The stock movement reflects the market's optimism. The scrip started rising in mid-March from Rs 74 and within a month it peaked at Rs 131.10 before witnessing a correction. Thereafter, in anticipation of excellent results, the counter witnessed hectic activity and within three trading sessions the scrip touched a 52-week high of Rs 134. It continues to trade at these levels.

The Vijaypat Singhania group flagship has reported a 22 per cent increase in net sales from Rs 977.27 crore to Rs 1192.95 crore. The push in the sales has come from files and textile division. The gross sales of the textile division grew by35 per cent to Rs 821.9 crore. During 1996-97, the company's working was adversely affected due to a prolonged strike at its textile plant at Chhindwara. The company's performance has been hit by unremunerative prices for steel products and a slackening demand for cement which led to lower realisations. Although the cement division sold 19.32 lakh tonnes of cement, lower realisations led to only a 5.4 per cent increase in gross sales of the division.

Sales of Raymond's files and tools division, which exports bulk of its products, marginally increased by 2.2 per cent to 35.5 lakh dozens. However, better realisation and rupee depreciation led to 6.3 per cent jump in the sales income to 112.4 crore.

Raymond's other income has jumped 107 per cent to Rs 32.33 crore, mainly because the company has availed the export benefit for majority of its products in lieu of the duty free advance licenses under duty entitlement passbook scheme to the tune of Rs 16.87 crore against Rs 1.37 crore in the previous year. During1997-98, the company's exports grew by 41 per cent.

Until last year, the company had availed export benefits for its products in the form of duty free advance licences which were reflected by way of lower material cost.

A 107 per cent jump in the other income led to a 23.3 per cent increase in the total income to Rs 1225.28 crore. However, the cost cutting exercise and lower consumption of raw material, mainly cotton and wool, resulted in a lower than proportionate increase in the total expenditure. Expenditure increased by 18.6 per cent from Rs 833.11 crore to Rs 988.63 crore.Consequently operating profit improved by 48 per cent to Rs 236.65 crore. Operating profit margin improved from 16.39 to 19.8 per cent. Even if the other income is ignored, the OPM improved from 14.79 to 17.13 per cent. However, the interest burden has increased by 21.24 per cent to Rs 101.75 crore as against Rs 83.92 crore in the previous year. Despite this the gross profit increased by 76 per cent to Rs 134.9 crore. The grossprofit margin improved from 7.81 to 11.31 per cent. Depreciation rose 28.5 per cent to Rs 84.59 crore against Rs 65.78 crore the previous year. The company paid higher tax for the year 1997-98 of Rs 5.29 crore against Rs 1.18 crore paid in the previous year. Despite this the company's net profit jumped by 378 per cent from Rs 9.42 to Rs 45.02 crore. Earnings per share improved from Rs 1.69 to Rs 5.99. But the board has decided to retain earnings as the dividend paid to shareholders was increased only to 15 per cent against 10 per cent paid in previous year.

As part of restructuring exercise, the company has transferred its steel division to a separate joint venture with EBG Gesellschaft of the Thyssen group of Germany. The venture will be effective from July 1, 1998 with foreign partner holding 74 per cent stake while the remaining 26 per cent will be held by Raymond's.

The fixed assets of its steel division will be transferred to the joint venture at a price of $ 106.5 million. In addition to this thejoint venture will also pay in cash for the net current assets as valued on July 1, 1998. This will improve Raymond's cash flow substantially while the transfer of low margin steel business will not have much impact on bottomline of the company. For 1998-99 the company may not be able to report 300 per cent jump in the net profit but the profit margins are likely to be maintained.