Daily volumes at the counter have shot up to over 14,000 shares in the last three trading sessions. On Tuesday, the scrip fell to Rs 77.95, but volumes continued to be high at 15,900 shares. According to marketmen, Atco is expected to announce its foray into the IT sector soon. ``The company is negotiating for for acquiring a profit-making software company,'' says a DSE broker.

Atco stated its intention of entering the field of information technology when it outlined its strategy of entering contemporary, knowledge-oriented, technological businesses. The company plans to adopt acquisitions, mergers and takeovers to enter the IT rat-race. According an analyst tracking the company, ``As the company is a late entrant in the IT arena, the M&A route coupled with its inherent strength of an already established distribution network could give an edge to the company.''

However, analysts fear that in-order to finance the takeover, Atco will have to either dilute its equity or go in for debt. Analysts expect the company to go in for an equity expansion. The company's equity currently stands at Rs 12.41 crore. The company manufactures electronic weighing machines and has a 65 per cent market share.

Over the years, Atco Industries has expanded and strengthened its market presence throughout the country by establishing brand equity, widening distribution network and making customer after sales services more efficient. The company has reported a net profit of Rs 4.68 crore on a turnover of Rs 61.89 crore for first six month of the current fiscal. The scrip is trading at a PE of 10.85 times. Considering the company's foray into the IT sector, the stock may continue it the bull orbit for quite some time.