Sales and profit growth at Indian Rayon & Industries have come down from over 30 per cent in 1995-96 to less than 20 per cent in 1996-97. The company has, however, managed to post a higher profit of Rs 214.77 crore on net sales of Rs 1,412 crore during the year.
It has upped dividend from Rs 6.25 per share to Rs 6.75 per share and with equity remaining stable at Rs 44.4 crore, the earnings per share (EPS) has risen smartly by 16 per cent at Rs 47.74 per share.
Announcing the results yesterday in Mumbai, the Aditya Birla group major said it will issue bonus shares and it has called a separate board meeting on May 6 for this purpose.
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A 24 per cent jump in grey cement production and higher carbon black and white cement output, together, have helped net turnover to touch Rs 1,412 crore posting a 17 per cent jump. In 1995-96, the turnover growth at Indian Rayon was over 30 per cent more than the previous year.
The company was also helped by higher grey cement prices in the South, where its plants are located. The company recently increased cement capacity from 1.8 lakh tonnes to three lakh tonnes by setting up a separate grinding unit. In white cement, it more than doubled the capacity from 1.58 lakh tonnes to 3.6 lakh tonnes. The full benefit of these expansions, however, will be felt only in 1997-98.
Profit growth at 16 per cent, much lower than the 39 per cent growth in the first half of 1995-96, was mainly because of better price realisations in grey cement and a healthy growth in other income. Other income more than doubled from Rs 32.58 crore in first half of 1996-97 to Rs 66.75 crore in second half.
During the year, while expenditure growth reined in at 16 per cent, operating margins dropped marginally from 32 per cent to 31 per cent. Depreciation and interest costs, however, increased slightly. In 1996-97, the company commissioned projects worth Rs 692 crore including a 33,000-tonne caustic soda plant and a 16.5mw cogeneration power plant at Veraval, Gujarat and a 2.10-lakh-tonne white cement plant at Kharia. Besides, it added 17,520 spindles in worsted, synthetic and flax spinning at its Rishra facility at a cost of Rs 288 crore.
The company has lined up investments to the tune of Rs 320 crore for capacity expansions, which includes a 35,000-tonne carbon black plant in Chennai.
The commissioning of this plant is expected to take up its total carbo black capacity to 95,000 tonnes.