Net sales has shown a slight improvement to Rs 898.56 crore from Rs 896 crore. Gross profit stood at Rs 28.47 crore, compared with Rs 36.36 crore. Total expenditure increased to Rs 803.78 crore from Rs 791.80 crores. Interest dropped to Rs 66.30 crore from Rs 67.83 crore.

Depreciation was at Rs 17.11 crore, versus Rs 17.92 crore. An amount of Rs 1.15 crore was accounted for taxation. The company's paid-up equity capital was at Rs 31.14 crore, against Rs 28.14 crore. The disposable surplus after adjusting early years and transfer from reserves was at Rs 44.64 crore, against Rs 32.89 crore. Reserves (excluding revaluation reserves) stood at Rs 356.60 crore, compared with Rs 347.35 crore.

Insight

After 1995-96, Mukand Ltd has seen astagnation in annual performance. Moreover, unlike other steel producers, whose margins have got strained by cheaper imports, the problem for Mukand seems to be internal competition from SAIL and other players.

The fall in stainless-steel prices by 5-10 per cent coupled with marginal decrease in alloy-steel prices have resulted in the fall in operating margins of the company from 11.7 per cent to 10.5 per cent.

The difference in Mukand's performance is the lowering of interest expenditure, when every other player has seen its interest cost rising due to higher working-capital requirement. Once we take out the effect of extraordinary items, the dip in bottomline by 35 per cent becomes far less.