Market Buzz

Pitti Lamination up on talk of REL buy

The stock of Pitti Lamination has risen 48% over the past week on buzz that Reliance Energy (REL) is eyeing a minority stake in the company. Pitti manufactures electric-grade steel stampings and laminations, the key components in motors, rotors and other electrical components. Its clients include ABB, BHEL, Siemens, Suzlon and GE (US).

Dealers tracking the counter say REL is looking to have strategic tie-ups with key vendors for effective inventory management as it will be handling large projects. When contacted, REL spokesman refused to comment on the issue. At roughly 9 times trailing full-year earnings — the company reported an EPS of Rs 11.35 for FY07 — the stock may not appear overly expensive. But the performance for the first six months of the current financial year has been anything but impressive, with the company clocking an EPS of Rs 3.59. Local mutual funds do not appear to be hot on this stock.

Total institutional holding in the stock as on September 30 was 6.4% and all of it foreign. Also, there have not been any major institutional purchases in the stock over the past couple of months, as per data on BSE website. The stock on Friday closed at Rs 98.75, up 14% over its previous close.


Zenith Birla soars on capacity expansion buzz

The scrip of Yash Birla group company, Zenith Birla, is soaring on the bourses on talk that the company is planning to expand its pipe mak-ing capacity. Shares were up 4.9% on Friday, and 28% in the past week.

Confirming the move, a company official said a greenfield project will be put up on the west coast — Gujarat or Maharashatra — in-creasing capacity to 320,000 tonnes from 120, 00 tonnes. The company currently produces its pipes at its existing plant at Khopoli, about 80 km from Mumbai, which has two lines of production.

Such pipes are mainly used for oil and gas distribution through cross-country pipelines. Zenith has some presence in the global market, chiefly in the US and West Asia, with about 60% of its turnover com-ing from exports.


Tata Chemicals counter witnesses’ frenzied activity

Tata Chemicals has appreciated by over 20% in the past one week. The counter is witnessing sustained accumulation by various institutional investors. According to market sources, the Life Boat Fund — a biggie among domestic investors — has sold about 10-15 lakh shares at an average price of Rs 365, which in turn has been accumulated by informed investors.

The story doing the rounds is that the cash-rich company would post improved quarter-on-quarter performance and would also benefit from the rising soda ash prices (up about 25%). Its strategic tie up with Praj Industries is another positive. The stock closed at Rs 381, up 1.5% from the previous close.

Via ET