The Bhartias of VAM Organics are shedding their 34 per cent stake in Insilco in favour of Degussa, the other co-promoter. The fact that the equity transfer by Bhartias to Degussa will make the company a 68 per cent subsidiary of Degussa AG is also driving the stock northward. Degussa is the largest producer of silica in the world. Degussa is acquiring the 34 per cent stake at an aggregate cost of around Rs 34 crore, which will be paid directly to the Bhartias.

Insilco's net profit for the nine monthe ended ended December 1998 at Rs 2.9 croreshot past the full year profit of Rs 1.16 crore reported in 1997-98. Saving in interest and depreciation cost has helped improve its margins. Although there is not much growth in turnover, the operating as well as net profit margins have seen a quantum jump. Turnover for the nine month period was Rs 34.14 crore against Rs 42.76 crore for 1997-98. For the quarter ended December 1998, turnover (net of excise) stood at Rs 12 crore with an operating profit of Rs 4 crore. After an interest and depreciation cost of Rs 0.88 crore and 1.55 crore, net profit for the third quarter stood at Rs 1.53 crore against the first half net of Rs 1.37 crore.

Although the company has put up a strong financial performance, an accumulated loss of Rs 3.21 crore is still a drag on the company.The takeover by Degussa by April this year would certainly help remove this stain as well. The company's 15,000 tonnes per annum plant has been running at an optimum capacity for the past three years and more than 40 per cent of its turnover isthrough exports.