According to market sources, the company is likely to announce the sale of its steel division soon. The company's stock has been riding high on turnaround hopes and the proposed sale of its steel division, which would help the company get rid of the loss-making division and concentrate on its core business.

The company's stock has almost doubled in the past two months from Rs 45 to the current level of Rs 90, with daily average trading volumes surging to over 10 lakh shares on the Bombay Stock Exchange.

The sale forms part of the overall restructuring exercise undertaken by the company a few months back. According to the market sources, apart from the sale of its steel division, the company is also likely to put on block its Chhindwara textile plant in Madhya Pradesh which has been a drag on thecompany's bottomline.

The steel division, with an installed capacity of 45,000 silicon steel and one lakh tonne of cold rolled cold annealed steel has been incurring losses in the past. The division recorded a turnover of over Rs 100 in the first half ended September 1998. The steel division was set up at a total cost of Rs 450 crore and the first phase was commissioned during 1995 with technical support from Allegheny Ludlum of the US. The margins and capacity utilisation of the steel division in the recent past has been low at around 65 per cent. The margins came under pressure as the electrical industry, the main user sector, was reeling under slowdown. Higher interest cost on account of steel project took a toll on the company's bottomline.

The company had earlier said that it proposes to shrink the horizontal spread of its businesses and concentrate on core businesses of textiles and steel files as the conditions have changed after the commissioning of its steel division.

Raymond performedexceedingly well in the July-September 1998 quarter with net profit amounting to Rs 48 crore against a loss of Rs 12.77 crore in the previous quarter. The company earned a net profit of Rs 26.84 crore for the second quarter of last year and Rs 45.02 crore in 1997-98.