New Delhi, Nov 24: Markets have cheered the lifting of the lockout at BataIndia's Faridabad unit. The stock, which has been receiving a drubbing onthe bourses following the lockout at Bata's Faridabad unit and anot-so-impressive third quarter show, zoomed by 13 per cent in a singletrading session. From a low of Rs 135 on November 18, the share shot up toRs 152.6 on November 22.The counter saw hectic buying as nearly 4.37 lakh shares were traded onMonday against 63,409 shares in the previous trading day. The sentiment atthis counter also got a big lift due to the company's statement that theeight-month lockout may not affect the performance for the current fiscaland on the contrary, Bata may report a higher turnover. However, thanks to acorrection at this counter, the stock fell by 3 per cent to Rs 147.5. TheFaridabad unit, which was re-opened early this month, contributes a smallamount to Bata's total production.
Also, the unit produces lower-end products like Canvas shoes and Hawaichappals. Faridabad unit manufactures 1.25 crore pair of rubber and canvasfootwear per annum compared with Bata India's total production of 2.8 crorepairs of rubber and canvas footwear and 83 lakh pairs of leather footwear.
For the third quarter of fiscal 1999, Bata India has reported a 31 per centspurt in net profit to Rs 3.64 crore against Rs 2.76 crore in thecorresponding quarter of the previous year. The spurt in net profit wasdespite a drop in total income. Total income fell from Rs 171.51 crore to Rs164.26 crore during the third quarter. Total expenditure of the companydecreased to Rs 152.86 crore from the previous year's figure of Rs 162.19crore. Net sales stood at Rs 164.07 crore.
For the first six months of the current fiscal, profit before tax rose 10per cent to Rs 33.74 crore and turnover rose by 4 per cent to Rs 570.18crore. Operating profit rose 11 per cent to Rs 48.56 crore. For fiscal 1998,the company reported a growth of 50 per cent in net profit to Rs 24.25crore. Bata India seems to have started the promotion of the ladies footwearrange. According to analysts, the market will soon take note of thesedevelopments and shed its negative-bias towards the stock.
The stock looks poised for gains at current levels and fresh entry can beconsidered at current levels with a medium-term perspective, said analysts.However, the stock may not rise spectacularly in the short term mainlybecause of overall dull market conditions, they added.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.