Heard on the Street

MFs see value in Ambuja Cements on demand rise
After underperforming the broader market during the recent bull run, cement pivotal Ambuja Cements shares have been seeing good action despite generally sluggish market conditions in the past few weeks. According to market sources, institutional investors, mostly local mutual funds, have been accumulating the stock on easing of concerns over excess capacity in the industry, cement prices and margins.

Sentiment has improved on hopes of a rise in cement demand amid rapid infrastructure and housing development in the country, according to analysts. Last month, Genesis Asset Managers, a foreign fund, bought a few lakh shares to raise its stake beyond 5% of the company’s equity capital. Ambuja Cements shares have risen 13% against 0.2% rise in the Sensex in a month.

Flurry of bulk deals lift Thinksoft
Despite sagging performance of high-profile issues post-listing, investors in some mid-, and small-sized IPO continue to receive outsized returns. For instance, Thinksoft Global Services has more than doubled over its issue price of Rs 125. The stock closed at Rs 285 on Tuesday, up 2% from previous close. According to brokers, the company, which is into the niche segment of software testing services, has been attracting buyers in anticipation of some corporate development.

The interest can be gauged by the flurry of bulk deals in the past couple of weeks. Asenior company official, however, declined to comment. Similarly, others like Jindal Cotex and Astec Lifesciences have also offered them much better returns than many other relatively large-sized issues, currently languishing below their respective offer prices.

Investors bet on strong earnings of sugar firms
Even as the broad market is struggling for direction, some of the savvy players are busy loading up on sugar stocks. One of the closely-watched developments is whether the Balrampur Chini management will eventually capitulate to either Bajaj Hindusthan or Shree Renuka Sugars. Traders tracking the counter say a deal is unlikely before 3-4 months at least, as it is the peak season for the sector, and that influences valuations. Even otherwise, traders are betting that strong earnings for the current quarter as well as the next will keep shares of sugar companies in demand. Shares of Shree Renuka rose 3.4% to close at Rs 215.60. Bajaj Hindusthan rose 1%.

Contributed by Vijay Gurav, Apurv Gupta & Santosh Nair