Adverse Market Condition Hits Growth
The adverse conditions that prevailed in the money markets during the second half of 1995-96 and the first half of 1996-97 affected the growth of the capital goods industry. DGP Windsor, a Dilip Piramal company that manufactures plastic processing machinery, suffered a severe setback in its working results during the six months ended December 1996. Sales declined during the period by 6 per cent to Rs 60.74 crore. Gross margins were under pressure largely due to a sharp increase in the cost of borrowings. Net interest increased sharply by 133.6 per cent to Rs 6.05 crore. The GPM declined to 4.3 per cent from a healthy 10 per cent in the previous year. This affected the gross profit of the company which declined by 60.6 per cent to Rs 2.63 crore. Net profit of Rs 0.61 crore ( Rs 4.92 crore) gives an annualised EPS of Rs 0.93. The financial performance for the six months to December 1996 is fully reflected in the market price of the company which is reporting 52-weeks low almost every day.
Market price: Rs 68, EPS: Rs 0.93, P/E: 73.11