L&T jumped 4%, to Rs 2, 652, on sustained buying ahead of the record date for a liberal 1:1 bonus issue

Glee in L&T as bonus shares record date nears - L&T jumped 4%, to Rs 2,652, on sustained buying ahead of the record date for a liberal 1:1 bonus issue.

As many as 3 lakh shares changed hands in the counter on BSE.

L&T has set 29 September 2006 as record date for the bonus issue.

Since late July 2006, the stock has witnessed a sustained rise amid intermittent correction. From a low of Rs 2,022.35 on 21 July, it has risen 31% to current Rs 2,652.

At the current market price of Rs 2,652, Larsen & Toubro (L&T) trades at 42.7 times its FY06 EPS of Rs 62.10.

Meanwhile, the L&T scrip entered NSE's futures & options (F&O) segment today with a lot size of 100.

L&T has seen a strong flow of new orders and has a healthy order book. Recently, L&T won a large scale turnkey contract valued at Rs 1,150 crore from Indian Oil Corporation (IOCL) for a captive cogeneration power plant in Panipat, Haryana.

L&T has emerged as one of the key beneficiaries of a boom in capital expenditure and infrastructure segment. The company had an order backlog of Rs 28,286 crore on 31 July 2006. L&T also has a price escalation clause in most of its orders to protect margins at a time when the input costs are on the rise.

L&T has earmarked Rs 1,200 crore for capital expenditure in the current financial year. This investment will be used for capacity additions in various projects across west Asia and China, said A M Naik, Chairman & Managing Director, at an AGM held in August 2006. The company is also actively pursuing new manufacturing facilities for selected machinery and industrial products in China.

Elecon Engg Stock split Issue

Stock-split tickles Elecon Engg - Elecon Engineering rose 1.10%, to Rs 1,006.15 after shareholders approved the sub-division of equity shares.

The shares shot up on hope that the company will shortly fix a record date for the stock-split. Each share of Rs 10 each will be split into five of Rs 2 each.

A thin volume of 5,519 shares was traded on the BSE.

The stock has been south bound since the beginning of August 2006. From a high of Rs 1,153.70 on 2 August, it dropped to Rs 981.85 by 12 September, only to appreciate to Rs 995.25 by 14 September 2006.

At the current market price of Rs 1,006.15, Elecon Engineering trades at 108.18 times it Q1 June 2006 annualized EPS of Rs 9.30.

Recently, the company won an order of Rs 53 crore from JSW Steel for design, engineering, manufacture, testing, supply, erection and commissioning of equipments.

In April 2006, the company had bagged a Rs 58 crore order from Torrent Power AEC for revamping its coal-handling plant at Sabarmati Thermal Power Station. The company has a strong order-book worth Rs 600 crore. This is 1.3 times its FY 2006 provisional turnover of Rs 445 crore.

The material handling equipment (MHE) division achieved an all-time high turnover (Provisional - Unaudited) of about Rs 209 crore in this fiscal compared to Rs 76 crore in the previous year, a spurt of 175%.

Elecon Engineering manufactures bulk material handling equipment and industrial gears. It is one of the largest industrial gear box manufacturers in the country with a wide range of products.

Elecon Engineering registered a net profit growth of 78%, to Rs 5.39 crore (Rs 3.03 crore) for Q1 June 2006. Net sales rose 34% to Rs 94.57 crore (Rs 70.69 crore).

Market may remain range bound; oil price fall to cap downside

Market may remain range bound; oil price fall to cap downside

The market is currently hovering at the key resistance level of 12000. Sensex came off the higher level after it surged past 12,000 mark in mid-afternoon trade on Thursday (14 September).

The market may edge lower today tracking subdued to weak trend in key Asian markets. But downside on the bourses will be capped by further fall in oil price. US crude oil slid to $63.02 a barrel as bulging US inventories offset geopolitical worries. The fall in oil price has raised hopes that the government would not raise domestic fuel prices in the near term.

FII inflow holds key. As per provisional data, FIIs bought shares worth a net Rs 288 crore on 14 September, the day when Sensex had risen 79 points. Their net inflow was Rs 519 crore on 13 September, the day when Sensex had jumped 233 points. The net FII inflow for September 2006, till 13 September, totaled Rs 1984.70 crore.

Key Asian markets edged lower on Friday. Key benchmark indices in Hong Kong, Japan and South Korea were down by between 0.17% to 0.63%.

US blue-chip stocks slipped on Thursday as data on import prices revived concerns about higher inflation and an investment bank's downgrades of bellwethers Boeing Company and General Electric Company tempered some expectations for growth. The Dow Jones industrial average fell 15.93 points, or 0.14% to finish at 11,527.39. The Standard & Poor's 500 Index dropped 1.79 points, or 0.14% to end at 1,316.28. But the Nasdaq Composite Index edged up 1.06 points, or 0.05% to close at 2,228.73.

Short Term BUY Recommendations for Quick Gains

Rajat Bose:
Buy Bajaj Auto (Rs 2825.95) with a stop loss below Rs 2782 for a target of Rs 2940
Buy Jet Airways (Rs 679.90) with a stop loss below Rs 640 for a target of Rs 750-770

Ashwani Gujral:
Buy Indian Oil with a stop loss of Rs 500 for a target of Rs 590
Buy Kesoram Industries with a stop loss of Rs 400 for a target of Rs 520

E Mathew
Buy RPG Life Science on declines with stop loss of Rs 136 for a short term target of Rs 170
Buy Mercator Lines on declines with stop loss of Rs 39.30 for a short-term target of Rs 56