In tandem with the general depressed trend in the paper industry, the company's performance has been no exception. Earnings from business operations for Ballarpur have actually dropped and operating profit (excluding other income) dropped from Rs 69.64 crore to Rs 56.57 crore and gross profit from Rs 16.75 crore to Rs 10.52 crore. However, the current year figures do not include the operating results from the chemicals division. Margins have been under severe pressure and operating profit margin (OPM)excluding other income improved marginally and and gross profit margin (GPM) dropped from 2.47 per cent to 1.98 per cent.

In the past also, other income has been a major contributor to the company's bottomline. For the year ended March 1997, other income of Rs 43.96 crore was more than the company's net profit of Rs 38 crore. The net profit for three months ended September 1998 at Rs 7.83 crore were also aided by the other income component of Rs 7.57 crore. Ballarpur has huge investments which stood at over Rs 350 crore as on March 1997. Ballarpur's turnover for the first six months dropped from Rs 677 crore to Rs 529.79 crore as a result of hiving off of the chemicals division into a seperate company. Last year's figures included the sales of its chemicals division.

Ballarpur Industries reported net sales of Rs 277 crore and a net profit of Rs 7.65 crore for the three months ended June 30, 1998.

The company has been granted approval for the extension of its financial year 1997-98 to cover a period of18 months from April 1, 1997 to September 30, 1998.

During the quarter ended June 30, 1998, the company issued one crore equity shares of Rs 10 each at a premium of Rs 80 per share and 39,63,500, 11 per cent redeemable preference shares of Rs 100 each on private placement basis. Simultaneously, it redeemed 2,50,000, 15 per cent redeemable cumulative preference shares of Rs 100 each carrying 10 warrants entitling the holders to apply for three ordinary shares of Rs 10 each for cash at a premium of Rs 140. The company has also redeemed and paid off the holders of 4 per cent foreign currency convertible bonds (due in 1999) which helped the company reduce its interest outgo from Rs 48.27 crore to Rs 41.09 crore for the six months ended September 1998.

The company's stock hardly reacted to the 100 per cent improvement in net profit and moved up from Rs 21 to Rs 22 on the day of the result announcement.