IPCL's solid spurt in morning trades after inspiring results fizzled out as institutions began to offload.

As per market talk, the Enam group is selling the IPCL stock on Wednesday. This prompted the stock's erosion, and, at the current juncture, the scrip of the Reliance group petrochemicals company has declined 2.43% to Rs 86.30 (by 11:55 IST). It had hit a high of Rs 91.15 earlier. IPCL has so far recorded volumes of over 800,000 shares on BSE.

IPCL started off firm on Wednesday after results by the company proved better than even the most optimistic expectations of analysts, but detracted later. Sources say the Enam group, that had earlier accumulated the stock on expectations of good results, is now offloading a part of its holding to book profits.

After market hours Tuesday, the petrochemicals company said that, for Q4 ended 31 March 2003, it registered a massive 76.5% rise in net profit to Rs 90 crore on a marginal 0.3% increase in net sales to Rs 1,373 crore (Rs 13.73 billion).

The early euphoria on the counter stemmed from the fact that analysts had only expected the company to post a net profit in the range of Rs 62-65 crore. As for net sales, they were expected in the range of Rs 1,650-1,710 crore (Rs 16.5-17.1 billion).

But the fact that analysts didn't seem overly impressed by the results, as the bottom line growth has mainly arisen due to cost cutting and interest cost saving, may now be working on the stock. In any case, analysts hope to see the company improve operations in the current year on expectation of a turnaround in the petrochemicals sector. Going ahead, product prices are expected to remain strong, but volume growth is a concern.

For the year ended 31 March 2003, IPCL's net profit stood at Rs 204 crore (Rs 2.04 billion) on net sales of Rs 5,029 crore (Rs 50.29 billion). The company has declared a dividend of Rs 2.25 per share (on face value of Rs 10 per share) for FY 2002-03.

Commenting on the results, Mukesh D Ambani, chairman, IPCL, said, "We are delighted with the complete turnaround in IPCL's performance in the very first year of acquisition by Reliance. The improved performance reflects the successful absorption of Reliance's best practices by IPCL in all areas of operations, and the positive impact of measures introduced for cost reduction and productivity and efficiency gains. We have great confidence in the capabilities of IPCL and its people, and are confident of further improvement in the company's performance in future

As on 31 March 2003, promoters held 79.98% stake in IPCL, while public and institutions held 8.9% and 8.38% respectively.

BSE code: 500105