PFC: Show of power

STOCKS IN THE NEWS

The stock was in the news last week after the company announced its first quarter results on July 16. The stock gained by around eight per cent on the Bombay Stock Exchange with combined volumes that more than doubled at 595 lakh shares. The stock has also attracted large interest in the futures and options segment with open interest rising from 7.3 million shares to 13.96 million shares. The rise in open interest coupled with the rise in market price augur well for further appreciation.

For the quarter ended June 2007, the company has posted a net profit of Rs 308.65 crore compared with Rs 151.90 crore for the quarter ended June 30, 2006. Total income has increased from Rs 845.14 crore to Rs 1,145.81 crore.

According to Edelweiss Research, the outlook for Power Finance Corporation (PFC) remains strong, given that $155 billion in investments have been lined up in the power sector over the next five years. "" BS Research

The proposed ultra mega power projects (UMPP) advisory services and loan syndication contracts (worth Rs 3500 crore from IFFCO) are likely to boost PFC's fee income and support its business growth by enhancing lending operations. Fee income will also kick in from the launch of the Rs 1000-crore India Power Fund as PFC is managing the equity program of this fund.

RCF: Set for growth

RCF dominated the week to become the top gainer among all fertilizers stocks. The stock gained 23.87 per cent to close at Rs 54.05 on strong volume of trading on both the BSE and NSE. The trading volumes jumped 91 per cent from 72.06 lakh shares to 137.93 lakh shares. The company will announce its Q1 June 2007 result on July 25, 2007.

Meanwhile, at the annual general body meeting on July 7, the company has drawn several new initiatives for future development. For the entire revamping and brownfield expansion, the company has earmarked a capital expenditure of Rs 10,000 crore over the next five years. The huge capex has been planned based on the assumption that the government will actively support the company in fund raising.

The proposal for Thal expansion, costing about Rs 2,700 crore, is also with the government, which is seriously considering the project. The brownfield expansion envisages setting up of a single stream ammonia plant of 2,200 MTPD and a 3,500 MTPD urea plant. All these three plants will contribute three million tonnes of urea and will go a long way in meeting the demand-supply gap of urea in the country.

The company has signed an agreement with an Australian company to produce load bearing rapidwall panels, wall plaster and wall putty by utilising gypsum, which is a waste product. Rapidwall panels are used as an alternative to conventional bricks in building houses.