NEW DELHI, January 15: Bonus rumours propelled Castrol India's scrip on Thursday. The market is expecting a 3:5 bonus announcement from the lubricant giant. A few Mumbai-based brokers even expect a 1:1 capitalisation of reserves.In an otherwise nervous trading session - when the Sensex dropped by over 30 points, Castrol's scrip shot up by Rs 20 to Rs 697 on the BSE. On NSE too, the scrip shot up by over Rs 20 to touch a high of Rs 699 before closing the day at 697.25. The scrip generated huge volumes in the last trading hour on the NSE where more than four lakh shares were cornered in the last few minutes and the total volumes for the day shot up to 13.31 lakh shares against 6.4 lakh shares on Wednesday.
Bonus expectations have gathered momentum as the company is also expected to announce its full-year working results (year-ending December), which are expected to be attractive. Castrol's first-half performance was encouraging, with the turnover improving from Rs 423 crore to Rs 489 crore. Substantial
savings in interest costs and operational efficiency helped the company improve its bottomline substantially. Gross profit zoomed from Rs 74.55 crore to Rs 106.48 crore (up 43 per cent) and net shot up by 61 per cent from Rs 47.07 crore to Rs 75.76 crore. Castrol's volume growth of 12 per cent growth exceeded the average industry growth.
Castrol's last bonus was in 1995, when the company rewarded its shareholders with a bonus in the ratio of 3:5. Castrol has been very liberal in rewarding shareholders with bonus and Castrol's equity of Rs 61.75 crore has a high bonus content of over 82 per cent (i.e, more than 80 per cent of the equity has come by way of bonus). Castrol's four bonuses since 1990 have been in 1990 (3:5), 1992 (3:5), 1994 (1:1) and the latest in 1995 (3:5). Despite frequent bonus announcements, the company's equity stands at Rs 61.75 crore and huge reserves of over Rs 230 crore.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
