Castro ups tempo with Bajaj Auto

STREET SIGNS

Castro Fund has hiked its stake in two and three wheeler maker, Bajaj Auto to 5.01 per cent of the total paid up capital of the company in a recent deal. Castro acquired a lakh of shares of Bajaj Auto, aggregating 0.09 per cent of the total paid capital.

While that decision may be strategic, going by Bajaj Auto's performance, it is fully justified, say those who track the stock. For instance, Bajaj Auto achieved its highest ever sales in a single month in September, 2005.

Bajaj Auto sold 10.59 lakh two and three-wheelers in the first half of FY06 compared with 8.18 lakh in the corresponding period of the previous fiscal.

The company expects its enhanced motorcycle manufacturing capacity at 2 lakh units per month to come on stream by the end of the month. It also expects a bike market share of over 31 per cent. But not all is honky dory for the company if you want to believe Merry Lunch.

Merry has noted that scooter growth will slow down in the second half of the year, owing to competition from new entrants like Honda as well as aggressive pricing by competitors like TVS Suzuki.

Getting cozy at Taj

Big Boy Fund was a buyer at Taj GVK Hotels counter recently. The fund is said to have bought the shares at Rs 653 levels. The stock has seen plenty of appreciation in the recent past with the stock price advancing by 54 per cent in the past three months.

In the past, buying interest was dictated by stock split announcements. Taj GVK, a joint venture between the Tatas and the GVK Group, is set to split its shares in the ratio 1:5. Even before that, the stock has been on the rise on expectations of further increase in hotel room rates apart from higher occupancy rates.

A 'toll' order

The surge in price of the Noida Toll Bridge Company stock has caught many unawares. The stock was languishing at Rs 8 levels a year back, which means that at current levels of Rs 36, the stock has witnessed a 350 per cent appreciation.

The company's debt restructuring and refinancing of loans at lower levels have seemingly led to the current boom in price.

Lending Brokerage was so imp-ressed by the company that it decided to buy some 7 lakh shares at the counter at Rs 36 levels. Bric by Bric Brokerage is also a big supporter of the stock and had recently recommended a 'buy' on the stock. A report says that implementation of Mayur Vihar Link project would see traffic increasing to 10,000 vehicles per day.

Approval of the development rights of land adjoining the bridge could prove to be a major cash driver. The brokerage expects the company to break-even at net profit level in FY07 and any incremental revenues are expected to directly add to the bottom-line.