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Alstom shares rose 4.6 per cent on Friday after Bouygues, the French conglomerate, said on Thursday it planned to increase its stake in the trains and turbines group.

“We will take advantage of the market to reinforce our position,” Olivier Poupart-Lafarge, the group’s deputy chief executive, said in a conference call for the mobile phone group’s quarterly figures.

He added that Bouygues would not seek to take control of Alstom and he brushed aside speculation it could sell its telecoms business to finance further acquisitions.

He was speaking after Bouygues reported first quarter operating profits up 8 per cent to €278m ($351m), in line with expectations, and raised its forecast for full year revenue growth from 5 per cent to 7 per cent to reflect a robust performance in its construction business.

However, Bouygues shares fell 6 per cent to €39.21 on disappointment at declining margins in the telecoms business, where Bouygues has adopted aggressive tactics to win customers, spending heavily on marketing new contracts for unlimited calls.

“The risk is that fundamentally their business is under pressure, with decreased margins for no upside,” one analyst said

The company agreed to buy the French government’s 21 per cent stake in Alstom for €2bn ($2.5bn) in April, saying synergies between the two businesses would help it enter new, high-growth markets.

News that Bouygues could raise its stake in Alstom as high as 30 per cent could be a further indication that the group is positioning itself to play a part in a new wave of nuclear development.

Bouygues approached the French government last year about taking a stake in Areva, the state-owned nuclear group, sparking speculation that it could sell the telecoms unit in order to buy Areva’s nuclear reactor business, Framatome.

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