Since for the past three years, the company has been paying dividend at 40 per cent. If one buys the scrip at the current level, he will have to hold the stock for nearly three months which gives a quarterly yield of 6.15 per cent.

Although the company is currently passing through a rough patch, chances of a further depreciation in the stock appear to be bleak.

In 1997-98, cheap imports of petrochemical products into the country following steep devaluation of the South East Asian currency has resulted in the company's net profit crashing by 52 per cent to Rs 243 crore. This was despite exports touching an all-time high of Rs142 crore, up 33 per cent over the last year.

The negative growth in 1997-98 has already been discounted by the market. The scrip fell by Rs 4.6 on Wednesday after the announcement of results.

However on Thursday, the scrip maintained its previous levels. After touching its 52-week low of Rs 53, the scrip started its northward journey in mid-February and touched a high of Rs 84 on April 22.

With the government expected to either impose anti-dumping duties to protect the petrochemical sector or to provide some sops for the sector in the coming budget, there is scope for some appreciation in the stock. Moreover, with the conversion of the recently placed bond of IPCL by the year 1999, the government stake in IPCL will fall to 51 per cent. This could restrict further dilution and improve stock sentiment.

IPCL's performance for the fiscal 1998-99 is likely to be weak as there is not much growth in volume expected in the year and polymer prices are expected to remain in a narrow band. However, fiscal1999-2000 is likely to be better as IPCL's third cracker plant with a 3,00,000 tonne gas-based capacity goes on stream in late 1999 along with a 20,000 tonne HDPE unit.

PVC prices will remain firm due to shortages of chlorine which in turn will constrain PVC production in the Asian region.