Sail Faces Rough Weather

Price on 24/04/97: Rs 21

Price on 17/04/97: Rs 23

The Sail stock price was hit hard by the steel ministry's performance estimates for the company for 1996-97. The price declined by seven per cent over the previous week. The net profit is estimated to halve to Rs 653 crore though sales increased marginally by 2.5 per cent.

While higher input costs affected performance, a higher debt burden also added to the problems.

Sail, which was a zero tax company till 1995-96, has provided for Rs 97 crore as tax. While coking coal prices increased last year by 27 per cent, petroleum products and freight rates also increased substantially. The interest burden increased by about five per cent to Rs 1,250 crore.

 

Flat products, which form more than half of Sail's turnover, saw a weak trend in prices in the last one year. This year may be slightly better, as international HR prices are firming up and Sail has also raised prices. The company has projected a 13.3 per cent rise in net profit to Rs 740 crore for 1997-98.

Coats Viyella

Price on 24/04/97: Rs 68

Price on 17/04/97: Rs 63

This scrip gained 8.33 per cent over previous week's close. This was due to its recently declared results and the annou-ncement of its rights issue. Though its performance was dismal, the market was expecting worse. Even the 1:2 rights that the company is considering looks attractive at Rs 65.

Despite a sharp increase in other income, net profit declined at Coats Viyella. For the year ended December 1996, while sales rose by 8 per cent to Rs 951.7 crore, profit at the net level declined from Rs 9.53 crore to Rs 9.15 crore. Other income increased 54 per cent to Rs 17.02 crore.

The main reason for the poor performance has been the inequitable impact of excise duties on thread, apart from disruption of power supplies in the first half of the year which has affected production.

As a result, with a marginal jump in operating profit, margins at the operational level fell from 9.9 per cent to 8.5 per cent.

Reliance Industries

Price on 24/04/97: Rs 305

Price on 17/04/97: Rs 280

This scrip increased by 7.13 per cent during the previous week. This was mainly due to good results announced by the company. Reliance Industries recorded a sales growth of 12.1 per cent, from Rs 7,786 crore to Rs 8,730 crore for the year ended March 1997. Operating profit margins stood at 22.3 per cent -- close to the previous year's figure of 22.5 per cent.

While most analysts predicted a fall in net profits, the company reported a 1.4 per cent increase, to Rs 1,323 crore from Rs 1,305 crore in 1995-96. RIL for the first time paid tax of Rs 45 crore.

The traded value in this scrip on date of announcement of results touched all time high of Rs 1.56 crore.

Nicholas Piramal

Price on 24/04/97: Rs 161.50

Price on 17/04/97: Rs 150.75

High trading volumes in this scrip pushed the scrip's price by 7.13 per cent during the week. On April 25, a single deal of 4.37 lakh shares (2.5 per cent of the paid capital) worth Rs 7.15 crore was struck on the National Stock Exchange. The deal is reported to be negotiated deal between two parties, the identities of whom are not yet known.

Nicholas Piramal has been on a spate of mergers with its group companies Piramal Healthcare and Boehringer Mannheim being the latest, which is awaiting court approval.

CRB Capital Markets

Price on 24/04/97: Rs 8

Price on 17/04/97: Rs 10

The CRB Capital Markets share price retreated by 25 per cent over the previous week's close.

According to market sources, news reports that it had defaulted in repayment of dues worth Rs 65 crore to the State Bank of India following a run on its fixed deposit schemes.

The company was also earlier in the news when the Reserve Bank of India revoked its in-principle license given to start a commercial bank.

A Reserve Bank inspection had earlier unearthed irregularities in its operations and it had defaulted on inter-corporate deposits besides violating deposit ceilings, portfolio management schemes and deposit tenures.