Shares of Punjab Tractors remained depressed on the Bombay Stock Exchange (BSE) today on reports of huge inventory pile-ups and sluggish demand in the tractor sector. The stock slipped 3.40 per cent to Rs 151.10.
Up to 24,528 shares of the company changed hands on the BSE today, while the volume of trade at the National Stock Exchange was 55,098 shares.
The current decline on the counter comes after the scrip surged on bargain hunting recently. From Rs 146.30 on July 30, 2002, the scrip rose 7.8 per cent in four trading sessions to Rs 155.75 on August 5, 2002.
More From This Section
Analysts said, fears of drought have further added to the scrip's woes. From Rs 192.85 on November 23, 2001, the scrip has shed 20.6 per cent in nine months to Rs 152.95.
The North India based tractor major reported a massive 45 per cent fall in net profit to Rs 14 crore for the first quarter ended June 30, 2002, on a 27 per cent fall in top line to Rs 161.70 crore.
Sales volume declined 34 per cent to 7,003 units. Punjab Tractors remains the largest tractor inventory holder in the domestic tractor industry.
For the full year ended March 31, 2002, the company's top line fell 8 per cent to Rs 885.50 crore, while net profit fell 10 per cent to Rs 101 crore.
The only silver lining for Punjab Tractors is the fact that the Punjab government (through Punjab State Industrial Development Corporation), which holds 24 per cent stake in the company, has decided to divest its stake in the company.
Analysts say Punjab Tractors' cash-rich status, its market share and valuable intangible assets like strong brand equity would unlock value for the company with the divestment.
Other tractor majors like Mahindra & Mahindra, Escorts, L&T John Deere, Same Tractors and Ford New Holland are likely to bid for PTL, analysts guessed.
Punjab Tractors commands a 20 per cent market share in the tractor sector. Currently, almost 60 per cent of the company's tractor sales come from the 35 HP segment.