NEW DELHI, May 28: Strict control of overheads and stabilisation of raw material prices in fiscal 1998 saw Pasupati Acrylon post a phenomenal 350 per cent jump in net profit to Rs 11.61 crore on a marginal 4 per cent growth in net sales. Interestingly, after incurring a loss for consecutive years till fiscal 1996, the company had turned around in 1997 with a net profit of Rs 2.59 crore. Given the huge equity base of Rs 63.5 crore, the current earnings per share works out to Rs 1.83.Pasupati Acrylon's scrip on the BSE is currently trading at Rs 6.05, up from its May 13 low of Rs 3.65. At the current price, the price/earnings multiple works out to just 3.3. However, given the huge equity, there hasn't been any significant change in trading volumes.
Pasupati Acrylon's fiscal 1998 net sales of Rs 190.37 crore was only Rs 7 crore higher than the previous year's figure of Rs 183.22 crore. However, overhead controls helped the company contain total expenditure at Rs 148.48 crore against Rs 149.76 crore.
Taxprovisions at Rs 8 lakh were slightly higher than the Rs 2 lakh paid last year and depreciation provisions were also marginally higher at Rs 10.07 crore from Rs 9.74 crore. Interest outgo at Rs 20.67 crore, however, was almost Rs 2 crore lower than the previous fiscal's Rs 22.39 crore. All these combined to earn Pasupati Acrylon a net profit of Rs 11.61 crore, a more than four-fold jump over the last year's Rs 2.59 crore.
Pasupati Acrylon, which has a technical as well as financial collaboration with Snia Bpd Spa of Italy (a Fiat group company), manufactures acrylic yarns and fibres at its Moradabad plant. Acrylinitrole, the main raw material for the manufacture of acrylic yarns and fibres is imported by the company.
Recently it has taken up an expansion project in its debottlenecking plant which will increase the capacity to 20,000 tpa from the existing 18,000 tpa, said a company official. Without any extra overhead costs, post-expansion, this will help the company enjoy economies of scale and boost thecompany's bottomline, he added.
After incurring losses for consecutive years the company had turned around only in fiscal 1997. In fiscal 1996, due to massive upswing in raw material prices (upto 50 per cent on year-to-year basis), the company had reported a net loss of Rs 16.67 crore from a total sales of Rs 162.55 crore. Till last year its accumulated losses stood at Rs 3.92 crore. During the current fiscal, the company expects to report better results as the raw material prices have stabilised in the international market and also the prices of acrylic fibre and yarns have gone up, said the official.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
