The counters of commercial vehicle manufacturers like Telco and Ashok Leyland will see hectic buying in the next few trading sessions. This follows the government announcing 60 per cent annual depreciation benefits on the purchase of commercial vehicles in 1998-99, instead of 40 per cent depreciation benefit.

These benefits for buyers of commercial vehicles are expected to create a spurt in the demand and boost the sales of companies such as Telco, Ashok Leyland, Eicher and Bajaj. The current population of heavy and medium commercial vehicles is estimated at 26.7 lakh.

The sector has been in deep recession for over a year now - companies have witnessed a 30-per cent decline in sales. Only as recent as in October, production was stepped up in anticipation of increased demand. This was done because in normal times, when the industry grew at a reasonable pace, the government wanted to discourage transactions done simply for claiming depreciation. But the situation isdifferent today and there appears an urgent need to boost key sectors in the economy. Therefore, the ministry has decided to allow depreciation claim within the same year with the idea of encouraging sales.

``Now, you could buy a commercial vehicle on March 30 and sell it on April 1, so that the balance sheet can claim full depreciation benefits,'' Guruswamy said. He indicated that the overriding need was to kick-start growth in the commercial vehicle as well as the transport sector. The government would soon announce guidelines to make it easier for non-banking finance companies to fund purchase of commercial vehicles by transport companies, he added.

Guruswamy said, NBFCs had a key role to play in this because they were the biggest financiers of commercial vehicles through the leasing and hire-purchase route. The finance ministry is pursuing this on a war footing by formally writing to all chief ministers to persuade their transport corporations to phase out old buses and buy new ones.

The majority ofbuses run by state transport corporations are over 15 years old, and these can be replaced by new ones, according to Guruswamy.

Hike stake, perk scrip

Buoyed by the foreign stake hike, Moser Baer India's scrip has doubled to Rs 34 in just fifteen trading sessions. The stock had been on the rise on rumours of Jardine Fleming Electra picking up 36 per cent stake in Moser Baer India. Volumes also shot up -- from a few hundred shares traded at the beginning of this month, the daily volume rose to 54,000 shares on December 18. Jardine Fleming Electra (Mauritius) has invested $8 million for acquiring 36 per cent stake in the computer floppy disc-maker. The private equity arm of Electra Fleming and Jardine Fleming, JF Electra is investing in India for the sixth time during the past three years.

The investment is aimed at part funding a factory for manufacturing blank optical media for export to United States and European countries. IFC Washington and MBIL have also pumped in 33.6 lakh shares asadditional equity towards the proposed facility. Debt for the project has been tied up from State Bank of India, Exim Bank and Industrial Development Bank of India.

Gains on sizeable order

The scrip of Infotech Enterprises Limited has zoomed from Rs 124.6 to Rs 193 in just 11 trading sessions. The volumes at the counter have increased substantially from 30,000-50,000 shares as against the average volumes of 3000-4000 shares. As per market sources, the company has bagged a contract from Analytical Survey's Inc for GIS conversion, consulting and mapping services. The contract is worth US $ 5.5 million (Rs 23.4 crore). As on September 30, 1998 the company's order book position for exports stood at Rs 36 crore. Hyderabad based Infotech Enterprises for the first six months of the current fiscal reported a net profit of Rs 2.47 crore. However the marketmen expect that the company to end the year with a net of Rs 7.5 crore. The company is a strong player in CAD/ GIS market. The company is currentlyengaged in digitisation and development services. The company has also diversified into photogrammetry and engineering modelling.