Southern Herbals
It is surprising to see the Southern Herbals stock quoted at a Rs 31.25 on the Bombay Stock Exchange as against an annualised earning per share of Rs 32.59 for the six months to March 1997. It is also amazing that a P/E of 0.96 times and a book value of Rs 68.35 does not attract the investors any more when compared to the fact that they were ready to buy the same share for over Rs 74 a year back. The reason for this could be an alarming rise in trade receivable and income tax demand of Rs 12.21 crore for the previous period. With exports proceeds of Rs 18.53 crore yet to be realised, trade receivable time shot up to 468 days in the year to June 1996 from 230 days in the year to June 1995. This dampened the sentiment with share price tumbling down to the current level of around Rs 30 from a 52-week high of Rs 74 on May 2, 1996. With cost of finance up by 51 per cent, gross margins took a beating at 67.6 per cent as against 73.8 per cent in the previous year.
Market price: Rs 31.25, EPS: Rs 32.59, P/E: 0.96
Compiled by BS Research Bureau