MUKAND: FADING GLORY
Article Abstract:
Mukand had made a net profit of Rs9.08 crore in 1997-98. In 1998- 99, its net profit may be less than that. It had sold 5 lakh shares of Kalyani Mukand Ltd for Rs6.94 crore on March 31,1997. This contributed Rs6.44 crore to the net profit in 1997-98. It has changed its accounting practice which has contributed Rs3.96 crore to the net profit in 1997-98. It has sundry debts of Rs8.72 crore and loans and advances of Rs1.60 crore. It has given an interest-free loan of Rs7.50 crore to Bombay Forgings. The demand for its products has been hit due to the reduction in the production of heavy commercial vehicles. (rk) ------------------------------------------------------------ Financial results of Mukand (Rs in crore) ------------------------------------------------------------ Particulars Quarter ended June 30 Year ended 1998 1997 31/3/1998 ------------------------------------------------------------ Sales 163.36 189.61 898.57 ------------------------------------------------------------ Gross profit 16.97 10.85 94.78 ------------------------------------------------------------ Depreciation 4.43 4.28 17.12 ------------------------------------------------------------ Interest 15.73 13.24 66.30 ------------------------------------------------------------ Net profit -3.47 -6.93 9.08 ------------------------------------------------------------ Equity 28.15 28.15 28.15 ------------------------------------------------------------
Comment:
Posts net profit of Rs9.08 crore in 1997-98
Publication Name: Dalal Street Journal
Subject: Business, international
ISSN:
Year: 1998
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DOGGED BY DUMPING, DELAY AND DEBT
Article Abstract:
Essar Steel seems to be on the verge of disaster. For the first quarter of 1998-99, it posted a loss of over Rs35.7 crore. The reasons are many. The downturn in the global steel industry, sluggish international demand, overcapacity and dumping by Asian countries all have pushed the hot rolled coil prices down, from $350 a tonne to $220. Essar's operating cost of hot rolled coil is $295 per tonne against Tisco's $307. But Essar's huge interest and depreciation burden increases the total cost to $320, while Tisco's final cost stands at $315. The interest burden is due to huge debt of Rs4,400 crore. Ruias, the promoters of Essar, had diverted funds to Essar Power (Rs245 crore apart from Rs217 crore stake) and Essar Oil. This has not earned any profits to the company. Currently Essar is undergoing a restructuring plan. Financial institutions have agreed to grant loans worth Rs1,700 crore. Essar is trying to raise new debt for Essar Power. It is to hive off Rs350 crore Visakhapatnam pelletisation plant and gassification unit of steel plant into joint ventures. The company has shifted the workforce from Mumbai to skin-pass mill at Hazira, Gujarat, in an effort to bring coordination between the production and marketing and in turn bring down the cost of production. It is revamping its debt portfolio by paying off the short-term rupee loans and focus on long-term foreign exchange loans. The marketing team has been finetuned. They work in product groups instead of previously arranged regionwise organised groups. (um)
Publication Name: BusinessWorld
Subject: Business, international
ISSN:
Year: 1998
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