AIA gets a thumbs up from Prudent

STREET SIGNS

As is the case with most new listings these days, AIA Engineering also got a fabulous welcome at the bourses. The stock got listed on the NSE at Rs 405 levels compared with its issue price of Rs 315. What is more, by the time the day closed, the stock had risen to Rs 501. Not that the big guns were sitting idle.

Institutional interest was very much a factor behind the rise in stock price with such biggies as Castro Fund and Prudent Fund buying into the counter. While Castro Fund bought 1.4 lakh shares at Rs 451 levels, Prudent bought a lakh of shares at Rs 489.

The company's sales grew at a compounded annual growth rate (CAGR) of 23.50 per cent while net profit has grown at 26.20 per cent over the last four years. AIA has an order book of about Rs 200 crore, with an execution period of six to seven months.

According to Brick by Brick brokerage, 90 per cent of the orders would accrue in H2 FY06, and also a bulk of the sales will take place in Q3 and Q4. The brokerage assumes a 25 per cent growth in sales for FY07 at Rs 450 crore, which should lead to a net profit of about Rs 52 - 54 crore.

NRC under the hammer
While Prudent was a buyer at AIA Engineering, to balance the books, it turned seller elsewhere. The fund chose the NRC counter for that purpose where it dumped 2.3 lakh shares at Rs 60 levels.

Though the stock has not really been among those which have caught the fancy of big investors, it still has appreciated by 76 per cent. The counter has also been abuzz with the news that real estate developers such as Piramal Holdings, Evershine Builders and the S Reheja group are in race to acquire 350 acre belonging to NRC in Mumbai.

The property is estimated to be valued at Rs 300 crore. NRC, part of the G P Goenka group, had put its 350 acre of prime real estate in Kalyan on sale as part of a debt restructuring exercise. The company plans to raise funds for expansion through the sale of land.

No free gifts
The German Fund was a seller at the Archies counter. The fund sold more than 75,000 shares at Rs 144 levels. After a recent dip in price, the stock has picked up again in the past month or so. The stock has risen by 51 per cent in the past year.

Archies have been struggling with their cards and gifts business of late. The greeting cards segment has witnessed a downtrend in sales in the past four years.

In an attempt to revive its fortunes, the company is planning to open 150 outlets across 18 cities across the country by March 2008, majority of which will be in the upcoming malls and prime retail space areas.

The company has also been changing its focus from cards to gifts for which it has tied up in a licensee agreement with Disney to sell its merchandise.