Nothing has worked for B2 group stocks on the Bombay Stock Exchange as much as good quarterly figures.
Every additional rupee earned in net profit in the April-June 2003 quarter has translated on average into a Rs 34 rise in market capitalisation in the last four months.
A study of 62 companies with minimum net profit of Rs 50 lakh (5 million) each at the end of the quarter shows an aggregate appreciation of over 125 per cent in their scrip prices between April and July 2003.
These 62 firms posted a 40.1 per cent growth in their aggregate net profit to Rs 90.92 crore (Rs 909.2 million) in the quarter, against Rs 64.88 crore (Rs 648.8 million) in the same quarter last year.
Their market capitalisation increased 125.4 per cent, from Rs 670 crore (Rs 6,700 million) on March 30, 2003, to Rs 1,577 crore (Rs 15,770 million) on July 31.
Of the 62 scrips, as many as 32 appreciated over 100 per cent during the period. Every Re 1 increment in their net profit for the quarter has translated into additional market capitalisation of between Rs 5 and Rs 201.
Another 12 stocks posted returns between 51 per cent and 100 per cent, while 18 gained between 18 per cent and 50 per cent.
Granules India benefited the most in the rally, with every additional rupee in net profit resulting in a rise of Rs 201 in the market value of the company.
It posted a net profit of Rs 1 crore (Rs 10 million) in the first quarter, against Rs 83 lakh (Rs 8.3 million) in the same quarter last year. The scrip price appreciated 151 per cent from Rs 28.95 to Rs 72.60.
What made the difference was a proposed dividend of 10 per cent and completion of its state-of-the-art granulation facility at Gagillapur, Hyderabad.
Tanu Healthcare tops the gainers' list with over a three-fold rise (473.53 per cent) in its stock price -- from Rs 1.70 on March 31 to Rs 9.75 on July 30.
Its net profit jumped from Rs 20 lakh (Rs 2 million) in the first quarter of 2002-03 to Rs 1.28 crore (Rs 128 million) in the April-June quarter of 2003.
Valiant Communications came second with a 471 per cent rise in its stock price to Rs 34.25, after it reported a 458 per cent rise in net profit to Rs 1.34 crore (Rs 13.4 million).
Torrent Cables registered a net profit growth of 447 per cent to Rs 3.83 crore (Rs 38.3 million). Its share price went up 426 per cent from Rs 5.75 to Rs 30.25.
