Share prices of RIL, L&T up in November

Pradip Kumar Dey, FE Research Bureau

With the news of Reliance selling entire stake in L&T to Grasim, share prices of Reliance and L&T increased significantly in the time period between November 1, 2001 and November 19, 2001. The share prices of these two companies increased more or less steadily throughout the month of November. But the share price of Grasim declined steadily during the above period. The significant increase in share price was noticed in the case of L&T followed by Reliance. The share price of L&T increased by 23.4 per cent to Rs 203.05 on November 19, 2001 from the level of Rs 164.6 on November 1, 2001. The highest increase (10.0 per cent) in share prices of L&T was observed on November 8. This can be justified with the second quarter profit performance of the company. The net profit of L&T has increased by 223.9 per cent to Rs 40.46 crore during July-September 2001 from the level of Rs 12.49 crore during July-September 2000.

Similarly, the share price of Reliance Industries also increased by 17.5 per cent to Rs 305.20 from the level of Rs 259.8 during the same period.

The net profit of Reliance Industries increased by 10.5 per cent to Rs 411.00 crore during July-September 2001 from the level of Rs 372.00 crore during July-September 2000.

But the share price of Grasim decreased significantly by 5.7 per cent to Rs 269.05 on November 19, 2001 from the level of Rs 285.30 on November 1, 2001. The second quarter net profit of Grasim declined by 58.6 per cent to Rs 31.63 crore during July-September 2001.

In terms of market capital, the highest increase was witnessed in the case of L&T followed by Reliance Industries. The market capital of L&T increased by 24.36 per cent to Rs 5,049.04 crore on November 19, 2001 from the level of Rs 4,092.94 crore on November 1, 2001.

Similarly, the market capital of Reliance Industries also increased by 17.5 per cent to Rs 32,168.08 crore from Rs 27,382.92 crore during the same period. But in the case of Grasim, the market capital decreased by 5.7 per cent to Rs 2,466.92 crore on November 19,2001.