MUMBAI, June 27: Jindal Iron & Steel Co (Jisco) has reported a net profit of Rs 50.03 crore for the year ended March 1997, down by five per cent over the previous year's figure of Rs 52.90 crore. Net sales were up to Rs 796.62 crore from Rs 738.80 crore. Dividend has been maintained at Rs 3.50 per share.

The board of directors also made a decision to earmark Rs 25 crore for buying back shares when the government gives the formal go-ahead. The book value of the Jisco share is Rs 110 and the scrip is being traded at Rs 45 on the Bombay Stock Exchange. The promoters hold 50 per cent in the company.

The gross profit before interest, depreciation and taxation was up by 23 per cent to Rs 105.05 crore. Interest outgo was much higher at Rs 23.39 crore compared to Rs 3.90 crore. The company's provision for taxation (minimum alternate tax) was Rs 7.85 crore which was one of the major causes for the lower net profit.

Jisco, the largest producer of galvanised products with 400,000 tonnes, plans to increase its market share to 20 per cent in 1997-98 from the present 15 per cent. Officials said exports would continue to be a major focus and the company was planning to boost it by 50 per cent. Exports during 1996-97 was Rs 99.83 crore.

According to analysts, though Jisco has recorded a lower net profit figure, it has improved at an operational level. On a year to year basis, the company improved its operating margins from 9.43 per cent to 10.35 per cent. Upgradation of the plant has been one of the main reasons for this.

Improvement in the operating level has, however, been negated by a substantial increase in interest cost from Rs 3.90 crore to Rs 23.39 crore, they add. The company plans to focus on value-added products which is likely to further improve its margins in the long run. In the years to come, Jisco will also benefit from its expanded capacities, analyst say.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.