The Hindu Business Line : LKP Merchant shines on turnaround performance

LKP Merchant Financing has of late been witnessing good trading volumes and price movement. The stock today closed at Rs 41.50, up 1.72 per cent, on the BSE. The counter recorded its 52-week high at Rs 45.55 on July 11.

According to analysts, the company's merchant banking business and its 100 per cent subsidiary, LKP Forex, have been showing steady growth.

"In view of the increasing number of mergers and acquisition activities as also the surge in equity placements and issues in the country, merchant banking business on the whole is in a buoyant state now. Because of increased business, LKP is on a turnaround path. It has also reduced its interest burden last fiscal substantially. Further reduction of this is also on the cards," Chief Investment Officer of a fund said.

Mr M.V. Doshi, Executive Chairman of the company, confirmed to Business Line that negotiations were on with a bank and an institution for one-time settlement of roughly Rs 70 crore debts it still has on its books. "We are hopeful of arriving at a solution in the next three months," he said.

Mr Doshi also said the company was open to the idea of parting with a strategic stake to a partner. According to market sources, a recent valuation study has indicated a total value of the forex business alone at around Rs 200 crore. The forex business has already set up 83 branches in 53 cities.

Considering the growth in outbound and inbound tourist traffic, LKP Forex is planning to open offices abroad to provide currency and travel insurance related services. "The forex subsidiary would set up two overseas offices this fiscal," Mr Doshi confirmed.

The initial plan suggests, according to market sources, four locations - Singapore, Dubai, the Philippines and Thailand.

From a net loss of Rs 13.10 lakh in 2003-04, LKP Merchant Financing has posted a net profit of Rs 3.88 crore in 2004-05. During this period, the interest cost came down sharply to Rs 13.60 lakh from Rs 77.60 lakh. It has free reserves of around Rs 45 crore. In the first quarter to June 30, 2005, it reported a net profit of Rs 78 lakh.

In 2004-05, LKP Forex and LKP Securities, the wholly-owned broking arm of LKP Merchant Finance, recorded net profits of Rs 2.5 crore and Rs 35 lakh respectively.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
LKP Merchant shines on turnaround performance

Volatile movement

BSE moves two more indexes to free-float

Infotrek Syscom up on new initiatives

Outlook may turn positive for Dr Reddy's, Hero Honda

Gems and jewellery sector favourite with FIIs: study

Benchmarks fall amid volatile trading