According to a Delhi-based broker, "Even though these stocks are trading at their 52-week high, they are grossly undervalued. I feel that at current levels some stocks from the sector have prospects for decent appreciation."

Public sector Shipping Corporation of India, the country's largest company in this sector, is high on the government's priority list for disinvestment.

The stock has spurted about 36 per cent since December 29, 2000 to touch a 52-week high of Rs 36.30 on February 2, 2001. Apart from the disinvestment move, higher freight rates have also lifted sentiments at the shipping counters. Shipping Corp enjoys a strong presence in shipping and handles 70 per cent of the country's crude oil imports. During the past five years, SCI has performed better than its private sector peers in terms of aggregate profitability and return of capital. The company is also planning to add six vessels to its existing fleet at a cost of Rs 1200 crore.

Essar Shipping counter was also trading at its 52-week of Rs 9.55 as on February 2, after rising by over 22 per cent from its December 29 quote of Rs 7.80. According to brokers, "The spurt is due to its restructuring drive and joint venture agreement with Malaysia International Shipping Corporation for entering LNG transportation business." The company recently repositioned itself as a sea-logistics company and recast its board. It is planning to hive-off its coastal shipping division into a separate subsidiary. Besides, a 370 per cent jump in second quarter net profits has also attracted buying interest in the stock.

Garware Shipping is another stock which gained over 16 per cent during the period. Its stock was quoting at an attractive valuation of Rs 3.50 on February 2. The future seems to be bright and according to brokers, "This cyclical industry is currently on an uptrend, however, scrip-specific factors are dominating the movement in these counters."