Great Eastern Shipping Company has posted a stunning 187% rise in net profit for the first quarter ended FY01. The operating margins was also up sharply from 32% to 42%.
Compared to the corresponding period in the previous year, the income from shipping division is up from Rs 623 m to Rs 1,030 m whereas the income from other divisions (that include treasury, property etc) are down by 94%. The operating profit from the offshore division, where the group has been showing keen interest over the last couple of years has shot up by 73% from Rs 137 m in 1QFY00 to Rs 238 m in 1QFY01. The extraordinary income include the sale of two bulk carriers.
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Thanks to the recovery in the South East Asian Economy, which accounts for more than 60% of the sea borne trade, the traffic is increasing on all routes. Moreover, Baltic Index, the indicator of the freight rates in the dry bulk segment, is currently around 1,620 level (last year it touched a low of 800 at one point of time). This coupled with the company's interest in the offshore vessels segment the year ahead does seem to be bright.
The stock is currently trading at Rs 17.1 at a P/E multiple of 3.9 on FY00 earnings
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