BSE Capital Goods index climbs to all-time high

Index appreciates 30% in last 4 months and 61% in last one year.

Taking a cue from the bulging order book positions of frontline capital goods companies, investors are buying heavily into capital goods stocks.

Consequently, the Capital Goods Index of the Bombay Stock Exchange (BSE) hit an all-time high at 2490.91 yesterday. The index has appreciated 30 per cent in the last four months and 61 per cent in the last one year as against a 13 per cent gain in the Sensex in the last four months and 35 per cent in the past year.

Scrips of capital goods manufacturers, Bharat Earth Movers (BEML), Eimco Elecon, Elecon Engineering, Walchandnagar Industries, Texmaco and Stewarts and Lloyds have each appreciated by more than 40 per cent in the last one month on the bright growth prospects of the industry and the individual company's order book position.

BEML's stock has appreciated by 45 per cent from Rs 161 on August 20, 2004 to Rs 233.05 on the BSE today. The company has an outstanding order book of Rs 2,107 crore. For the last financial year 2003-04, the company had posted an all time high turnover of Rs 1,771 crore.

Larsen and Toubro, which recently won a Rs 482 crore contract from China for coal gassification equipment, has appreciated by 10 per cent from Rs 798.70 to Rs 871.85 in the last one month. The company has a strong order book of over Rs 17,000 crore and expects a 25 per cent overall sales growth in 2004-05 on the back of these robust orders.

Siemens, whose scrip trades at a lifetime high, has planned investments of Rs 100 crore to support its expansion and modernisation plans. The stock has moved from Rs 974.10 to Rs 1,160.25 in the last one month on the BSE.

Nagarjuna Construction Company's scrip is also ruling at a lifetime high of Rs 250, having appreciated by 24 per cent from Rs 202.40 in the last one month. In that period, the company has bagged five orders amounting to Rs 296 crore.

The market price of Aban Loyd Chiles has increased almost three-fold in the last four months. The latest news on this counter, posted a couple of days back, is that it has entered into an agreement for the purchase of a drilling ship Frontier Ice from Frontier Drilling ASA, Norway. Aban Loyd said it would be working under contract with the ONGC for a period of 3 years.