The Hindu Business Line : Optical fibre stocks rally on global positive outlook

STOCKS of optical fibre manufacturing companies rallied on the bourses on Monday with a positive outlook emerging globally for the sector, which has been in the doldrums for a couple of years.

The optical fibre sector has witnessed some rough weather in the recent past due to a slump in the telecom sector leading to a sharp fall in prices, both international as well as domestic.

Among stocks that touched the upper circuit in today's trading were Aksh Optifibre, Birla Ericcson Optical Ltd and Vindhya Telelinks.

Aksh Optifibre closed at Rs 24 on the BSE, up 20 per cent and at Rs 23.50 on the NSE, up 20.20 per cent. Birla Ericcson rose by 20 per cent on the BSE to close at Rs 15.60 and 20.31 per cent on the NSE, closing at Rs 15.70. Vindhya Telelinks gained 20 per cent on the BSE at Rs 27.90 and 20.17 per cent on the NSE at Rs 27.70 while Sterlite Optical Technologies gained 13.10 per cent on the BSE to close at Rs 47.50 and 12.86 per cent on the NSE, closing at Rs 47.40.

Market experts also attributed the upward movement at these counters to an overall correction given the recent positive mood in the market, apart from the improvement in global outlook for the sector.

According to Mr Hanu Bhatia, Vice President-Equities, Parag Parekh, ``These stocks have been undervalued for some time and what we are seeing now is a correction. They have moved up on value picking."

Also, in terms of sector-specific outlook, there is general perception building up in the market that, globally, demand is picking up and optical fibre prices are seeing some stability and are likely to firm up going forward.

"There is a sense in the market that global optical fibre prices are firming up. In fact, one of the largest optical fibre and cable products manufacturers, the US-based Corning Inc, during its result announcement recently has issued a positive outlook for the year," said an analyst with a local brokerage.

On the domestic front, there is a talk of various telecom companies such as MTNL and BSNL coming out with their annual tenders for optical fibres.

Another positive for these companies is the order flow from Reliance Infocom, which is expected to further boost domestic demand, said analysts.

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