Deepak Fertilisers reaps gains on buy-back plans

Capitalmarket.com - January 15, 2002

A mere announcement of share buy-back sent the Deepak Fertilisers stock soaring today.

The scrip surged to its maximum permissible level of 20% at Rs 19.20, but soon reacted from that level. At 12:22 IST, the scrip was quoted at Rs 17.55, still up by 9.69%. It clocked a substantial volume of 23,625 shares on BSE by afternoon trades.

Deepak Fertilisers has informed BSE that it has convened a board meeting on 21 January 2002 to consider a proposal for buy-back of its shares.

The company, which is also into industrial chemicals besides fertilisers, had posted a 11.4% rise in its first half September 2001 sales to Rs 282.74 crore. Its profit before tax had declined to Rs 27.50 crore from Rs 29.32 crore during the period under review.

The company's strategy of being in multi-product business, consisting of fertilisers and industrial chemicals, has helped it in off-setting the adverse impact of the fertiliser business by improved performance of the industrial chemicals division.

Deepak Fertilisers has expressed interest in acquiring a majority stake in Steel Authority of India' s (Sail) Rourkela fertiliser plant.

The company has a high equity base of Rs 88.63 crore and a buy-back could help in reducing the paid-up equity. The book value per share stood at Rs 44.20 as on 31 March 2001.

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