The scrip of Tata Engineering and Locomotive Company (Telco), an automobile major, was up by 3.7% at Rs 202.25 on the BSE. The scrip ruled firm right from the beginning of the trading session. It surged on the back of high volumes, with 15.9 lakh shares changing hands in less than one-and-half hours of trading.

On the other hand, Tata Iron and Steel Company (Tisco) (up 4.1% to Rs 165.45) firmed up in early afternoon trades. The scrip of the steel major rallied amid high volumes, with 17.9 lakh shares changing hands on the counter on the BSE. Both Tisco and Telco scaled their 52-week high today.

Dealers said the surge in these two stocks on the back of heavy volumes was due to an upward re-rating for Old Economy stocks in general. "These two scrips belonging to the Tata group were earlier quoting at abysmal valuations. Given the fact that they belong to a prominent group, the valuation was quite cheap," said a market analyst. Foreign institutional investors (FIIs) could be acquiring the stock, he added.

Both the stocks have staged a smart rally in the last few sessions on the back of improved financial results for FY 2003 and improve future outlook. For instance, Telco has surged by 34.6% from a low of Rs 150.20 on 23 April 2003 to the current Rs 202.25. Tisco has gained 29.5% in slightly over 2 months from Rs 127.75 on 24 April 2003 to the current Rs 165.45. Some of the local funds like Unit Trust of India, and Life Insurance Corporation of India are, however, booking profit in these two stocks at higher levels, dealers said.

A revival in global steel prices, allocation of higher quota from China for steel imports from India and the company's focus on value added products has ensured a firm trend on the Tisco counter, dealers said. Besides, analysts remain bullish on the stock. There is also a general revival of interest in commodity stocks on the bourses.

For Q4 ended 31 March 2003, Tisco recorded a massive 283% rise in net profit to Rs 469.08 crore (Rs 122.47 crore) on a 39.5% increase in net sales to Rs 2,664.76 crore (Rs 1,911.48 crore). The Q4 net profit as well as net sales beat projections made by a capitalmarket.com poll - a rise of 177% to 252% in net profit to Rs 339.5-431 crore and net sales of Rs 2,459 crore-2,555.3 crore.

On the other hand, revival of demand in the commercial vehicles sector, which is Telco's mainstay, has let to the recovery on the Telco counter. Recent reports said that Telco has increased its commercial vehicle production by 15-20% to around 11,600 units for June 2003, to cope up with rising demand.

For May 2003, Telco reported an impressive 67.9% jump in total vehicle sales to 21,929 units. Domestic sales of medium and heavy trucks and buses combined jumped by 29.3% for the month to 6,389 units. Light commercial vehicles sales soared by 55.3% to 3,411 units. The company sold 6,772 Indica cars, compared to 2,995 units in May 2002. Its recently launched Indigo car notched up sales of 1,983 units. Besides, 2,160 utility vehicles were also sold.

On a month-on-month basis, too, total sales improved by 46.4%, from 14,979 units in April 2003.

For the year ended 31 March 2003, Telco staged a turnaround with a net profit of Rs 300.11 crore, compared to a net loss of Rs 53.73 crore in the previous year. Total income increased by 21% to Rs 9,111.26 crore from Rs 7,525.92 crore in FY 2001-02.

On a consolidated basis, for the year ended 31 March 2003, the Telco Group's net profit works out to Rs 298.67 crore (loss Rs 107.19 crore) on a total income of Rs 9,627.92 crore (Rs 7,934.58 crore).