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| Sunday, 6 February 2005 |
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DIMO net profits soar 78% Diesel & Motor Engineering Co.Ltd; (DIMO) which recorded a net profit of Rs. 100m for the year ended 31st March last year with a record increase of 158% comparable to earlier year have performed well again for the second quarter ending September 30 with a net profit of Rs. 38m. This is in comparison to net profit Rs. 21m recorded for the 2nd quarter of previous year which is a commendable increase of 78%. The Group have recorded a net profit of Rs. 61m for the first half of year 2004/5 in comparison to Rs. 38m recorded for the previous corresponding period with an increase of 60%. The turnover for the 1st half is Rs. 3231m in comparison to Rs. 1941m recorded for the corresponding period with an increase of 66%. The annual earning per share had increased from 7.69 to 12.30 and presently trading at PE of 5.6 which is substantially cheaper to the present overall PE of 11. The book value has increased from Rs. 77.12m to Rs. 91.49m and the traded price again far cheaper to the book value. DIMO which commenced operations in 1939 have diversified into vehicles, vehicle parts and service, lighting and power tools, construction and material handling machinery, telecommunication and medical equipments, generating sets, turbines, ups equipments, diesel engines for marine propulsion, rail traction, power generation and tyres. The Group has business relationships with world renown companies such as Mercedez Benz, Robert Bosch AG, GMBH of Germany, BF Goodrich, Siemens, Komatsu, Tata of India, Michelin, M/s. Daimler Chrysler. As earlier expected prospects of a further hike in prices of petroleum products is unlikely due to the sharp appreciation of the rupee and downward trend in world prices and in fact, reduction in prices locally is a possibility. Coupled with reduced imported cost of vehicles due to the appreciation of rupee would create a bigger demand for vehicles. The massive construction boom expected and the need to replenish loss stock of vehicles due to the tsunami devastation the group is poised to substantially expand the business from near to mid term. Further the government is expected to utilise Indian line of credit to the full and the group would benefit much from import of buses, Heavy Vehicles from Tata Group, India. During the year 2003/04 the Group declared 2 dividends totalling 35% and 1 for 9 bonus and similarly the shareholders are expected to benefit immensely from the higher growth during the current financial year. |
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