Silverline Technologies plunged today on unconfirmed media reports that the company is facing a cash crunch.
The stock declined by 19.89 per cent to Rs 21.95 on the BSE. More than 49.06 lakh shares changed hands on the counter. On the NSE, the volume was 100.53 lakh shares.
From its peak of Rs 80.35 on December 12, 2001, the stock, within 9 months, plummeted 72.2 per cent to the current Rs 22.30.
More From This Section
A dealer at a brokerage said, "The setback on the counter was due to reports that the company is undergoing a cash crunch, and it has not yet paid salaries to some of its employees in the US since the last couple of months."
Meanwhile, analysts feel the increase in receivables cycle amid the economic slowdown has reportedly affected the company's working-capital position.
Incidentally, four directors on the board of the company resigned recently. The managing director of Tata Infotech, Nirmal Jain, is set to take charge as chief executive officer of with effect from August 12, 2002.
For the fourth-quarter ended March 2002, Silverline reported a massive fall of 43 per cent in its net profit to Rs 13.15 crore compared with Rs 23.04 crore in the corresponding quarter of the previous year. Total income decreased by 33.2 per cent to Rs 44.83 crore (Rs 67.09 crore).
The board, at a meeting on April 30, 2002, decided to extend the accounting year from March 31, 2002, to June 30, 2002, to correctly reflect the financial position pursuant to operational and organisational restructuring undertaken by it, as well as due to the business combinations/acquisitions effected by the company.