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Thursday, July 16, 2009

Stock rallies or manipulation?

1)Scripscan:Rich Capital & Financial Services Ltd

Story:Kanpur-based Rich Capital & Financial Services Ltd is a non-banking financial company. It has no business worth talking about. In the quarters ending June 2008, September 2008 and December 2008, the company posted sales of around Rs10 lakh each and an operating profit of Rs3 lakh, Rs2 lakh and Rs1 lakh, respectively. In the March 2009 quarter, the company has posted sales of Rs10 lakh and an operating loss of Rs30,000. But BSE-listed companies like these are ripe for manipulaion. The stock has zoomed a humungous 900% between 6 November 2008 and 16th july. Neither the regulator nor the BSE appear concerned.

2)Scripscan:KELTECH Energies Ltd

Story:Formerly known as Karnataka Explosive Limited, Keltech Energies Ltd is an arm of the Chowgule group of Goa, which is into mining, shipping, shipbuilding, chemicals, explosives, expanded perlite, breweries and many other industries. The company claims to manufacture watergel cartridge explosives, bulk emulsion explosives, mono methyl amine nitrate (MMAN) solutions and a variety of expanded perlite products which are also being exported to other countries. It was making regular losses. What is the size of its operations? It has booked an operating loss of Rs37 lakh and Rs34 lakh and sales of Rs22.49 crore and Rs21.01 crore in the June and September 2008 quarters, respectively, whereas in the December 2008 quarter, the company booked sales of Rs29.46 crore and operating profit of Rs1.35 crore. In the March 2009 quarter, the company has posted amazing sales of Rs40.19 crore and operating profit of Rs7.21 crore. Surprisingly, their revenues through perlite products have rocketed to Rs8.24 crore in the March 2009 quarter from Rs1.32 crore in the March 2008 quarter. Between 27 March 2009 and 16th july 2009, the stock has surged by a massive 417%.

2)Scripscan:Oricon Enterprises Ltd

Story:Mumbai-based Oricon Enterprises Ltd is a part of the Parijat group, which also has Kopran, United Shippers, Shinrai Toyota as group companies. Oricon is into manufacturing petrochemical products and developing real estate. But what could possibly explain why the stock has gained a massive 500% between 8th May and 16th July.Financially, this company is really weak. For the March, September and December 2008 quarters, the company posted sales of Rs6.07 crore, Rs10.81 crore and Rs11.43 crore, respectively, but booked an operating loss of Rs4.69 crore, Rs94 lakh and Rs49lakh in the respective quarters. You can keep wondering why stocks like these suddenly shoot up for no reason. Unless there is a thorough investigation at the Exchange level, we will all be groping in the dark. Will the new chairman of BSE find the time to look at these blatant cases of manipulation?

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