Raymond net soars 79% to Rs 80.77 crore
Raymond Group (India) website.
raymondindia.com
raymondindia.com
Sabarinath M
MUMBAI, May 7: Raymond Ltd has registered a 79.4 per cent increase in net profit at Rs 80.77 crore during the year ended March 1999, up from Rs 45.03 crore in the previous year.
Reduction in operational costs, better cement prices in eastern markets and low raw material prices for textile products pushed up the net profit.
However, the total income rose only by 6.7 per cent to Rs 1,307.35 crore from Rs 1,225 crore in the last year.
The company has declared a dividend of Rs 2 per share for the year ended March 1999 against Rs 1.5 per share last year after setting aside an amount of Rs 25.05 crore towards debenture redemption reserve and Rs 42 crore for the general reserve. The profit before tax rose to Rs 96.76 crore from Rs 53.32 crore, an increase of 81.5 per cent, said a company release.
''Unlike last year, cement prices in the eastern market, especially in West Bengal where the company sells most of its products, were good. Operational costs were reduced substantially following cost-cuttingmeasures undertaken at all the divisions,'' said vice-president (finance) PK Bhandari while commenting on the results.
The cement division will improve performance as the positive measures announced in the budget for the housing sector will boost demand for cement products in the current year, added Bhandari.
The company's cement plant, with a capacity of 2.2 mmt, is located at Bilaspur in Madhya Pradesh.
The steel division continued to fare badly due to adverse market conditions resulting in pressure on prices and margins.
''Negotiations with German steel major Thyssen Krupp for a probable sale of the company's steel division are not there at the moment.
Thyssen continues to be our raw material supplier. What happens in the future cannot be said right now,'' said Bhandari.
Despite the general slowdown in the textile industry, the company has been able to maintain good volumes.
It has implemented the cost-cutting measures as recommended by Arthur Andersen. Raw material and overhead costs came downas a result of various measures, said Bhandari.
But the real benefits of the cost-cutting measures, which began with the textile division but later extended to all others, will be known only over a period of time, he added.
The company has convened the 74th annual general meeting of shareholders on July 2, 1999, at Zadagon in Ratnagiri district, Maharashtra.
Insight
A credible performance
In spite of the poor performance of the steel division Raymond has showed a creditable performance with a 79.4 per cent jump in its bottomline, though turnover growth was only 6.7 per cent.
However, the market expectation for the company's bottomline was around Rs 100 crore, this could affect the sentiment of the scrip which has shot up by 43 per cent from Rs 52 to Rs 74.5 in a week's time in anticipation of good results. Another factor that can affect the company's sentiment is the fact that at present there is no talks with Thyssen for sale of its steel division which is a drain on its profitability.
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