Dagger-Forst Tools

Sales went up by 13.85 per cent to Rs 21.39 crore as compared to Rs 18.78 crore in previous year. However the growth was slightly lower compared to 40 per cent witnessed in 1995-96.

The rise in operating margins was hardly discernible at 21.92 per cent when compared to 20.63 per cent in the previous year.

Other income component has witnessed a robust growth at 31.85 per cent. to Rs 161.33 crore. Interest burden rose 53 per cent to Rs 1.16 crore from Rs 0.75 crore in previous year. This can be attributed to high cost of borrowings for working capital and capital expenditure purpose. Provision for taxation has been Rs 0.90 crore which includes dividend tax. Tax liability rose by 219 per cent as compared to previous year figure of Rs 0.26 crore.

 

The higher provisioning and interest cost affected net profit. Net profit rose by 16 per cent to Rs 2.84 crore. This is in pale shadow to a 220 per cent increase in net profit witnessed in 1995-96. The EPS on an expanded equity base fell to Rs 6.11 from Rs 8.15 during previous year. Dagger Forst had come out with a rights issue to part finance its expansion cum modernisation programme.

The 50 per cent expansion programme is in last stages of implementation. Major machinery have been received and project is slated for completion in September 1997. The full effect of increased production will be witnessed in 1998-99.

With the automobile segment expected to pick up, and its market share in broaching and gear cutting tools set to rise, better times are ahead for the company. The stock witnessed a decline from its peak of Rs 33 to its present level of Rs 24 . The present price discounts earnings roughly four times.