Yokogawa Blue Star advanced for the second straight session on Saturday on buying support, following reports of the Indian partner in the company is planning to sell equity stake to its Japanese counterpart.

By 11:35 IST, the scrip of the distributed process control systems and instruments firm was leaped by 9.55% to Rs 48.75 on the BSE, but off its early high of Rs 50.05. A total of 11,129 shares changed hands on the counter. In two sessions, the scrip rose by 31.4% from Rs 37.10 on 20 March 2003.

The sustained interest in the scrip was purely on reports that the foreign partner in the joint venture will buy out the entire stake of the Indian partner. These expectations got a boost after Blue Star (Indian partner) said that a meeting of its board of directors will be held on 27 March 2003, to consider the proposal for sale of its equity stake in Yokogawa Blue Star to Yokogawa Electric Corporation, Japan. Yokogawa holds a 40% equity stake in YBSL, while Blue Star's holding is at 28.65%.

YBSL manufactures and markets, distributed process control systems and instruments. The company has four business units - systems, products, services and solutions. In systems, the company enjoyed a market share of around 35% for the past couple of years. In the current fiscal, the share exceeds 40%. In products, the company enjoys a market share of 25% in transmitters. In solutions, the share is around 5-10% and the target is to add around Rs 20 crore to the top line in this segment. The company is also planning export of engineering services for DCS to the Yokogawa group of companies. This segment has registered a growth of 30-40% as compared to last fiscal.

For the third quarter ended 31 December 2002, the company recorded a net profit of Rs 0.85 crore, compared to a loss of Rs 0.93 crore. Net sales dropped by 15.77% to Rs 24.46 crore from Rs 29.04 crore in DQ 2001.

The continued slowdown in the capital goods sector took its toll on YBSL's top line. The company believes that the medium-term outlook for capital expenditure in the power, refining, metals, pulp and paper and pharma sectors, which looks promising, will enable it to garner adequate business to sustain its growth.