The topline growth of 12.4 per cent to Rs 79.6 crore has failed to shore up the bottomline. Higher income from operations was aided by the newly acquired Sri Lankan business. Profit before amortisation of merger expenses and tax dipped by 12.3 per cent to Rs 21.6 crore. This was despite substantially higher other income of Rs 6.1 crore (Rs 3.8 crore). Failure to curb runaway expenses has been the reason for the sorry state of affairs.

Staff cost went up by 55 per cent to Rs 21.8 crore, advertising by 36 per cent to Rs 6.7 crore and other expenditure by 21 per cent to Rs 26.1 crore.As a result, operating profit slipped by 17 per cent to Rs 25.1 crore.

However, the company has expanded its leisure business and travel management services to reduce dependence on its core business. Both these businesses, put together, account for 33 per cent of the revenue from operations.

The company has started offering customers a comprehensive travel service via Internet.

The fact that Thomas Cook Group holds the world's biggest content network on travel and tourism has helped this endeavor. On the domestic front, TCI has been targeting the religious travel segment, which is estimated to be around 115 million tourists.

Also, a major thrust is planned towards targeting the railway traveller and a beginning has been made by opening up a kiosk at New Delhi railway station.

The company is quite upbeat about the changes in the infrastructure sector and is optimistic about doubling the bottomline every three to four years.

However, the government's tourism policy leaves much to be desired. Also, considering the fact that India is not a much favoured tourist destination, it seems unlikely that the tourist traffic will see a major turnaround in the near future.

Until that happens the major growth story for TCI has to wait.

Archies Greetings and Gifts
Ebbing demand for "mushy products or rather emotions" seems to have hit Archies Greetings and Gifts, really hard. The year 2000 was far from good for the company, which is the largest seller of greeting cards and gift items in the country. The third quarter historically is the most productive in terms of revenues as some of major festivals fall during this period.

However, the very fact that sales as well as the bottomline has dipped in the third successive quarter to December 2000 does not augur well for the company.

Net sales have dipped by 6 per cent to Rs 23.8 crore. This is despite the addition of 19 new franchises that has taken the total number to 487 including 22 company owned and managed franchises. Even `Archiesonline', the net venture has not been of much help.

The company has gone in for a major restructuring drive to arrest the decline in its fortunes. As a result, the expenditure has remained relatively flat at Rs 16.3 crore. But even this did not prevent the operating profit from falling by 17 per cent to Rs 7.5 crore. OPM has dipped to 31 per cent (36 per cent).

Interest costs stood at Rs 0.3 crore owing to the investments in the net venture. Depreciation charges remained flat. But for the fact that tax provisioning would be done at the year end, earnings would have been lower.

Net profit has plunged by 22 per cent to Rs 7 crore, as has net margin to 29 per cent (35.5 per cent).

Though Archies has been trying hard to alter the revenue mix in favour of Gift Items, it has met with limited success. At present, the card business accounts for about 70 per cent of the revenues. The share of gifts and stationary items is identical at about 15 per cent. Margin is quite high in the gift business as against the cards business.

Manish Joshi & Sachchidanand Shukla