Foseco India Impresses
Net profit has declined marginally by 1.3 per cent to Rs 7.50 crore, while sales have increased by 8.8 per cent to Rs 83.13 crore.
The lower growth is attributed to the slowdown in the user industries such as steel, aluminium and foundries.
However, operating profit margin of the company improved marginally from 16.95 per cent to 17.49 per cent.
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This was on account of the company's continued emphasis on research and development (R&D) to enhance productivity and constant upgradation of the existing products.
Fosecos overheads are also said to have come down due to last year's voluntary retirement scheme at its Chinchwad plant in Pune.
Other income has declined by 17.66 per cent to Rs 92.12 lakh.
However, interest burden rose by a whopping 185.74 per cent to Rs 80.98 lakh.
The companys depreciation increased by 70.12 per cent to Rs 1.72 crore.
This could be due to its on-going modernisation programme. Fosecos tax liability went up by 5 per cent to Rs 5.43 crore.
The companys performance is directly linked to the fortunes in the user industries which, in turn, are linked to the growth of the economy.
Since the user industries are expected to do well in the current year, Foseco may show an improved performance for 1997-98.
In the past few months, the scrip is moving in a narrow range.
The current price of Rs 311 gives a PE multiple of 22.