Sbch

Excluding Eno's contribution to SBCH's sales in 1996 would have improved the turnover growth for 1997 to 21.6 per cent. Yet, this would have been lesser than the 35.6 per cent growth achieved in 1996. SBCH, which soared on news of a possible merger of Glaxo Wellcome Plc-SmithKline Beecham Plc, reacted in the last three trading sessions from a high of Rs 400 to Rs 362.

Reports have emerged about the merger of the three SmithKline Beecham Plc companies in India before eventual consolidation with Glaxo India. Here, transfer of brands to SBAP -- a hundred per cent subsidiary - would improve SBAP's standing among the three. This, in turn, could enable the parent to consolidate its stake in the new entity with a better bargaining power. The parent has a 40 per cent stake in the other two companies. Other income continues to form a sizeable portion at 16.8 per cent of the profit before tax (16.2 per cent in 1996). This will be recurring in the form of compensation received for manufacturing the Eno brand for SBAP.

The operating profit margin at 15.3 per cent improved only marginally from last year's level of 15.2 per cent. In the last year, SBCH made a five per cent royalty payment on sales of products sold under the ' Horlicks' name. In 1996, this was reflected only in the last quarter.

Net profit growth at 32.1 per cent to Rs 62.02 crore has been aided by lower corporate tax as tax outflow in terms of PBT was down to 34.5 per cent.