Indo Asian Fusegear turns on the light

STREET SIGNS

The pendulum swung the other way with the bulls wrestling back the control after two sessions. The Sensex closed 103 points higher, closing well above the 8,600-mark. Now Merry Lunch's Indian research arm is hell-bent on spoiling the good mood.

In a recent report, they have noted that the Indian markets are 10-15 per cent above fair value. What is worse - they have predicted that 2006 could be a more difficult year for markets, citing reasons such as rising interest rates, slowing earnings growth and high valuations.

But the Prized One Brokerage has hit back with their strategy report, noting that valuations are reasonably relative to growth. The brokerage also notes that consumption-led growth should ensure good times ahead.

Bitter sweet
Mr. AB Amre's London bank was a seller at the Simbhaoli Sugar counter. The firm sold more than a lakh of shares at the counter at the Rs 72-level. With the stock on a steady decline after crossing the Rs 108-level in mid-August, it is hardly surprising that shareholders are cutting their losses.

But on a positive note, the company has announced plans to double its per annum ethanol production output from 18 million litre to 36 million, by setting up a new ethanol plant adjacent to its Chilwaria Sugar Unit (Eastern UP).

Production is likely to commence in June 2006. Simbhaoli Sugar Mills is one of the largest sugar manufacturers in North India. The new plant is expected to form a synergy with the existing sugar unit of the company, thus help achieve economies of scale.

Happy Holiday
One Mauritius - based fund was a buyer at the Sterling Holiday Resorts counter. The fund bought more than 1.3 lakh shares at the Rs 54-level. The stock has seen a fair appreciation since the start of the month, advancing from the Rs 44-level.

The company's financials have seen a recovery in the past quarter. Net profit improved to Rs 0.88 crore in the September quarter of 2005, compared to a loss of Rs 3.35 crore during the same period in the previous year.

However, net sales slipped to Rs 4.45 crore compared to 6.34 crore in September, 2004. According to those in the know, the bright outlook on the tourism segment in India has also lifted sentiments at the counter.

Lighting up
Buying interest at the Indo Asian Fusegear is building up. The stock has seen a near 41 per cent appreciation in the past month, after the lighting major announced that it is planning to acquire two firms in the UK and Germany in a bid to build up its global presence.

The company exports compact fluorescent lamps and switchgears to UK, Italy, Germany and Spain at present. Indo Asian also has lined up domestic expansion plans. The company will invest about Rs 71 crore in setting up three new units at Haridwar.

While the wire and cable manufacturing unit will be operational by December this year, the other two units that will manufacture lighting products, including outdoor lighting products will be ready by March 2006. Jeweller Fund was among the recent buyers at the counter, picking up some two lakh shares at the Rs 142-level.