The recognition as a `trade house' has driven Bhartiya International stock from Rs 20 to Rs 60. This, coupled with expectations of improved performance in the current financial, has led to this sharp spurt in the stock. The performance is expected to improve its performance by catering to new markets in Europe through its trading branch in Italy and the launch of its brand `Monk Italia', which has helped the company increase its exports. The new brand has generated close to 10 per cent of the turnover in 1998-99.

The company is also planning to introduce its range of leather garments and accessories like shorts, trousers, jackets, coats etc under its brand name Monks Italia in Italy and Europe. Apart from this, the company has also recently set up a 10 per cent subsidiary at Luxembourg and has already tied up a $ 3 million ECB to expand its Indian operations.

The market has been quick to spot this winner and the scrip in a short span has trebled to a high of Rs 71before slipping marginally to Rs 60. The company has recorded a 60.54 per cent jump in net profit to Rs 8.3 crore in 1998-99 against Rs 5.17 crore in 1997-98. Turnover was up 46 per cent to Rs 65.43 crore from Rs 44.83 crore.

SBT dips on poor performance

State Bank of Travancore has disappointed the market with a 31.64 per cent dip in net profit for fiscal 1999. The stock, which was trading at Rs 244 on June 28, shed 12 per cent in the following four trading sessions. After touching a low of Rs 214 on July 5, the stock saw a marginal rise to Rs 217 on July 6. However, on July 7, the counter saw no trading.

For fiscal 1998-99, the bank recorded a net profit of Rs 43.26 crore on a total income of Rs 1172.01 crore (Rs 1130.51 crore last year). The bank is hit by the recession in the industry and advances showed a marginal growth of only 6.28 per cent to Rs 4251.9 crore. The bank took shelter under investment which has shot up by 32.8 per cent to Rs 4384.01 crore. However, thanks to a 24.6 per centgrowth in NRI deposits, total deposits rose by 15.8 per cent to Rs 8865 crore. The bank has marked to market 100 per cent of its investment portfolio.

The capital adequacy ratio of the bank stood at 10.27 per cent and net NPA saw a major fall from 12.21 per cent to 10.8 per cent which is still high. The stock is currently trading (Rs 217) way below the bookvalue of Rs 762.2.

Exit option in Modi Xerox group firms

The revision in the offer price by Xerox Modi Corp for Modi Xerox and Modi Xerox Financial will provide shareholders with an attractive exit option. Both the stocks are likely to witness a rally on the bourses. But with no further revision in the offer price expected, the rise in the stock prices will be limited to the offer prices. Modi Xerox is currently trading at Rs 132.7 on Mumbai Stock Exchange(BSE). The scrip touched the Rs 150-mark on June 30. In the next couple of trading sessions, it is likely to touch Rs 150.

The offer price for Modi Xerox has been revised from Rs 135 to Rs150 and for Modi Xerox Financial Services from Rs 100 to Rs 115 per share. Modi Xerox and Modi Xerox Financial Services are being amalgamated and merged into Xerox Modicorp which is an unlisted company (which will continue to remain so even after the merger).

The open offer opened on June 17, 1999 and will close on July 16,1999. The merger of the three companies is part of a long term plan to ensure better control, availability of required investment and development of effective synergies for xerox business in India.

--Sanjay Sardana, Jai Kumar and Sunita Nagpal