Moser Bear India rose sharply on Tuesday after the company announced two seperate deals with Imation Corp, that is likely to boost its revenues by $100 million annually.
The scrip of the floppy/compact disc maker was up by 4.2% at Rs 238.55 on the BSE, close to the day's high of Rs 239.80. 402,000 shares changed hands on the counter by late-afternoon trades.
The scrip has witnessed volatility after rallying from an early 2003 low, in the last few sessions. It surged early this year after the European Commission decided to terminate anti-dumping proceedings against the company with respect to the manufacture of recordable compact disks (CD-R's). From Rs 151.30 on 2 January 2003, it leaped 52.9% to Rs 231.40 on 7 February 2003.
Today's surge on the Moser Baer India counter comes after the company announced that it has signed a strategic long-term sourcing deal with Imation Corp., one of the largest data storage media companies in the world, to provide high quality optical media solutions.
In another significant development, both the companies have entered into a strategic joint venture in which 51% of the equity will be held by Imation Corp. The JV, entailing a total investment of $10 million (Rs 48 crore), will focus on customer servicing, long-term technology transfer and joint R & D.
Both these developments could result in incremental revenues of approximately $100 million (Rs 480 crore) per annum for MBIL, catapulting it into a global leadership position in the optical storage media industry, MBIL said.
"The marriage of Moser Baer's competence in process technology, rapid commercialisation and world class manufacturing with Imation's global presence, strong technology and intellectual property portfolio, creates a very powerful combination," said Deepak Puri, CMD, MBIL.
"This deal strengthens Moser Baer's global competitive positioning and will significantly enhance future earnings flows, thereby benefiting all stake holders," he added.
MBIL got a big boost early this year after the European Commission decided to drop anti-dumping duty proceedings with respect to recordable compact disks. MBIL has a major exposure to Europe, exporting 45-50% of its products.
MBIL is one of the world's largest manufacturers of optical and magnetic data storage products.
In late January 2003, MBIL said it was considering a price hike for its products in Q4 (ending 31 March 2003) following the improving market dynamics and favourable outcome of the anti-dumping investigations. So far, the company's performance in the current fiscal has been affected by pressure on profit margins, which, in turn, has been due to a fall in product prices.
For Q3 ended 31 December 2002, MBIL posted a 7.8% rise in net profit to Rs 64.88 crore on a 74% growth in total income to Rs 297.91 crore. The company has maintained guidance of a 10% growth in earnings for FY 2002-03.
The December 2002 quarter proved to be satisfactory for MBIL from the DVDR (Digital Vesatile Disk Recordable) point of view, as it has seen nearly a 300% growth in shipments to 7,00,000 units. The company expects a majority of DVDR shipments for the current fiscal to take place during the fourth quarter. It expects volumes during this quarter to be about three times the volumes in the preceding three quarters. The company reiterated its guidance for the full year of 6-8 million units of DVDR shipments.
On 20 January 2003, MBIL clarified that it had an exposure of about Rs 3 crore to Emtec Consumer Media. The company also said that it had no business dealings with Emtec Magnetics, which has filed for reorganisation and insolvency protection.
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