HDFC Bank

: Banking stocks, proxies for the economy as a whole, have had a rough time in FY 1999. HDFC Bank is a big exception. Although it recorded a 3.2 per cent drop in market capitalisation from Rs 1,479 crore to Rs 1,382 crore during 1998-99, the performance should be considered excellent in comparison to other bank stocks. For instance, SBI's market capitalisation was down by 24 per cent. Similarily, Bank of India, Oriental Bank of Commerce and Bank of Baroda recorded more than a 50 per cent drop in their market capitalisation. One of the best publicsector banks, Corporation Bank, showed a 36 per cent decline in market capitalisation.

News about the scrip being a potential entrant on Nasdaq helped the stock attract sustained buying interest. Factors like Chase Mannhattan picking up around 14 per cent stake in the bank also made a contribution, on expectations of an open offer. With Chase's purchase price being Rs 54, there is now a floor to the stock.

Punjab Tractors Ltd:

PTL is another stock where the performance should be considered excellent. The company's market showed a growth of more than 100 per cent. And the credit goes to the management. When the tractor sector recorded a negative growth, the company managed to show a 20 per cent plus growth in volumes. The company has grabbed the number two position from Escorts in terms of volumes during the third quarter of this year. An excellent hold on the western market has come in handy for the impressive volume growth. The stocks of other players in the sector--M&M, HMT andEscorts--showed a negative growth in their market cap.

MRF

: Like HDFC Bank, MRF too showed a negative growth of 3.5 per cent as far as the market capitalisation is concerned. As on March 31, 1999, the company's market cap stood at Rs 852 crore. But if one were to consider the sorry state of the tyre industry, the performance should be considered impressive. Thanks to a slowdown in demand, sales growth has been the lowest in recent times. The impact of stiff competition was also felt on the profit margins of the major players. However, companies like MRF managed to maintain their margins on account of stiff cost controls. A re-rating of the stock has also helped. Trading volumes in this counter have shown a sharp jump in the second half of the last fiscal. Lack of choice in the tyre sector too seems to have made its contribution. While MRF showed a marginal decline, Apollo Tyres' market capitalisation recorded a sharp dip of 30 per cent to Rs 245 crore.

Siemens

: Siemens has also beenable to record a 16.5 per cent jump in its market capitalisation. Besides expectations of a turnaround in performance, the major factor which has played a role is the re-rating. And that is mainly on account of the high valuation of its software division. The same thing has happened in the case of Mahindra & Mahindra.

Voltas

: In the case of Voltas, restructuring by way of an exit from non-core areas has been the main booster for market capitalisation. Apart from generating more cash, the selling off of non-profitable business will also help the management to focus on its core business. And that has gone down well with the market. The market capitalisation for Voltas recorded a 128 per cent jump to Rs 336 crore.

Wartsila NSD

: Among the list of non-pharama-software stocks which showed an impressive jump in market capitalisation, Wartsila NSD's name is prominent. Wartsila's market capitalisation recorded a 59 per cent growth to Rs 363 crore. The results for December 1998 were far fromimpressive. In fact, during the third quarter of 1998, the company posted a gross loss and barely managed an operating profit. It was the fourth quarter results which helped the company to offset its gross loss. During the fourth quarter, it posted a net profit of Rs 7.8 crore--marginally lower compared to the Rs 8.3 crore posted during the full year in 1997.

What has helped the stock is optimism about the results in the current year as the company had an excellent orderbook position. As on January this year the orderbook position was Rs 150 crore--three times the Rs 50 crore as on January 1998. The appreciation in market cap is mainly on expectations of higher future earnings.