The second-quarter results of German Remedies are to be announced on Thursday, and there is likely to be a major surprise here. For the second half of the current year, German Remedies is supposed to report a revenue of Rs 95.25 crore and a profit after tax of Rs 14 crore. This compares very well with the figure of Rs 75 crore for the corresponding period the last year, a likely growth of 23 per cent. But the anticipated growth figures for the second quarter look particularly alluring when compared with the first quarter of the current year. For the firstquarter, the company reported a revenue of Rs 33.5 crore. So, the expectation for the second quarter is Rs 62.25 crore, a growth of nearly 100 per cent. The net profit for the first quarter was Rs 1.7 crore, but the figure for the second quarter is expected to be Rs 12 crore, an increase by 6.5 times.

At the time of the first-quarter results, the stock had reacted negatively as the net profit reported was way below market expectations.

There have been intermittent rumours of issue of bonus shares since the first half of the last financial year, but so far, the market has been disappointed. But an above-average performance in the current year is bound to rekindle hopes once more. The stock trades at a multiple of 22 times at Rs 570, but on its expected earnings per share for 1998-99, the price- earning multiple works out to just 14 times.

Sesa Goa

The reality of the steel industry finally seems to have caught up with Sesa Goa. For the first half, the company has reported a lower profit than whatit earned for the corresponding period the previous year. Revenues were lower by almost 20 per cent, and the profit after tax was lower by 15 per cent. The performance appears far worse on a quarter-to-quarter basis in the current year.

For the first quarter, the performance was surpising considering the state of the international steel industry to which the company caters. Against a net profit of Rs 27.65 crore reported for the entire 1997-98, it posted a net profit of Rs 10 crore for the first quarter. For the second quarter, however, it reported a loss of Rs 4 crore, which has not gone well with the stock market. The stock fell to a new low of Rs 120, following the announcement of the first-half results.

The company exports iron ore mainly to Japan. For the first half of the current calendar year, Japanese steel plants have reported a 10 per cent fall in production. Further cutbacks having taken place since then. A few days ago, Nippon Steel reported a 45 per cent cut in steel production.

TheEuropean market could have provided an alternative for Sesa Goa's exports, as its holding company, which was acquired by Mitsui of Japan, is an Italian-based steel conglomerate. Steel production in Europe was up by 7 per cent in the first half of the calendar year, and could have partly explained the offtake of ore from Sesa Goa in the first quarter, but since then production has been falling.

Corporation Bank

Despite the overall apathy towards bank stocks, there has been some positive activity in Corporation Bank. The quarterly results announced by the bank are very good, with a 25 per cent growth in net profit and a huge 65 per cent growth in credit offtake.

Despite this growth, there should be cause for optimism as there has been no worsening of NPAs, which have remained at 3 per cent. What is even better is that it has maintained its return on assets at 1.9 per cent. The stock was up by 6 per cent following the results, but could not hold on to the gains, and the price fell in line with thedecline in the market.