Gujarat PSU stocks hit 52-week highs in Feb

State public sector undertakings (PSUs) are passing through perhaps their best times. The share prices of all the five Gujarat government PSUs listed on the Bombay Stock Exchange (BSE) have hit their 52-week highs in February 2005.

The five Gujarat PSUs listed on the BSE are Gujarat Alkalies and Chemicals Ltd (GACL), Gujarat State Fertiliser and Chemicals Ltd (GSFC), Gujarat Mineral Development Corporation Ltd (GMDC), Gujarat Narmada Valley Fertilisers Company Ltd (GNFC) and Gujarat Industries Power Company Ltd (GIPCL).

Consistently improving bottomline and sales are the main reasons for the rocketing share prices, sector analysts point out

Atul Choksi, president of Ahmedabad Stock Brokers' Association, said the share prices of these five PSUs have outsmarted the Bombay Stock Exchange (BSE) PSU Index, because of two reasons.

"Firstly, most of these companies are into the chemicals and fertilisers sector, which made a slow beginning to the year, but have been very buoyant in the past few months.

"Secondly, the state government has become very business-like in the past few months and has appointed efficient management teams to head these five companies."

Departing from the PSU divesting mantra, the Gujrat government has announced that the state will pump in more capital to these companies.

All the five companies have posted impressive results in the third quarter ended December 31, 2004. The Vadodara-based GACL posted a 209 per cent rise in its net profit for the quarter ended December 31, 2004, compared with the corresponding quarter of the previous year. The government has announced that it will invest an additional Rs 95 crore in several company projects.

P K Taneja, managing director, GACL, said: "The performance has been indeed impressive. The top line growth has been impressive and that has ben reflected in the third quarter results. The markets, I feel, are responding to all these factors."

Taneja added that the government would continue to invest in the company's expansion.

Similarly, GNFC reported a net profit of Rs 56.02 crore for the third quarter of the current year, a whopping 219 per cent higher than in the corresponding quarter of the previous year. GNFC is setting up an air separation unit at its Bharuch fertliser and chemical complex.

The stock price of the Vadodara-based GSFC too has tripled, from a 52-week low of Rs 41.05 in May 2004 to Rs 128.50 earlier this month.

The net profit of GSFC jumped 37 per cent to Rs 812.31 crore during the third quarter ended December 2004 versus a net profit of Rs 594.11 crore in the corresponding quarter of the previous financial year.

GMDC too recorded a 15.72 per cent increase in its net profit at Rs 32.39 crore for the third quarter ended December 31, 2004, compared with a net profit of Rs 27.99 crore in the third quarter of the previous year.

Meanwhile, GIPCL registered an impressive 213 per cent rise in its net profit to Rs 23.26 crore in the quarter ended December 31, 2004 as against a net profit of Rs 7.43 crore in the corresponding period of the previous year.