Mannesmann Rexroth

Mannesmann, which makes hydraulic equipment, suffered last year due to the industrial slowdown which affected capital goods manufacturers. This trend seems to have continued into the current year. As a result, the sales have shown a negative growth, declining by 6.6 per cent, to 18.14 crore.

However, the operating profit margin has shown considerable improvement from 3.73 per cent in 1996 to 16.38 per cent in the last fiscal. A large part of this is due to its focus on cost reduction and lowering imports.

Analysts say that the future depends on the completion of the export oriented unit which has not started production according to schedule due to the delay in arrival of imported equipment. The plant, which was supposed to start production in the third quarter of 1996, is expected to commence operations by the last quarter of 1997.

 

Mannesmann Rexroth scrip touched a low of Rs 42 when the company's results were announced. However, the sentiment on the stock has turned positive in the last two months with the scrip moving up to a high of Rs 80. This happened after news reports that the parent company, Mannesmann Rexroth Gmbh, is increasing its stake from 51 per cent to 74 per cent. With the company's performance also changing for the good, the stock should see renewed interest.