Graphite India Ltd. looks attractive

By G. S. Roongta
After ten consecutive days of rise in stock prices – perhaps the longest, the stock market made a halt on Thursday, 4th
October 2007, having witnessed a very volatile session a day earlier on Wednesday, 3rd October 2007, resulting in a record
two way movement of nearly 1500 points with the BSE Sensex touching a new high of 17953.07 only to fall to 17288.41
and rise again to close at 17847.04 through intra-day swings.
Despite such never before witnessed volatility fuelled by record buying by FIIs over the last few days, there was no
specific reason for the market to turn so bullish as far as the CNX Nifty was concerned. Going by detailed analysis, there
were hardly 40 stocks that participated in fuelling the bull sentiment. Prominent among them were the Reliance Group
shares: RIL, Reliance Energy, Reliance Communications, Reliance Petroleum, Reliance Capital, Reliance
Natural Resources followed by capital goods, realty and bank stocks like ICICI Bank, SBI and HDFC
Bank.
G.S. Roongta
As such, trading was very restricted and at times very narrow. Even the advance-decline ratio was
stretched without showing any specific positive bias vis-à-vis the grand rise of the Sensex stocks.
In the A Group, 119 stocks rose while 101 declined. In the B1 & B2, 526 stocks rose while 983 declined. In
the small-caps, 466 stocks rose while 611 declined.

Dividend: GIL has rewarded shareholders fairly well with 100% as interim dividend and another 50% as special and final
dividend taking together as dividend totalling 150% for FY07.
Market Price: GIL’s share price, which had touched over Rs.300 in early 2005-06 for Rs.10 paid-up share is still hovering
around or below its two years high. Since its price has fully consolidated for quite a long time and the major shareholding
lies in strong hands, there is no reason why the stock should lie low any further.
The current share price of Rs.56 to Rs.58 looks very attractive in the above context and readers may take a position based
on their ability and power to hold on till they reap a good harvest.
I may mention here that I had earlier recommended Modern Steels Ltd. at cum bonus price of Rs.76 in the issue dated
Aug. 27 – Sept. 2, 2007.
The price of this stock at ex-bonus is now ruling around Rs.54-56 and means cum-bonus price at Rs.140, a fair gain of
nearly 100% in just one month. Those who wish to book profit may do so without blaming later on that its share price has
come down. It is the readers’ choice to hold or book profit. It may also be noted that Modern Steels when recommended
witnessed an upper lock for weeks together and is again in the upper lock now for the last three trading sessions.