ABB leads surge in engg scrips

An improved December quarter performance by ABB, helped stocks in this sector report sharp gains on Tuesday. ABB appreciated 8.65 per cent to Rs 2485, while Thermax gained 8.14 per cent to Rs 1170 and Alfa Laval India rose 5.3 per cent to Rs 1,065. As a result, the BSE's capital goods index hit a lifetime high of 6514.65.

This sectoral index has also been one of the best performing index over the past two months - the capital goods index has gained almost 27.2 per cent as compared to a 8.4 per cent increasse in the Sensex. ABB, alone has gained about 32.2 per cent during the past two months.

With no signs of easing in the capex cycle, it helped ABB's last quarter operating profit expand 32.24 per cent y-o-y to Rs 155.06 crore in Q4 CY05.

Meanwhile, other expenditure of the company rose 42.57 per cent y-o-y in the last quarter coupled with a 34.42 per cent rise in personnel costs, but lower steel prices helped operating margin improve 62 basis points y-o-y to 14.12 per cent.

The company's order backlog of Rs 2100 crore at the end of the December quarter, 2005 reflects a growth of 57 per cent on a y-o-y basis.

Mutual funds and UTI had increased their stake in ABB India to 4.48 per cent at the end of the December quarter, 2005 as compared to 3.55 per cent in the September quarter.

On the other hand, FII stake in the MNC company had marginally fallen to 16.16 per cent in the December quarter, 2005.

However, in the case of L&T, FIIs had increased their stake to 19.67 per cent in the December quarter, 2005 as compared to 18.99 per cent in the earlier quarter.

Earlier, L&T had also seen its operating profit margin expand by 177 basis points y-o-y to 6.18 per cent in the December quarter, along with a 13.53 per cent growth in net sales.

The company's key engineering & construction (E&C) segment grew 9.46 per cent, but that came on a higher base after a 35.3 per cent growth in December 2004.

Also, the E&C division's order book has grown by 116 per cent y-o-y, as compared to the overall order book growth of 108 per cent in Q3 FY06.