Every additional rupee earned in net profit in the April-June 2003 quarter has translated on average into a Rs 34 rise in market capitalisation in the last four months.
A study of 62 companies with minimum net profit of Rs 50 lakh each at the end of the quarter shows an aggregate appreciation of over 125 per cent in their scrip prices between April and July 2003.
These 62 firms posted a 40.1 per cent growth in their aggregate net profit to Rs 90.92 crore in the quarter, against Rs 64.88 crore in the same quarter last year.
Their market capitalisation increased 125.4 per cent, from Rs 670 crore on March 30, 2003, to Rs 1,577 crore on July 31.
Of the 62 scrips, as many as 32 appreciated over 100 per cent during the period. Every Re 1 increment in their net profit for the quarter has translated into additional market capitalisation of between Rs 5 and Rs 201.
Another 12 stocks posted returns between 51 per cent and 100 per cent, while 18 gained between 18 per cent and 50 per cent.
Granules India benefited the most in the rally, with every additional rupee in net profit resulting in a rise of Rs 201 in the market value of the company.
It posted a net profit of Rs 1 crore in the first quarter, against Rs 83 lakh in the same quarter last year. The scrip price appreciated 151 per cent from Rs 28.95 to Rs 72.60.
What made the difference was a proposed dividend of 10 per cent and completion of its state-of-the-art granulation facility at Gagillapur, Hyderabad.
