Dfhi Net Profit Slips 29% To Rs 31 Cr
In the current year, for the period ended August 30, 1996, the repo transactions for DFHI saw a decline, but outright transactions saw a massive jump. However, in its role as a primary dealer, DFHI has outdone the minimum stipulations of the Reserve Bank.
During fiscal 1995-96, the company's profit before depreciation and taxation stood lower at Rs 56.23 crore, as against Rs 82.26 crore in 1994-95.
The fall in profits is attributed to greater volatility in the call money rates and increase in the refinance rates charged by the Reserve Bank.
In 1995-96, the company's fortnightly weighted average call money lending rate rose from 8.68 per cent in 1994-95 to 16.99 per cent in 1995-96. Further, the RBI also raised the rate of interest on the refinance and repo facilities extended by then to DFHI in the latter half of the year.
These factors contributed to a significant rise in the cost of funding the stocks of treasury bills and government dates securities carried by DFHI for normal trading operations, said DFHI chairman P G Kakodkar.
Accordingly, the company has decided to recommend a dividend of 14 per cent (subject to tax) for the year ended March 31, 1996, as against a dividend of 15 per cent paid for the previous year. said Kakodkar at the eighth annual general meeting of the company.
The discount income of DFHI fell to Rs 70.71 crore in 1995-96, from Rs 132.03 crore in the previous year.
However, interest on call and other short-term lending increased to Rs 265.56 crore from Rs 142.24 crore, and after taking income from other sources, the total income rose marginally to Rs 418.98 crore from Rs 351.14 crore.
However, the expenditure jumped to Rs 362.97 crore from Rs 269.01 crore. The mainreason for the rise is the interest on call and notice borrowings and other short-term borrowings, which rose to Rs 330.03 crore from Rs 223.40 crore.
The aggregate turnover of the company in the primary and secondary markets in treasury bills segment during the year under review was lower at Rs 13,491 crore, as against Rs 35,125 crore achieved in the previous year.
This was mainly due to a sharp decline in tradable stocks of treasury bills during the year.
Likewise, the stock of 91-days treasury bills available for trading in the secondary market was also quite low as a major portion of these bills in the primary auctions was subscribed by non-competitive bidders and the RBI.