Balkrishna Industries jumps after strong Q3 results

Balkrishna Industries surged 7.08% to Rs 325.10 at 10:16 IST on BSE after net profit jumped 66.4% to Rs 123.85 crore on 24.2% growth in net sales to Rs 867.32 crore in Q3 December 2013 over Q3 December 2012.

The Q3 result was announced after market hours on Thursday, 30 January 2014.

Meanwhile, the S&P BSE Sensex was up 64.71 points or 0.32% at 20,562.96.

On BSE, so far 18,000 shares were traded in the counter as against average daily volume of 18,710 shares in the past one quarter.

The stock hit a high of Rs 330 and a low of Rs 316 so far during the day. The stock had hit a record high of Rs 349 on 2 January 2014. The stock had hit a 52-week low of Rs 199 on 26 June 2013.

The stock had underperformed the market over the past one month till 30 January 2014, sliding 9.2% compared with the Sensex's 3.05% fall. The scrip had, however, outperformed the market in past one quarter, surging 7.91% as against Sensex's 2.55% fall.

The diversified company has equity capital of Rs 19.33 crore. Face value per share is Rs 2.

Balkrishna Industries' board of directors at a meeting held on Thursday, 30 January 2014, approved a scheme of arrangement for amalgamation of Balkrishna Paper Mills (a wholly owned subsidiary) with the company and demerger of the paper board business division, together with investment in Balkrishna Synthetics, on a going concern basis in to Nirvikara Paper Mill. Upon completion of the Scheme, Nirvikara Paper Mills will issue and allot one fully paid up equity share of Rs 10 each for every nine equity shares held in the company as on the record date to be fixed for this purpose after receipt of all approvals. Upon completion of the Scheme, all shareholders of the company shall become the shareholders of Nirvikara Paper Mills which is proposed to be listed on the Bombay Stock Exchange and the National Stock Exchange of India, Balkrishna Industries said.

The appointed date for the proposed amalgamation is 1 April 2013 and the demerger shall take effect from the date on which the orders of the Bombay High Court, sanctioning the scheme of arrangement is filed with the Registrar of Companies, Maharashtra, Balkrishna Industries said.

Balkrishna Industries said that the proposed scheme of arrangement will re-organize and segregate the paper board business division, together with investment in Balkrishna Synthetics as a separate listed entity resulting in a focused independent management, streamline the operations and provide access to varied sources of raising funds to achieve the growth potential of paper board business. The proposed scheme of arrangement will create enhanced value for shareholders and allow a focused growth strategy, which would be in the best interest of the company, its shareholders, creditors and all stakeholders, it added. The restructuring proposed by this scheme of arrangement will also provide an opportunity to the investors to select investments which best suit their investment strategies and risk profiles, the company said.

Balkrishna Industries is one of the leading manufacturers of off-highway tires.

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