The former is a turnaround story and its earnings performance in the last few quarters was impressive. The latter plans to expand into new areas and may be a potential disinvestment candidate. At Rs 49, the stock trades at a price-earnings multiple of around six times its latest annualised earnings per share. The company's performance for the first three quarters of 2000-2001 was fairly impressive. Given its position in the industry and the scope for improvement in the infrastructure sector, the performance over the next few quarters is expected to be above par.
Shareholders can stay invested and fresh investments can be considered at current levels.
Operating margins rose from 1 per cent to 13 per cent. The company also managed to come out of the red and post an earnings after tax of Rs 10.35 crore against a Rs 2.11-crore loss the previous year. On the equity base of Rs 15.39 crore, the annualised earnings per share works out to Rs 8. Esab India is one of the largest players in the welding equipment industry. It is a major producer of welding electrodes, consumables and equipment.