Core Projects and Technologies slumps 70% in two trading sessions

Core Projects and Technologies slumped 46% to Rs 74 at 14:03 IST on BSE, tumbling for the third session in a row on market talk that shares pledged by some investors were offloaded after margin calls were unmet.

Meanwhile, the BSE Sensex was up 808.49 points, or 7.68%, to 11329.98.

On BSE, 1.21 crore shares were traded in the counter. The scrip had an average daily volume of 6.33 lakh shares in the past one quarter.

Core Projects had tanked 43.7% to Rs 141 on Friday, 10 October 2008. The stock has corrected 70.38% in two trading sessions from Rs 249.85 on 8 October 2008.

The stock hit a high of Rs 164 and a low of Rs 69.90 so far during the day. The stock had a 52-week high of Rs 464.40 on 28 December 2007 and a 52-week low of Rs 122 on 10 October 2008.

The stock had underperformed the market over the past one month till 10 October 2008, declining 50.17% as compared to the Sensex’s decline of 28.20%. It had also underperformed the market in the past one quarter, falling 25.78% as compared to the Sensex’s decline of 24.40%.

The mid-cap software-solutions provider has an equity capital of Rs 17.25 crore. Face value per share is Rs 2.

The current price of Rs 74 discounts its Q1 June 2008 annualised EPS of Rs 6.42, by a PE multiple of 11.52.

According to a report, some high net worth individuals (HNIs) had borrowed money from a couple of non-banking financial companies (NBFCs) by pledging their shares.

Reports quoted a Core Projects spokesperson as saying that the company was unaware of any margin calls. However, in his opinion, the steep fall in the stock price was perhaps due to liquidation of shares, which rose out of the conversion of foreign currency convertible bond (FCCBs). The company had issued FCCBs worth $80 million in May last year, with a conversion price of Rs 167.

A total of 16.75 lakh shares were converted out of these FCCBs in the past one month, the report added.

Core Projects and Technologies’ net profit fell 4% to Rs 13.32 crore on a 25.70% rise in sales to Rs 64.90 crore in Q1 June 2008 over Q4 March 2008.

Core Projects & Technologies provides information technology products and services. The company provides services including onsite and offsite consulting and knowledge management services, systems integration, global postioning system based vehicle tracking and detection systems, application support for their products, and offshore outsourcing.