Valecha Engineering net profit rises 19.61% in the June 2008 quarter

Valecha Engineering recovers from 52-week trough as promoter hikes stake

Valecha Engineering surged 4.81% to Rs 23.95 at 13:44 IST on BSE, having recovered from a 52-week low of Rs 21.90, on increase in promoters' stake in the firm.

At the day's low of Rs 21.95, the stock had declined 4.16% before the announcement of the hike in stake by promoters during trading hours.

Meanwhile, the BSE Sensex was up 264.39 points, or 3.24%, to 8,424.79.

On BSE, 8,801 shares were traded in the counter. The stock had an average daily volume of 14,421 shares in the past one quarter.

The stock hit a high of Rs 24 so far during the day. The stock hit a low of Rs 21.90 so far during the day, which is 52-week low for the counter. The stock hit a 52-week high of Rs 132.67 on 22 April 2008.

The small-cap stock had underperformed the market over the past one month till 9 March 2009, declining 18.97% as compared to the Sensex's 14.85% fall. It had also underperformed the market in the past one quarter, declining 23.96% as compared to the Sensex's 10.94% fall.

The company's current equity is Rs 17.93 crore. Face value per share is Rs 10.

The current price of Rs 23.95 discounts the company's Q3 December 2008 annualized EPS of Rs 5.49, by a PE multiple of 4.36.

Valecha Investment, a promoter group, has increased its stake to 36.16% in the company after acquiring 2.35 lakh shares from the open market on 27 February 2009. Increase in stake by promoters in a company helps bolster investor confidence.

The total promoter shareholding in the company stood at 43.01% as on 31 December 2008.

Valecha Engineering's net profit fell 28.9% to Rs 2.46 crore on 17.7% increase in net sales to Rs 136.79 crore in Q3 December 2008 over Q3 December 2007.

The company is primarily in the road construction business, from which it derives 70% of its revenues. Its road projects are present across many states in the country.

NOTE : Company also holds substantial investments in Jyoti Structures.