The company is in the midst of a battle to regain the possession of 40 per cent stake in SVCL which the erstwhile promoter BV Raju had transferred to nine `independent' investment companies.

Meanwhile, RCL has posted impressive results for the first quarter of the current fiscal. The company has posted a profit of Rs 6.24 crore in the first quarter of the current fiscal as against Rs 6.55 crore registered for fiscal 1996-97.

During the period under review, the turnover stood at Rs 94.54 crore and operating profit at Rs 12.53 crore. Interest burden was Rs 4.28 crore and depreciation provided Rs 2.01 crore.

The company has significantly improved its operational efficiency. The operating profit margin has improved from 8.42 per cent in the previous year to 13.25 per cent in the current period. Similarly, gross profit margin was higher at 8.73 per cent (3.76 per cent) and net profit margin was 6.60 per cent (1.50 per cent).

INSIGHT

Share price a poor indicator of performance

The first quarter performance seems to have outstripped all expectations; especially the bottomline growth. At a cursory glance the stock seems to be a market outperformer. But in reality the stupendous rise in the stock price is an outcome of the hostile takeover bid by India Cements. The stock cannot be taken as an indicator of its performance firstly for the above reason and secondly, due to the fact that it is absolutely illiquid. Trading in the stock averages a volume of just 200 shares or less per day. Trading is static and is peppered with gaps -- a poor indicator of market sentiment.