InvestorQ : Why have MTNL and HMT been in the limelight in the last few days in the stock markets and why have the prices been rising so rapidly?
Rutuja Nigam made post

Why have MTNL and HMT been in the limelight in the last few days in the stock markets and why have the prices been rising so rapidly?

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1 month ago
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It is no secret that in the last few months many PSU stocks have done extremely well. While the large PSU stocks in the oil space and the PSU banks have been in the limelight, there have been some very unlikely movers too. Two such examples are that of telecom company MTNL and Karnataka based watch and machine tools manufacturer, HMT. If you look at the stocks, MTNL and HMT rallied up to 17% to touch 52-week highs during the week.

That is not all. The rally in the last few weeks is a lot more interesting. For example, both MTNL and HMT have gained close to 80% in market capitalization in a span of less than 3 weeks. All this has happened at a time when the benchmark indices like the Nifty and Sensex have struggled to find direction. What is it that has resulted in such a significant rally in these two stocks?

Let us talk about MTNL first. After it undertook the massive VRS last year, the company has been trying to revive its operations but the digital business has apparently changed a big deal. However, the latest rally in MTNL came after reports that the government had identified real estate and land assets of MTNL to set in motion the PSU asset monetisation programme for the fiscal year FY22. Land monetization was on the Budget 2021 agenda.

There is something interesting happening in HMT too. HMT manufactures a lot of machine tools that are of use in the food processing sector in India. The rapid growth in the food processing industry is fuelling the demand for equipment in the sector and that is giving an indirect boost to machine tools. After all, demand for machine tools is derived demand and this demand boost is keeping the rally in HMT buoyant in the last few weeks.

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