Fortis Financial Services

Previous week's close: Rs 28

The Fortis Financial Services (a Ranbaxy group company) scrip price crashed by 11 per cent last week. The fall seems to be a result of the dismal results for the eighteen months ended July 1995 to December 1996.

The results presented reflect the effects of the amalgamation of Empire Finance with the company. It has reported a total income of Rs 78.71 crore against last year's (from March 1994 to June 1995) turnover of Rs 10.39 which is strictly not comparable due to the amalgamation.

But, the net profit has nose-dived from Rs 4.94 crore last year to Rs 2.68 crore in the current results. The fall is even more dismaying considering that this includes both the companies' figures. Interest has eaten away a chunk of its earnings, shooting up from Rs 3.19 crore to 36.85 crore.

 

Depreciation has also risen considerably from 0.95 crore to Rs 22.75 crore, while total expenditure has gone up from Rs 1.89 crore to Rs 17.32 crore. The equity capital of the company has gone up from Rs 3 crore to Rs 4.86 crore as a result of the amalgamation. The severe conditions afflicting the financial services sector seem to have taken their toll on the finances of the company. And, the amalgamation seems to have made matters worse.