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Our Bureau

Kolkata, Sept. 26 Golden Tobacco Ltd stock was up 13 per cent in a week after it announced on Wednesday that the company will demerge its realty business into a separate entity and will issue one share of the new company for each share held in Golden Tobacco (erstwhile GTC Industries).

However, the stock on Friday fell 11.47 per cent to end at Rs 122.75 in line with the general market movement.

According to the management, the sales of the company were affected due to a steep increase in the excise duty in the recent Union Budget on non-filter cigarettes.

“The management is confident of gaining market share by developing/promoting various premium brands in the filter segment,” it added in the notes to the accounts.

The company had earlier decided to develop its property situated at Moral (Andheri) Mumbai. The June quarter profit and loss account had also booked a sum of Rs 2,477.73 being the difference in the cost and market value of the property as other income during the quarter.

The company had reported a sharp drop in sales in the quarter ended on June 31, 2008.

According to analysts, the market has been valuing the company after factoring in the realty business.

“But in this uncertain market, execution of the projects and earning an optimum market value from the realty business would be a difficult proposition. The change of manufacturing processes and marketing new filtered products could also be an uphill task for the company, which had largely been banking on non-filtered cigarettes,” said an analyst with an institutional brokerage firm.

More Stories on : Stocks | Restructuring | Real Estate & Construction | Cigarettes

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