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Electrosteel Castings Ltd reported a loss of Rs 10.78 crore during the quarter to December 31, against a profit of Rs 47.45 crore in the corresponding quarter of the previous financial year. Sequentially too, its bottom line slipped; during the quarter to September 30, it had reported a profit of Rs 19.36 crore.
According to Mr Rajesh Agarwal, Head of Research at Eastern Financiers, Electrosteel Castings results have been almost in line with apprehensions; considering the demand environment faced by the pipe maker it was not surprising.
“The area of concern, however, is the huge liability towards foreign exchange losses amounting to Rs 129.23 crore on MTM basis.”
The Mark-to-Market (MTM) losses on forward contract as on December 31, 2011, stood at Rs123.57 crore. MTM losses on outstanding options contracts entered into based on underlying foreign currency to hedge the associated currency during the quarter, stood at Rs.5.66 crore.
The notes to the accounts said: “Quarter and nine months ended December 31, results include net foreign exchange loss of Rs 67.03 crore and Rs 91.77 crore respectively (previous corresponding period net gain of Rs 22.31 crore and Rs 59.23 crore respectively) has been adjusted to the respective heads of accounts in the results.”
jayanta_mallick @thehindu.co.in
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