Indian Rayon, the AV Birla group company, has posted a 12.18 per cent increase in sales to Rs 1,584.73 crore. However, net profit of the company declined marginally to Rs 213 crore against Rs 215 crore in 1996-97.
The reason for lower profitability is the poor performance from its cement and carbon black divisions.
As a result, the operating margins of the company has declined to 22.11 per cent against 24.08 per cent in the previous year.
The company has declared a 50 per cent dividend on the expanded equity owing to the issue of 1:2 bonus in the previous year.
The company's cement divisions were the main under performers with very low sales growth as well as sharp decline in realisations.
The realisations in the white cement division have declined by 11 per cent to Rs 5,970 per tonne. However, the main saving grace for the company was a healthy performance from the viscose filament yarn division which showed a sales growth of around 4.6 per cent with realisations also showing a slight improvement against the previous year.
However, the companys bottomline was partly cushioned by a lower interest and tax burden.
Interest charges declined by 9.31 per cent to Rs 108.78 crore, while tax liability declined by 43.9 per cent to Rs 19.18 crore. Tax was provided at a rate of 4.7 per cent as against 8.7 per cent in the previous year.
Depreciation increased by 24.81 per cent to Rs 87.22 crore due to the commissioning of new plants and few capacity additions in other divisions. The company commissioned its sea water magnesia plant at Vishakapatnam with an installed capacity of 50,000 tonne per annum in February 1998.
