Sales and other income fell to Rs 280.6 crore during the period under review from Rs 380.4 crore due to the restructuring which involved sale of non-core businesses. Excluding consignment sales, sales and other income stood at Rs 217.8 crore (Rs 295.9 crore).

"In view of the substantial restructuring which resulted in the sale of white goods business and chemicals plant, the previous year's figures are not comparable," Voltas said in a statement.

The scrip closed at Rs 123 after opening at a higher level of Rs 127 on the Bombay Stock Exchange on Friday.

The company's gross profit (before interest and depreciation) was lower at Rs 10.6 crore, compared with Rs 12.1 crore in the second quarter last year. However, it recorded a cash profit of Rs 4.7 crore during the period, as against a cash loss of Rs 60 lakh inthe previous corresponding period.

Provision for depreciation was lower at Rs 3.6 crore from Rs 6.3 crore, while interest charges fell to Rs 5.9 crore from Rs 12.7 crore last year.

The company has written off deferred revenue expenditure aggregating Rs 80 lakh during the second quarter, which stood at Rs 20 lakh in the second quarter of 1998-99.

Voltas said that it is still in the process of upgrading its hardware to ensure Y2K compliance and the incremental cost for the purpose would not exceed Rs 0.5 crore.

INSIGHT

Trend likely to continue

The restructuring that Voltas has undertaken has begun to have its beneficial effect. The company had hived off its loss-making and underutilised divisions of white goods and chemicals. Despite the fall in turnover, the absence of these capacities has reduced overheads and pushed up operating margins. The proceeds from restructuring have been used to retire debt which has yielded a gross profit as against a loss in the corresponding period. Thepositive trend in earnings should continue into the other quarters.

-- Aaron Chaze