NEW DELHI, June 29: Kesoram Industries' plans to seek shareholder approval to buy-back shares have propelled its scrip on the bourses. The stock hit the upper-end of the circuit-filter on BSE yesterday; it opened at Rs 19.90 (Friday's close Rs 18.45) and closed at close to its intra-day high Rs 20.3.The B K Birla group controlled company has an equity base of Rs 52 crore and the buyback will help the company enhance its earning per share especially at a time when profitability has been hit. In fiscal 1997-98, Kesoram Industries' net profit almost halved to Rs 18.42 crore as against Rs 39.96 crore last year. While the cement division was plagued by sluggish demand, the textile unit was affected by an increase in input cost. The hike in power tariffs also affected bottomlines. Setting up of two captive power plants will have a positive impact the company's bottomline in the fiscal.
The company expects a 7 per cent growth in its turnover in 1997-98. The company declared a lockout at its refractory unit inKulti, Burdwan, on March 29. The refractory unit contributes three per cent of the total turnover. The company suppliers refractories mainly to Hindalco, SAIL and Tisco.
The refractory unit has a capacity of 36,000 tonne per annum. In 1996-97, the company manufactured 20,000 tonnes of refractories. This year the production has been much lower compared with last year due to lack of orders, company sources said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
