Moser Baer found that its outsourcing deal with a US company was the source behind its ascent by 1.8% to Rs 242.90 on BSE in early trades on Wednesday.
In fact, initial buoyancy saw the scrip hit a a high of Rs 243.40 earlier. Around 94,800 Moser Baer shares were traded on BSE in just a few minutes of trading.
On Tuesday, the scrip had jumped 4.2% to Rs 238.20 on volumes of 520,000 shares just as the company had announced the bagging of the outsourcing deal.
Moser Baer has been a proxy to a host of positive developments in the company over recent weeks starting early January 2003 when the European Commission decided to terminate anti-dumping proceedings against the company with respect to the manufacture of recordable compact disks. From a low of Rs 151.30 on 2 January 2003, the scrip has surged a whopping 60% in less than two months to the current Rs 242.90. The rally on the counter came amid some degree of oscillation.
On Tuesday, MBIL announced two separate deals with Imation Corp., expected to boost the company's revenues by $100 million annually. MBIL 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 Imation deal makes for increasing presence of MBIL in the US markets. MBIL has been eyeing an increasing share in the US market. Currently, it derives major revenues from European markets.
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 there.
MBIL is one of the world's largest manufacturers of optical and magnetic data storage products.
Late January 2003, MBIL said it was considering a price hike for 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 (Rs 2.97 billion). 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 Digital Vesatile Disk Recordable point of view, as it has seen a nearly 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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