In Wartsila NSD's case traders are hinting at another 40 per cent jump in price the budget may offer a mixed bag for this company as it is very sensitive to import duties and these will be increased. Therefore the final impact will depend on the balance of positive benefits. The Wartsila NSD stock has already increased by 29 per cent since the first week of January. ABB and BHEL have seen a slowerincrease rising by 7.5 per cent; that too only in the last few days.

Vesuvius India finds support

Domestic institutions led by the Unit Trust of India have shown a lot of interest in Vesuvius India. The stock has been on an uptrend; appreciating from Rs 68 to Rs 114 within a week. The rise in the stock price is more a play on value rather than any bullish signal in the steel sector. Vesuvius has all the characteristics of a growth stock, which gives it an adventurous price earning multiple.

It has large free cash accruals, rapid organic growth, continuous additions to its product range and constant value addition. In addition, the company is virtually a debt-free company and its products are gaining greater acceptance in the steel industry. "

Consumers are more conversant with the benefits of CCRs now, which should push sales for Vesuvius," say's Satish Bhatt, investment analyst with Dolat Capital Market.

Vesuvius has been gaining market share is its basic product, continuous castrefractories (CCRs). Its market share is currently around 64 per cent and it is expected to gain another five per cent. The company, which took time to stabilise its operations in India, is now operating profitably for the last three years with new products being added continuously. The bullishness in the stock stems from the link that its MNC parent company, Cookson Plc, has with innovations in steel production. According to Bhatt, the company is moving away from simply being a supplier of CCRs to steel plants to being a total solutions provider, selling complete designs as well as additional products like slide gates. Currently, the only successful manufacturer of slide gates in India is IFGL, which holds a large chunk of the market.

"The new basket of products, which includes value-added products like monolithics are import substitutes and will greatly improve margins," says Bhatt.

A new perspective for Dr Reddy's

There is good news for Dr. Reddy's shareholders. It is a well-known fact thatthe company has created history of sorts by getting a milestone revenue from Novo Nordisk for its insulin sensitizer molecule DRF 2593. The first phase trial of the drug is almost complete and it will enter the second phase in the second quarter of this year. The company has launched another molecule DRF 2725 (which was licensed last year) and the first phase of trials are expected in the third quarter of 1999.

Although the company does not expect any milestone payment in the next three months, there are huge earnings expected in the next fiscal. The company has received three milestone payments aggregating around $ 6.25 million and there are up to eight milestones left. Payments are more as the product moves ahead. Further, the company is also conducting work in the high volume and high realisation Cox 2 Inhibitors, which should see it earnings shoot up in future.