The upbeat mood in the stock markets during the last couple of weeks seems to have percolated into B1 and B2 scrips too. Out of a sample of 1000 scrips in B1 and B2 groups, as many as 300 which were trading below par around six months back, are now quoting above par.

Apart from the sensex rally, which has been interrupted in the last three sessions, there are many other reasons for this sudden activity on these counters. In many cases, the uptrend in B1 and B2 stocks has been due to good industry prospects.

As the investors are now focussing on software stocks, not only scrips of known companies have risen, but even the not-so-famous companies have also responded to the overall upward movement of the stock market. For instance, Calcutta-based RS Software Ltd, which was quoting at Rs 7.55 six months back, is now trading close to its six-month high of Rs 29.5. A software firm specialising in IBM mainframes, RS Sowtware has reported a turnover of Rs 24 crore during 1996-97 and for the current fiscal, it is targetting a figure of over Rs 36 crore which works out to a higher growth than the industry annual growth rate of 40 per cent. The real jump in turnover is expected to be achieved during 1998-99 when returns from work on YK2 compliance will start flowing in. The company has now emerged as a number one software exporter from the eastern India. Other software scrips like Ace Software, Pentafour Solutions and Pentafour Products have also appreciated on the bourses.

In the tea industry rising tea prices have helped some scrips look up. For instance, Longview Tea rose from Rs 5.5 to Rs 15. Similarly, fertilizers stocks like Chambal Fertilisers, Deepak Fertilisers and Godavari Fertilisers have recorded substantial gains. Fertiliser stocks have turned favourites off late driven by speculation and expectations of a better performance from the industry. Chambal Fertilisers is currently trading at Rs 13.8 and has risen from its six-month low Rs 9. The company has reported a net profit of Rs 118.59 crore for 1996-97.

A rally in sugar stcoks saw scrips like Aruna Sugar and Simbhaoli Sugar moving up on the bourses. While the former has risen from Rs 7.75 to Rs 15, the latter jumped from Rs 9.4 to Rs 14.

In some cases, the rise was due to dividends from companies where the yeild on investment is higher in a falling interest rate scenario. For example, a 12 per cent dividend from Sametal Colour gives an yield of 15.58 per cent. Bouyed by this, the stock which was trading at Rs 7.65, is now hovering around Rs 16.

A better than expected results from some of the companies also saw their scrips rising on the bourses. Pearl Polymers has reported a 74.76 per cent rise in net profit for the year ended March 31, 1997 at Rs 6.69 crore compared with Rs 3.83 crore in the previous fiscal. Total income has registered a marginal growth to Rs 89.07 crore compared with Rs 87.95 crore in the previous fiscal. In line with this, the scrip almost doubled from Rs 9.75 to Rs 18.5.

Interestingly, there are also some gainers who have reported losses for 1996-97. Tata Metaliks, which has reported a loss of Rs 1.96 crore, has moved up from Rs 9 to Rs 13.3 on the bourses. Similarly, Indian Dyestuff's scrip has moved from Rs 8 to Rs 19.55 despite the company reporting a net loss.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.