Amal Products

Check on declining profit lifelne

Last year the company focused on the production of speciality intermediates with a better margin. It has repeated the performance during the year ended March, 1997. Better operational efficiency helped it to restrict the fall in both the gross and net margin level. A decline in raw material prices helped the company's gross profit. But its focus on dye intermediates failed to garner enough sales volume, which resulted in a fall in total turnover to Rs 31.1 crore (Rs 34.1crore), a drop of 8.8 per cent over the previous year. The low interest out go lifted gross profit to Rs 2.8 crore (Rs 2.6 crore), up 8.4 per cent. Gross profit margin was higher at 9.2 per cent (7.7 per cent). Net profit fell by 5.8 per cent to Rs 1.9 crore (Rs 2.1 crore). Despite this, the net profit margin rose marginally to 6.2 per cent (6.0 per cent). The company plans to set up a world-scale dye intermediates manufacturing plant which is expected to begin commercial production in May, 1997. The company plans to finance the plant through

internal accruals, borrowings and other sources. Hence, it is not going ahead with the right issue announced earlier.

Mkt price : Rs 7.75, EPS :Rs 2.76, P/E : 2.81