Reliance surprises with 56% jump in net profit
Cement unit sale propels Tata Steel net
Guj Ambuja profit surges in first half
Sensex slips 122 on badla jitters
Dishnet overseas float gets green signal
Foreign Exchange, Bullion, Stock Indices

Mumbai, Jan 20 
Reliance Industries (RIL) today beat market forecasts, unveiling a 56 per cent increase in its third-quarter net profit at Rs 627 crore (Rs 402 crore a year ago) in a sterling performance it attributed to buoyant volumes, robust prices, tight cost controls and sharp productivity gains. The profit surge came on the back of a 40 per cent growth in sales at Rs 5,034 crore ( Rs 3,573 crore).

Nine-month profits (April-December) were up 32 per cent at Rs 1,749 crore (Rs 1,323 crore) while sales in this period jumped 25 per cent to Rs 13,707 crore (Rs 10,947 crore). However, the profits shrink by 12 per cent to Rs 1,534 crore when measured in terms of the US GAAP accounting standards.

The surge in profits at India’s best-known conglomerate was fuelled by a 14.50 per cent increase in volumes and a 11 per cent rise in prices. Buoyed by the strong volume growth, it has raised its production target for this financial year to 8.5 million tonnes from 8 million tonnes fixed earlier.

Production in increased 21 per cent from 5.27 million tonnes to 6.39 million tonnes. Total exports, including those in the deemed category, jumped 48 per cent from Rs 512 crore to Rs 759 crore.

“We expect that gains from the Jamnagar complex, increased volumes of polypropylene/paraxylene, and greater integration to boost future performance. The continuous focus on productivity, efficiency and consolidation will also help generate higher growth momentum,” an upbeat Anil Ambani, company managing director, said here today after releasing the results.

“Reliance is delighted to be stepping into the new millennium after completing its integrated refinery, petrochemicals, power and port complex at Jamnagar at a cost of over Rs 25,000 crore,” Ambani said. The project, expected to achieve full capacity utilisation soon, will procure its entire range of raw materials and inputs, barring crude oil, from domestic sources.

Ambani said crude prices and the cost of feedstock were higher in the third quarter than they were earlier this year.

Capital expenditure in the nine months stood at Rs 1,800 crore, much of it going to finance the Jamnagar petrochemical complex. Consistent with the company’s policy, the foreign exchange borrowings remained completely hedged.

Ambani said his company has set an export target of Rs 2,000 crore to be achieved by 2001. If it is successful, Reliance will emerge as the country’s largest manufacturer-exporter. “Exports alone were more than adequate to cover the interest cost on foreign currency debt,” Ambani said with a sense of triumph.

He felt the share markets did not reflect the true worth of a company which has invested Rs 5,850 crore in the equity capital of Reliance Petroleum, Larsen & Toubro, BSES and Reliance Capital. These holdings are now valued at Rs Rs 20,000 crore. On the investments made in L&T and BSES, he said: “We look at them as strategic investments and we have held it for a long time.”

Asked about the shareholding pattern in Reliance, Ambani said, “Nothing has changed significantly in the shareholding pattern.” If the ‘hidden values’ of the company are taken into account, he said the share is worth Rs 700 in terms of what he called ‘street valuations’.

On acquisitions, Ambani said his group was looking at opportunities in the industry but had found nothing that could be reported. The company has firmed up its offer for IPCL and was awaiting the government’s response.

Ambani said his company had kept its foreign borrowings abroad for the purposes risk management, in a veiled reference to media reports that it was forced by the government to bring them into the country.

Asked about the company’s plans in the oil and gas sector after it bagged 12 blocks under the new exploration policy, Ambani said Reliance and its partner will invest $ 50 million over the next three to four years.

Ambani said his company had sought the government’s permission to set up its own marketing network for key oil products such as petrol and diesel. Though Reliance has forged a joint venture with Indian Oil, it is keen to have its own marketing infrastructure.    

Mumbai, Jan 20 
Tata Iron and Steel Company (Tisco) has reported a net profit of Rs 146.18 crore for the third quarter of 1999-2000 compared with Rs 16.21 crore in the corresponding period of the previous year. This massive 800 per cent jump in net profit was made possible by the one-off sale of Tisco’s cement division to French company Lafarge with the transaction getting treated as other income by the company.

Other income during the quarter shot up to Rs 125.90 crore compared with Rs 31.67 crore in the previous year, an increase of over 297 per cent.

The sale transaction of the cement division to Lafarge India was completed on October 31 with the net income from the deal getting included as other income in the third quarter. During the quarter, sales rose marginally to Rs 1698.94 crore from Rs 1595.98 crore in the previous year, an increase of six per cent.

In terms of volume, sales was higher at 7.79 lakh tonnes compared with 7.73 lakh tonnes in the previous year, though production fell from 8.07 lakh tonnes to 7.84 lakh tonnes.

There was wild fluctuation in the Tisco counter on the Bombay Stock Exchange (BSE) today with the scrip shooting to Rs 178.40, after opening at Rs 171, before closing at Rs 160.80 after hitting a low of Rs 159.90.

For the nine months ended December 31, Tisco’s net profits rose to Rs 236.36 crore compared with Rs 112.53 crore in the corresponding period of the previous year. Sales rose to Rs 4833.73 crore from Rs 4413.51 crore, while other income moved up from Rs 89.35 crore to Rs 164.37 crore.

During the third quarter, while operating profit was higher at Rs 271.49 crore against Rs 209.03 crore, the interest component accounted for Rs 81.67 crore (Rs 79.87 crore).

Gross profit was placed at Rs 315.72 crore (Rs 160.83 crore), and depreciation at Rs 108.25 crore (Rs 96 crore) and the profit before tax and employee separation compensation was at Rs 207.47 crore (Rs 64.83 crore).

With employee separation compensation accounting for Rs 42.29 crore (Rs 45.48 crore) and profit before tax at Rs 165.18 crore (Rs 19.35 crore) and provision for taxation at Rs 19 crore (Rs 3.14 crore), net profits stood higher at Rs 146.18 crore.    

Mumbai, Jan 20 
Gujarat Ambuja Cements (GACL) today reported a 90 per cent surge in its net profit for the second quarter ended December 31 at Rs 55 crore compared with Rs 29 crore in the corresponding period of the previous year.

GACL’s first-half numbers were even rosier with net profit soaring 126 per cent to Rs 104.69 crore as against Rs 46.36 crore in the same period of the previous year. “The performance was possible due to the continued focus on all-around cost optimisation efforts,” the company said.

The board of directors today declared an interim dividend of 25 per cent for the year on an enlarged capital of Rs 147.10 crore (post-bonus).

Second-quarter sales rose marginally to Rs 331 crore from Rs 312 crore a year ago. In this period, the company sold 1.47 million tonnes of cement (1.50 million tonnes last year) while production stood at 1.49 million tonnes (1.51 million tonnes).

The demand for cement, the company said, has remained strong so far in the current financial year. In the first nine months (April 99-December 99), it was growing at the rate of 18 per cent.

The surge in demand, which began early in the year, is being sustained.

This has led the company to expect an over 15 per cent growth for the entire financial year. “The demand seems to be finally keeping pace with supply, which augurs well for the cement industry,” the company said.    

Mumbai, Jan 20 
Renewed fears over high badla charges on the Calcutta Stock Exchange (CSE), rumours about fresh income-tax raids on brokers and reports that G-7 is concerned over the US ‘stock bubble’ sent the BSE sensex plunging 122.44 points to 5355.80 points even on a day when several companies beat market forecasts to announce robust earnings.

The 30-share index opened at 5508.04, touched an intra-day high of 5516.16 but slipped to 5355.80 at close in a 2.24 per cent loss over Wednesday’ finish of 5478.24.

Speculators reduced their exposures in index heavyweights in anticipation of high badla charges on the CSE. Later in the day, a CSE official said rates hovered around 22 per cent today — up from 16 per cent in the last settlement — largely because some brokers took long positions. The unofficial badla rates were higher however, between 24 per cent and 30 per cent.

Speculators and FIIs, who did strike small deals till the afternoon, suddenly turned panicky and sold heavily once reports of the G-7 worries over high stock prices in the US came in.

The selloff was intensified when word about fresh income-tax surveys on brokers swirled in the market.

This, coupled with high badla rates on the CSE, hit market confidence in a way that operators ignored the crop of good results from Reliance, Tisco and Gujarat Ambuja. Speculators are also believed to have sold heavily because Friday is the last day of BSE’s current settlement.    

New Delhi, Jan 20 
The government has approved foreign direct investments (FDI) worth Rs 1620.65 crore, including a Rs 1300 crore proposal of internet service provider (ISP) Dishnet DSL Ltd.

DSL will make an American Depository Receipt (ADR) or a Global Depository Receipt (GDR) issue of 44.125 per cent of its equity. This proposal has now been referred to the Cabinet Committee on Foreign Investment.

Among the proposals cleared by industry and commerce minister Murasoli Maran this week, is that of auto major Escorts Yamaha Motors to issue redeemable non-cumulative preference shares worth Rs 36.6 crore. The FIPB has also cleared MTV’s plans of a wholly-owned subsidiary to produce and buy television programmes in India.

The proposals approved by the government cover various sectors such as chemicals and pharmaceuticals, computer software, automobile components, telecom value-added services and food products.

In the electronic sector, Japan’s Sharp Corporation will bring Rs 6.66 crore, which is 74 per cent of the equity, to develop and produce electronic products.

Siel Ltd will invest Rs15.6 crore, which is 80 per cent of equity, to manufacture air conditioners and water coolers.

In food processing, Tetra Pak India will raise its equity from 74 per cent to 100 per cent through an investment of Rs 15 crore. The company will sell packaging machinery and packing material and manufacture aseptic processing plants for diary fruits and other food industries.

The proposal of Juices and Nectors Ltd to hike its stake to 91 per cent by investing Rs 43.68 crore in the tropical fruit pulps concentrates, fruit juices and nectors business was also cleared by the government.

Several proposals were cleared in the software sector as well, including Indus Software’s plans to bring Rs20.91 crore foreign equity, which is 60.3 per cent of its equity, for software development.

Among the other software proposals, KLG Systel Ltd was given the go ahead to increase its equity from 51 per cent to 100 per cent to develop engineering and plant design software business for which the company would invest Rs 24.33 crore.

Marubeni India Private Ltd’s proposal for taking up trading, promotion and supply of equipment to big industrial houses and supervision of installation of equipment in the country was also cleared.    

Foreign Exchange
US $1	Rs 43.57	HK $1	Rs. 5.55*
UK £1	Rs 71.68	SW Fr 1	Rs. 26.95*
Euro	Rs 43.44	Sing $1	Rs. 25.65*
Yen 100	Rs. 41.23	Aus $1	Rs. 28.55*
*SBI TC buying rates; others are forex market closing rates


Calcutta		Bombay
Gold Std (10gm)	Rs. 4610	Gold Std (10 gm)	Rs 4560
Gold 22 carat	Rs. 4355	Gold 22 carat	Rs 4220
Silver bar (Kg)	Rs. 7950	Silver (Kg)	Rs 8050
Silver portion	Rs. 8050	Silver portion	Rs 8055

Stock Indices

Sensex	5355.80	-122.44
BSE-100	2782.80	-27.83
S&P CNX Nifty	1601.10	-33.75
Calcutta	142.77	-3.44
Skindia GDR	1217.66	+7.64

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