A press release from IPCL said that the company's performance has to be judged against the background of sluggish market prevailed during the third quarter. Despite the sluggish conditions, the operating margins for the quarter was at a healthy 24.61 per cent, the release added.

Operating profit during the quarter was at Rs 188.95 crore against Rs 183.90 crore. Other income for the third quarter was at Rs 25.48 crore as compared with Rs 15.61 crore. While total expenditure was at Rs 604.73 crore as compared with Rs 566.37 crore, interest stood at Rs 87.92 crore against Rs 78.55 crore. Depreciation for the period jumped to Rs 90.44 crore against Rs 68.41 crore, according to the release.

The combined production of all the three compelxes Vadodara, Nagothane and Dahej stood at 860,000 metric tones for the first nine months against 766,000 tonnes during the last year. The overall capacity utilsation at the operating planst reaxched 91 per cent as compared with 87 per cent in the same period last year.

Insight
valuation will be hit

Unlike Reliance, which has been able to take advantage of a hike in international prices of crude oil and downstream products, the same does not seem to be reflected in IPCL's results. The company has further been affected by a fire at the time of commissioning of the second phase of the Gandhar project. More important than the current performance of the company is the fact as to how it will affect its valuation for disinvestment.

Bidders for the government stake will surely take this poor performance of the company into account before setting a price. In any case the results are bad for the stock.

Shishir Asthana