MarketWatch - From The Insider
OCT 11 - OCT 16 1999 (ETig)
The insider
Telecom triumph
finolex.com
FINOLEX Cables will report more than 100 per cent growth in net profits for second quarter in the current fiscal. The Insider learns that bottomline for quarter ending September '99 is in excess of Rs 24 crore. This is against a net profit of Rs 11.54 crore recorded by it in corresponding quarter in the previous fiscal. Higher despatches in the current year on the back of higher telecom orders will ensure a higher growth. Interest expense would be considerably lower as DoT orders are on cash basis.
The domestic cable manufacturers remain protected against the increase in the copper prices, as per the tender conditions. On the contrary, they are able to earn a higher profit on the back of higher level of value addition.
The company is also expected to announce merger of its subsidiary, Finolex Telecommunications with itself in its board meeting scheduled towards the end of the month. The board is also expected to discuss an upward revision in price for its buy-back programme.
Working up lather
nirmaindia.com
nirmaindia.com
NIRMA Ltd is shortly commissioning a new facility for manufacturing soda ash, a key component for its detergent powder. The project is expected to lead to an improvement in operating margins by a whopping 15 per cent. The company already manufactures LAB, the other key ingredient in its product. Thus the future profitability of the company is expected to shoot from the present impressive levels. Nirma has emerged as a true FMCG company that can take on MNCs like Hindustan Lever. Earlier investments made in promoting the Nirma brand have started to yield dividends and the balance sheet is ready to wear a look. A well-known fund, know for its exploits in stocks like Archies, has been buying steadily into the stock.
The Insider also learns that the company is planning to reward its shareholders in the current year.
Backed by prices
Jindal Group
jindalsteel.org
Jindal Strips
jindalsteel.org
JINDAL Strips Ltd is expected to announce a 40 per cent growth in earnings for the second quarter in the current fiscal. The Insider learns that net profit profit for Q2 would be over Rs 15 crore. This would be achieved on the back of increase in stainless steel prices by Rs 1000 to Rs 6500 per tonne for various grades of stainless steel in the previous quarter following increase in international prices.
On an equity base of Rs 18.92 crore, it would imply earnings of Rs 32 per share. In view high depreciation charge, the cash earnings are more than Rs 80 per share. Against this, the scrip is quoted at just Rs 100. The company enjoys over a 33 per cent share in stainless steel market. The phase 1 of cold rolling expansion project is getting commissioned in the current fiscal, which would provide a further boost to the earnings.
Driving onto the growth track
INSILCO Ltd is expected to post a 100 per cent growth in bottomline for the first half ended September '99. The company which was recently taken over by Degussa of Germany will report a net of over Rs 3.5 crore, up from last year's H1 profit of nearly Rs 1.75 crore. And insiders say that this just the beginning. Insilco has also taken over the silica plant of MTZ Ltd and profits from it will accrue from the third quarter. So, full year bottomline will be even better.
Insilco now dominates the market with nearly 75 per cent marketshare giving it the pricing power that would improve margins in future.
Consolidating gains
MaxIndia Group
maxindia.com
MAX India will report a net profit of over Rs 11 crore for the second quarter ending September ?99. This would imply annualised earnings of Rs 44 per share. At current market price of Rs 212, earnings are discounted less than 5 times. This quarter?s profit would be sharp rise as the company has traditionally reported net profit of Rs 8-10 crore for the full fiscal. The previous year?s figures are not comparable as it included a hefty dividend from the subsidiary on account of sale.
Max India will be presenting consolidated accounts this quarter. Of the Rs 11 crore bottomline, Rs 5 crore would be attributed to Max India's conventional operations and Rs 6 crore to treasury income earned by its subsidiary. Max India is getting into insurance and is likely to announce a joint venture partner soon. This would result in a further boost to its valuations.
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