Raymond reported a poor perfomance for the year ended March 2000 with the net profit crashing by more than 60% in the current year. This was partially, the result of the loss booked on the divestment of Raymond Synthetics which was sold to Reliance Industries.
In last year annual report, the management had claimed that the dimunition in the value of investments in Raymond Synthetics were not provided for since the losses were only on account of depressed market conditions which were expected to improve. Even in the current year, the company has not provided for losses of Raymond Calitri Denim even though its has wiped out is net worth of Rs 500 m.
The company's topline has improved only by 3.4% partially because of a slowdown in worsted shirting volumes due to a shift in the consumption pattern in favour of readymade garments .Textiles contribute 57% to the turnover of the company. Besides, the company has not been able to improve cement realisations since its plant is situated in a cement surplus region. (Cement contributes around 23% to the company's turnover.) As far as the company's steel division is concerned, the management has expressed its intention to hive off the division but has not succeeded in its endeavour.
The stock quotes at Rs 63 which discounts the EPS of Rs 4.22 by 14.9 times which is still at the higher end of the price band at which the company has traded at in the past
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