Saraswati Industrial Syndicate

The present sugar season, from October 1996 to September 1997, has sent out ominous signs for Saraswati Industrial Syndicate - a Haryana-based company having interests in sugar, engineering and steel. With a heavy pile up of sugar stocks, sufficient at least for seven months consumption, the companys working during the present year has been under great pressure. The pile up of sugar stocks has increased the storage and interest costs of the company. The rise of interest burden by 142 per cent to Rs 9.6 crore during the year ended September 1996 is likely to increase in the current year. During the year, the company availed cash credit of Rs 57.64 crore of which Rs 18.88 crore was taken as working capital demand loan. In the year to September 1996, though the companys sales turnover increased by 21.6 per cent to Rs 316.46 crore, it could not maintain profitability due to higher cost of production. The average price realisation of sugar increased marginally by 7.8 per cent to Rs 1,205 per quintal from Rs 1,118 per quintal in the previous year. The sugar cane cost also increased by 5.6 per cent to Rs 74.51 per quintal from Rs 70.85 per quintal. Other income of Rs 14.7 crore, as against Rs 10.8 crore earlier helped the company to restrict the decline in gross and net profit. Gross profit declined by 5 per cent to Rs 21.26 crore, while net profit dipped by 12.4 per cent to Rs 17.03 crore.

Market price Rs 79.50, EPS: Rs 25.53, P/E: 3.12