Apr 23, 2001|
Indo Gulf : Copper prices to the rescue
Indo Gulf Corporation declared results as per market expectations. While the company recorded a growth of 6.2% in net sales, it was mainly on account of higher sales realisation in its copper division. Infact fertiliser sales showed a negative growth of almost 37%. An interim upward reassessment of the urea capacity and the consequent reduction in retention price by the government coupled with a restriction on production at 100% level of reassessed capacity adversely affected the profitability of the fertiliser business. However, the copper division more than compensated for it.
|Operating Profit (EBDIT)
|Operating Profit Margin (%)
|Profit before Tax
|Profit after Tax/(Loss)
|Net profit margin (%)
|No. of Shares (eoy) (m)
|Diluted Earnings per share
|P/E (at current price)
Another significant development was that the company pre-paid its debt of Rs 1,407 m during the year which is expected to reduce the interest burden considerably in the coming year. Further, the company also fully pre-redeemed its 10.75% Cumulative Redeemable Non-Convertible Preference Shares of Rs 1,000 m.
The results of Indo-Gulf reflect the firm trend of copper prices witnessed in the last financial year. Average copper prices have remained in the range of US$ 1,600-1,650 after touching a high of US$ 2,000 per tonne in October'2000.
At the current market price of Rs 37, the scrip is trading at a P/E of 3.3 times its FY01 earnings. Its looks attractive given the government's initiatives to revive the fertiliser demand.
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