New Delhi, Nov 7: The 20 per cent rise in Esab India' first-half net profit has failed to arrest the fall in its scrip price. The scrip, which was trading at around 134 in mid-October, has been falling continuously and is curently trading at Rs 108. The market, it seems, is not enthused by the fact the company has performed reasonably well despite the general economic slowdown.

For the six-months ended September 30, 1997, Esab India Limited has earned a net profit of Rs 4.87 crore on a turnover of Rs 79.17 crore. The rise in net profit from Rs 4.05 crore to Rs 4.87 crore is commendable considering the 12.7 per cent rise in total expenditure from Rs 62.1 crore to Rs 69.96 crore for the period under consideration.

On an equity base of Rs 15.39 crore, Esab India's annualised earnings per share (EPS) works out to Rs 6.33, up 20 per cent over the previous year's figure of Rs 5.26. The PE multiple stands at 17.06. What has helped Esab India bottomline is the fact the company has been able to contain its interest costs. From a high of Rs 1.85 crore last year, interest expenditure for the current period stood at Rs 91 lakh, a sharp decline of over 50 per cent. Although the company's depriciation provisions for the current fiscal are marginally higher at Rs 1.19 crore (Rs 1.04 crore last year), provision for taxation at Rs 2.62 crore is lower by 12.7 per cent.

The company is engaged in the manufacture of welding and cutting equipment, accessories and systems, flux - cored / tubular welding wires, submerged arc welding fluxes etc. The company was born when Esab Sweden bought over the welding division from Philips India. It subsequently took over the welding division of Indian Oxygen Ltd and Maharashtra Weldaids. This company is a 38 per cent subsidiary of the Charter group, UK.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.