MC Inside Edge: Voltas bulls persistence pays off, Inspirisys minority shareholders seek pound of flesh, Reliance Power back in focus

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Cool bulls

Voltas shares have been on a roll of late. Conviction in the stock seems to have gone up in the last couple of sessions after the company surprised the Street with a strong operating performance in the March quarter. The proprietary desk of the Pearl brokerage had been steadily accumulating stock for HNI clients over the last few months even as most analysts tracking the sector were skeptical. The bet has paid off handsomely. Volumes may have risen sharply, but it remains to be seen if the company has been able to improve its margins along with market share. Price war is a constant feature of the consumer durables sector, and industry players say that every year one player usually plays spoilsport, forcing the others to follow suit. Improvement in operating margins will be key to the stock being able to sustain recent gains.

Powering up

The frenzy in power stocks may have died down for the time being, but Reliance Power appears to be making a quite comeback. No fund manager is even talking about the stock at the moment; rather much of the gains have been thanks to the support of market veterans who once owed (and perhaps even now owe) allegiance to the top boss. After a spate of bad news over the last few years, friendly circles are said to have stepped up their market dealings and renewed ties with old loyalists. While the fortunes of the group as a whole may have nosedived, market chatter is that the top boss still enjoys the confidence of the powers-that-be, and that there could be some favourable developments coming the group’s way post-election.

Inspired fightback

Inspirisys Solutions, which is looking to delist from the stock exchanges through a reverse book building offer, last week raised the floor price to Rs 71.15 from the earlier Rs 68.70. In the past, some HNIs owning the stock had sent a legal notice to the stock exchanges alleging foul play in the way the stock was continuously subject to surveillance mechanisms, and fair value discovery was being hampered. At least two HNIs with a substantial holding in the stock are said to have dug in their heels and have been rallying other shareholders through WhatsApp messages, asking them to quote a price significantly higher than the floor price. An interesting battle appears to be on the cards.