Varinder Agro Chemicals

Adverse market conditions in the paper industry badly hit Varinder Agro Chemicals prospects during the six months ended December 1996. This affected the companys overall performance for the year ended December 1996. Sales income at Rs 100.56 crore declined by 6.3 per cent on annualised basis from Rs 80.49 crore for the nine months ended December 1995. Gross profit declined by 38.9 per cent to Rs 13.07 crore and net profit declined by 55 per cent to Rs 7.07 crore. The profit margins show a severe retreat. GPM declined to 13 per cent from 19.9 per cent in the previous year. NPM declined to 7 per cent from a healthy 14.6 per cent a year ago. During the six months to December 1996, sales declined by 5.2 per cent to Rs 49.75 crore. Gross profit declined by 56.6 per cent to Rs 4.38 crore, while net profit slumped 82 per cent to Rs 1.31 crore. GPM during the period declined to 8.8 per cent (19.2 per cent) and NPM to 2.6 per cent (13.9 per cent). The board has declared an equity dividend of 12 per cent for the year ended December 1996. The present price of Varinder Agro Chemicals scrip rules at Rs 7.75. At a dividend of Rs 1.20 per share, the dividend yield works out to 15.48 per cent.

Market price: Rs 7.75, EPS: 4.13, P/E: 1.88