Singal Swaroop Ispat

Singal Swaroop Ispat, a special alloy steel casting and re-rolled product manufacturer, witnessed a severe fall in its profitability for the six months ended December 1996. A 23 per cent rise in sales income failed to improve the operating profit margin which remained unchanged at 10 per cent. High interest burden of Rs 4.8 crore (Rs 2.6 crore) affected the profit margins. Gross profit fell by 16.5 per cent to Rs 3.3 crore (Rs 3.9 crore). As a result, gross profit margin fell substantially to 4.2 per cent (6.2 per cent). Net profit declined by 21 per cent to Rs 2.6 crore (Rs 3.2 crore) and net profit margin to 3.3 per cent (5.1 per cent). The recently announced slack season policy is likely to ease the liquidity crisis during the current fiscal. This may help reduce the interest cost. The company is focusing more on trading compared to manufacturing activities. Ship breaking activity is another segment where the company is concentrating its activity.

Mkt price : Rs 10, EPS :Rs 3.54, P/E : 2.82