Shares of Sundram Fasteners, the auto ancillaries major, hit a high of Rs 268, up almost nine per cent, during intra-day trades on the Bombay Stock Exchange.
It, however, closed lower at Rs 251.25, still up 4.86 per cent from Tuesday's levels, on the back of a volume of 21,233 shares.
On the National Stock Exchange (NSE), the stock closed at Rs 252.15 with 9,424 shares changing hands.
More From This Section
In the last 11 sessions, the Sundram Fasteners share had shed 10 per cent to Rs 239.60 on February 26 from Rs 265.75 on February 11.
Dealers said the spurt at the counter was purely due to buying interest.
Meanwhile, analysts said the domestic auto components sector, which basically depends on the automobile firms for growth, is expected to do well during fiscal 2002-03.
The volume growth in the last two quarters of fiscal 2002 has shown that automobile demand has been sustained, especially in the commercial vehicle and two-wheeler segments.
The multi-utility segment has also been in the recovery mode of late and is expected to gather momentum in the coming months.
These factors, analysts aver, suggest that the larger auto ancillary players which have quality clients, could fare well in fiscal 2002-03.
They said Sundram Fasteners could see a significant improvement in topline and margins since it has large scalable capacities in place to take care of incremental demand from the automobile sector.
They say the company has good expertise and managerial skills and the stock, in particular, should witness good growth in March 2003. Analysts, however, feel that the only problem is that Sundram Fasteners is an illiquid counter.
Moreover, the auto components manufacturers association has recommended that customs duty on essential raw material inputs like aluminium oxide, nickel oxide and nickel alloys, which is presently at 35 per cent, should be reduced to 5 per cent.