Mico's Q1 results were the sole reason for the scrip's jump on Wednesday, what with net profit zooming up over 200%.
The scrip of the auto ancillary maker leaped up 5.4% to Rs 4,150 on BSE in morning trades. The scrip had hit a high of Rs 4,180 earlier. Just 94 Mico shares were traded on BSE in a little over an hour of trading.
Mico has staged a remarkable recovery on the bourses over the last few years. However, the stock remains extremely thinly traded. Average daily volumes in the stock over the last one year was just 228 shares on BSE.
From a low of Rs 2,820 on 10 October 2002, the stock has witnessed a sustained surge to the current Rs 4,000-level. The rally on the counter came amid minor intermittent corrections.
Mico has reported buoyant Q1 results. On an 18% growth in net sales to Rs 432.08 crore (Rs 364.83 crore), its profit after tax has surged 212.9% to Rs 52.29 crore (Rs 16.71 crore). Other income increased substantially, by 73% to Rs 15.05 crore from Rs 8.69 crore. But even after factoring the rise in other income, the growth in net profit is stupendous.
Mico's fundamentals have been improving in view of the revival in the commercial vehicles sector. Mico is an auto-ancillary major with products catering mainly to the commercial vehicles and tractor industries.
The company was initially founded as a manufacturer of spark plugs. But now its product portfolio has extended to diesel fuel injection pumps, car audio systems, single and multi cylinder pump, injectors, valve nozzles, nozzle holders, filters, filter inserts, glow plugs, glow indicators, glow resistors, starter motors, electronic security, communication and imaging systems. Mico currently has an 80% market share in the diesel fuel injection pumps segment.
The sharp increase in demand for commercial vehilces has been driven by an increase in replacement demand, growth in IIP (manufacturing and mining), and infrastructure development (highway and housing) projects.
The stake of German-based Robert Bosch group (of 56.99%) was increased to 60.55% after the company brought back its shares in February 2002. In February 2002, Mico bought back 2 lakh shares from shareholders at a price of Rs 2500 per share. Hence, the share capital stood reduced to Rs 32.05 crore. This was Mico's third buyback. In the first leg, in May 2000, the company bought back 2 lakh shares at a price of Rs 4,200 per share. In the next leg in January, 2001, it went in for an additional buyback of a further 2 lakh shares at a price of Rs 3800 per share.
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