Gabriel India captivates Reliable Fund

STREET SIGNS

So yesterday was only a trailer of the bloodbath that was witnessed at the bourses today.

While yesterday's free fall was arrested by bulwarks like ITC, ONGC, NTPC and Reliance, there was no such support forthcoming today, which resulted in a 265 point loss to the Sensex, which is incidentally the biggest single day fall for the Sensex since May 17, 2004.

Apparently, most of it because of reports of that dreaded lot - the taxmen - making not-so-friendly visits to some stock and real estate brokers in several parts of the country for possible violation of rules.

Buyers like Life Boy had kept on buying yesterday which kept the sentiments up to a large extent. But sadly for the bulls, not many were willing to stock their necks out today.

Geared up

Reliable Fund's fondness for auto ancillary stock Gabriel India is growing by the day.

As a follow up to its buying at the counter in late August, Reliable Fund is said to have bought another chunk of Gabriel India shares at Rs 239 levels.

The fund had bought the stock in August at Rs 219 levels. The stock has been on a steady climb in the past year with the stock price moving up from Rs 137 levels one year back to Rs 256 levels in mid-June. Rather shaky June quarter numbers had left the stock in the lurch recently.

Gabriel India posted a net profit of Rs 1.8 crore for the June quarter, a 36 per cent decline compared to the same period in the previous year.

The stock has been moving around the Rs 235-Rs 240 levels of late. Reliable Fund seems to be betting on the fact that the company is a market leader and manufacturer of a wide range of ride control products.

The company has seven plants and a manufacturing capacity of 10 million units per annum. Its client list includes Maruti Udyog, Hero Honda, Bajaj Auto, Hyundai, Hindustan Motors, and Ashok Leyland among others.

Double impact

There is some definite interest building up at the OCL India counter. Two high profile buyers who were spotted at the counter were Merry Lunch's desi fund arm apart from Prudent fund. While the former bought more than two lakh shares at Rs 140, the latter bought some 2.6 lakh shares at the same price.

Apparently, OCL India is presence in two happening commodity businesses - cement and steel - is what makes it an attractive play. Currently, the company has a total cement capacity of 1.3 million tonne per annum, refractory capacity of 80,000 tonne and a 1.2-lakh tpa sponge iron plant.

The company plans to expand cement capacity to 2 million tonne per annum. For FY05 OCL India reported a turnover of Rs 394.56 crore and net profit of Rs 22.60 crore.

The company is expecting a turnover of Rs 450 crore in the current fiscal.

With heavyweight buying support coming in, the stock which has been sliding from Rs 185 levels in late August should witness a renewed boost.