Consider this: While income from operations improved from Rs 200.47 crore in the first half (April-September 97) to Rs 321 crore in the second half (October-March), operating profit has increased from Rs 21.16 crore to Rs 43.35 crore.

Meanwhile, operating profit margins in the second half stood at 13.47 per cent compared to 10.55 per cent in the first half of the year, reflecting the improved quality of earnings.

Thanks to an impressive performance in the second half, the company has managed to record higher operating margins for the full year. Operating profit margins for the full year have improved from 11.33 per cent to 12.35 per cent. The company's focus on pollution equipment and exports apart from stringent cost control measures are responsiblefor improved operating profit margins. Exports during the year stood at Rs 95.83 crore, up by 17.7 per cent from Rs 81.40 crore in the previous year.

Lower interest burden which was down from Rs 8.66 crore to Rs 5.41 crore has also helped. The fall was mainly due to the fact that the company had reduced its debt exposure during 1996-97 to Rs 41.36 crore, down by 31 per cent from Rs 59.57 crore as on March 1996. Falling interest rates have also helped.

Strict control over cost, an expected revival in demand and improving situations in SE Asian economies -- a major export market for the company, augurs well for Thermax.

As far as the stock market is concerned, better than expected performance can go in a long way in helping the market sentiment and the stock might once again regain its past glory -- which seems to have received major setbacks after the death of Rohinton Aga. The slowdown in the capital goods sector which had a negative impact on the company's first half performance has further affectedthe sentiment. The stock which once attracted daily volumes of nearly 10 lakh shares in 1995, had been privy to very low daily average volumes of around 5,000 shares by the end of 1997.

The latest results are already having the desired impact on the stock price. Early signs are evident from improving volumes alongwith rising share price. While stock price moved up from Rs 148 in the mid-February to Rs 296 recently, volumes have touched a 2-year high of 5 lakh shares.

Wartsila NSD: Soaring up

The stock price of Wartsila NSD has been on a northward spiral for the last ten weeks. The rally started on February 20, 1998 -- the day when the company announced its results for December 1997. For the year ended December 1997, profit at the net level declined by 56 per cent to Rs 8.3 crore. However, net profit in the second half stood at Rs 5.7 crore, up by 119 per cent compared to the first half figure of Rs 2.6 crore.

Although historically the second half results have been good for Wartsila because oforder pile-ups which are executed in second half of the year, these results were much above market expectations. While performance has helped the stock price, a shift to the forward list of BSE has given a major boost to volumes. The shift has seen average daily volumes rising from 4,000 shares to 3 lakh shares. This has happened within a short-period of less than three months.

Another factor which has kept the stock price buoyant is an overreaction in the second half of 1997 when it fell below Rs 150. A large part of jump in price was just correction to this overreaction.

For the future, although the situation is yet to show any signs of a major improvement, the results are expected to comparatively better in the current year. The company has recently obtained two large orders through BHEL. The first order is for a 128 mw power plant for Kerala State Electricity Board, which should be commissioned by end 1999.

Deepak Singh Tanwar and Vikram Bhat