Dumping Hurts Hotline Glass

But large-scale dumping has taken a toll on the company's turnover and profitability.

The company has not been able to capitalise on its additional 1.7 million tubes capacity that started production in October 1996.

Thus, turnover for the first-half ended December 1996, which is at around Rs 30 crore, is slightly lower than the figure recorded in the previous corresponding period.

Dumping also resulted in a fall in the price realisation of the end-product.

This affected operating margins which declined from 44.07 per cent to 38.63 per cent during the period under consideration.

Net profit was also affected by a rise in interest cost by Rs 60 lakh to Rs 3.61 crore.

 

Overall, the net profit dropped by over Rs 3.3 crore to Rs 5.10 crore in the same period.

Considering its huge equity base of Rs 79.95 crore, it is no surprise that the Hotline scrip is languishing at Rs 6.

Last year, the company recorded a sales turnover of Rs 64 crore and a net profit of Rs 20.87 crore. This was despite losing two months' production due to the ongoing capacity expansion.

The company could have fared better in 1996-97 on an expanded capacity of 5 million tubes.

However, good fortune eluded it and if the current scenario continues, a slow down in demand for black & white televisions could further affect the company's performance.