Lml In Cruise Mode

The issue will enable it to smoothly implement its growth plans involving a mega expansion project which started in 1995-96.

The issue, according to company sources, is expected to be priced at Rs 66 per share and the paid-up capital will increase to Rs 47.1 crore. The funds were to be raised earlier through a rights issue which was shelved due to poor market conditions.

The foreign promoters had given an interest free Rs 17.66 crore loan to part finance the project. This will be now adjusted against their contribution to the issue. The Indian promoters will contribute the remaining part of the issue. The company's gearing position will improve with the debt to equity ratio expected to come down to less than 1.5 times against two times.

While other scooter manufacturers including Bajaj Auto showed a negative growth in the first five months of 1997-98, LML bucked the trend with a sales growth of 16 per cent.

It increased capacity in the last year from two lakh vehicles to four lakh units. This is further expected to touch six lakh vehicles by the end 1998.

For the six months ended March 31, sales had increased 25.6 per cent to Rs 363.94 crore while net profit climbed 112 per cent to Rs 17.20 crore. With costs under control, the company also managed to improve operating profit margin to 9.99 per cent against 6.33 per cent in the corresponding period of previous year.

Profits are expected to improve significantly in the second half. Analysts expect sales in the second half to be better and have revised the profit estimates from Rs 28 crore to Rs 37 crore. Since the present offer is around the current market price, the scrip may remain range-bound for sometime.