It seems the bourses had some indications of the Paper Products' results as the scrip shed Rs 23 on the BSE from Rs 84 to Rs 61 (between April 15-30). However, since then, the scrip has been on an uptrend and is currently trading around Rs 67.

The fiscal 1998 saw the packaging industry's raw material costs dropping substantially. However, the company had to pass on the benefits to its customers due to stiff competition in the industry. Also, a price cut on its products coupled with a sharp rise in depreciation charges took toll of Paper Products.

During the fiscal 1998, Paper Products reported a 12.5 per cent rise in net income to Rs 169 crore from the previous year's Rs 150.13 crore. However, its total expenditure during the fiscal surged by 14 per cent - going up from Rs122.45 crore to Rs 141.80 crore.

Although the company made a Rs 2.24 crore savings under taxation provisions, paying Rs 73 lakh as against last fiscal's Rs 2.97 crore, Paper Product's depreciation provisions and interest outgo were higher by Rs 3 crore and Rs 1.29 crore, respectively.

For fiscal 1998, at Rs 9.65 crore, Paper Products' depreciation provisions were 45 per cent higher than the previous fiscal's figure of Rs 6.65 crore. Interest outgo at Rs 10.60 crore was up 14 per cent against Rs 9.31 crore last year.

To part finance an expansion programme into flexible packaging unit, the company had come out with a rights issue of partly convertible debentures in 1995. During the last year, the company had successfully completed its expansion programme on schedule. Owing to this, its depreciation provisions went up substantially and affected its profitability.