highest voltage class transformers to be installed in India.

Siemens, the second biggest gainer, up 5.98 per cent to Rs 2,108.95 against its previous close of Rs 1,989.90 on the BSE. The company announced that it has secured an Rs 2,240 crore turnkey engineering, procurement and construction (EPC) contract from the Torrent Group.

Siemens has got the contract for the setting up of a 1,106 mw 'Sugen' mega power project in Surat. Siemens and Torrent have entered into a 50:50 joint venture to provide operations and maintenance service for this project.

Earlier, in May, Siemens in a consortium with German parent Siemens AG, bagged a Rs 925 crore contract to develop and design railway coaches from Mumbai Railway Vikas Corporation.

Crompton Greaves, a leading manufacturer of transformers in the country, was up 1.24 per cent to Rs 465 against its previous close of Rs 459.30. The Union Budget's focus on rural electrification is seen boosting demand for transformers. The power systems division of Crompton Greaves comprises transformers, switchgears and turnkey projects.

Other sector stocks gaining on Tuesday include Grindwel Norton, up 2.17 per cent to Rs 329.65 against its previous close at Rs 322.65. Bharat Electronics gained 1.85 per cent to close at Rs 730.95 (Rs 717.70), SKF up 1.12 per cent to Rs 189 (Rs 186.90) and Larsen and Toubro gained 1.06 per cent to Rs 1,182.50 (Rs 1,170.10).

In the last one week, the Capital goods index has outperformed the Sensex and S&P CNX Nifty. The index appreciated 4.87 per cent compared with 2.43 per cent rise in Sensex and 2.80 per cent gain in S&P CNX Nifty.

In the last twelve months ended March 2005, net profit in the capital goods sector went up by 64 per cent to Rs 4,375 crore (Rs 2,663 crore).