The stock has been holding on despite the fact that it has quadrupled in the last couple of months. The reason for the strength in the stock is that the pattern of growth is expected to accelerate in the remaining quarters. "The second and fourth quarters are traditionally very good for ALL and contributes 24 per cent and 34 per cent of total volumes," says Abhishek Tiwari, research analyst, First Global.

In contrast, the first quarter contributes under one fifth of total volumes. Analysts expect the operating margin to rise to 9 per cent by the end of the year, in tandem with the growthin volumes.

Revathi CP

The country's only supplier of mounted drilling rigs used in open cast coal mining reported a flat first quarter (compared with the corresponding first quarter) for 1999-2000. The domestic market for blast hole drill rigs has been subdued for sometime now, and in general, it has been expected that the current year may not result in too much growth over the previous year, which was a record one. In the first quarter so far, topline growth has only been to the extent of 6 per cent, while the profit before tax remained virtually unchanged at Rs 4.7 crore. Though being a high tax-payer, the imposition of surcharge on corporate tax has meant a higher tax outflow and consequently, lower net profits.

Even in the previous financial year, the domestic market did appear to be a little sluggish. It was only a stupendous performance from RCP in the export market that yielded above average growth rates. Exports tripled in value from Rs 4 crore to Rs 13.2 crore. Including these figures,the topline grew by 33 per cent.

Excluding the export figures from both the years, it showed a topline growth from domestic operations of 15 per cent. Industry sources have indicated that in the current year, the company has received export orders amounting to Rs 15 crore, which will be executed in the latter periods of the year.

Last year's profit growth of 39 per cent also was driven by the jump in exports. The current year's performance must be viewed in the light of the large jump in volumes and revenues last year, which enhanced the earnings base (EPS rose from Rs 33 to Rs 43). Thus, the company could be hard pressed to meet last year's performance. Domestic earnings are determined almost entirely by the offtake from Coal India and its subsidiaries, besides the Neyveli Lignite Corporation.

The stock had been subdued a little after the announcement of the last year's results, fearing lower growth rates in the current year. But in the run-up to the 99-2000 first quarter, the stock has been buoyant,trading between Rs 420 and 450, on above average volumes.