The company has laready initiated steps to enhance its market share to around 50 per cent from the current level of 35 per cent in the commercial vehicles segment in the next two years. The growth in the past two years has been steady and the market share has improved from 27 per ecnt a couple of yearsago to 35 per cent in 1998-99. The growth plan to further increase its market share includes the launch of new models and expanding its marketing network.

The takeover prop

Rumours that Silverline Industries Ltd is in talks to acquire a Delhi-based software company should result in some buying interest in the counter. The stock, which has been trading in the Rs 180-230 band since April 1999, is likely to firm up in the coming days. The acquisition, if it goes through, will not only open up new markets in Canada, Europe and Japan but will also help the company gain crucial skills in client server technology.

According to marketmen, Silverline Industries has initiated the due dilligence process and is likely to make an announcement soon. The deal is estimated to finance through internal accruals -- Silverline Industries is comfortably placed so far as reserves are concerned. On an equity of Rs 37 crore, the company has reserves of Rs 110 crore. Recently, the company has opened a software facility (for webcentric and mutlimedia) at Pune and is planning to open a similar facility at Chennai in the next couple of years.On the bourses, the Silverline stock has been range-bound since March this year when the stock zoomed to Rs 400 on rumours of a US company picking up an equity stake. There were rumours at that time that Platinum Technology Inc., the seventh largest independent software vendor, would pick up a chunk of shares in Silverline. However, with Silverline's parent, Subra Holdings, clarifying that the tieup was purely technical, punters hammered the scip to below Rs 200. At present, the Silverline stock quotes at Rs 191.55. In the first-quarter of 1999-2000, the company is likely to clock a net profit of Rs 15-16 crore.

The de-merger fallout

Asea Brown Boveri's decision to hive of its power division into a separate company will dampen sentiments at the counter. At present, the scrip trades at Rs 356, enjoying a high PE of 65. The board of directors of ABB on Monday approved the demergerof its power generation (Powerco) business. The scheme will be effective on the last date of receipt of all approvals including sanctions or orders from Bombay High Court, obtained, passed and filed. From April 1, 1999, till the effective date, ABB will carry out the power generation work as trustees of Powerco. After the scheme takes effect, in consideration of the demerger and transfer of the business in favour of Powerco, the new company will issue and allot one equity share of Powerco of for every one equity held by the shareholders of ABB. This implies that the new company will have an equity base of Rs 41.48 crore. The net block of the power division was around Rs 50 crore in December 1998 (this is mainly the turbine factory in Baroda). Currently, ABB enjoys a premium on the bourses compared with its competitors Bhel and Siemens mainly on account of parentage. However, analysts fear that after the de-merger, the company will be engaged basically in transmission and distribution as well as generalelectric equipment, which is competitive and, hence, has low margins. This could trigger a selling pressure at the ABB counter in the coming sessions.

-- Sanjay Sardana, Nandita Datta and Sunita Nagpal