ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Facing Recession through Diversification

Facing Recession through Diversification Hansavivek GREAVES COTTON'S results are good. Total turnover is lower than in the previous year because group exports, which were previously handled by a division of the company, are now completely handled by a subsidiary 'Greaves International'. Home sales in fact rose by 11 per cent over the year. Gross profit is modestly better indicating improved margins despite substantial increase in interest charges. Net profit is lower owing to higher tax liability and dividend stepped down by two points to 10 per cent on the capital enlarged by a bonus issue' is covered 3.2 times against 4.6 times previously. Among manufacturing divisions, Greavestool's performance was affected by demand recession and prices had to be reduced considerably. Production of small diamond core drills and mud - pumps has already commenced. Heavy duty diamond core drills in technical collaboration with Diamant Boart of Belgium are expected to be produced next year. There has been a growing demand for industrial valves, the main product of the light engineering division, and the order book is also quite encouraging. As products of this unit have been developed internally without any foreign collaboration, gestation period has been long. The unit has therefore not yet contributed to the earnings of the company. The factory is being shifted from the present rented premises in Bombay to the rock bit factory at Nasik to achieve economies in operation. The planned closure of the paper cones and tubes division plant was completed by the end of January last and the machinery is being disposed of. The rock bit manufacturing plant remained idle for the major portion of the year due to lack of orders from ONGC, the main customer. Regular ONGC pur chases are expected to start again in the near future. Meanwhile, some business has been obtained from other customers. Also, efforts are being made to export rock bits. The project division, after gaining experience in setting up the spiral welded pipe manufacturing unit for HSL at Rourkela, has started negotiations with several government agencies for large turnkey projects.

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