Arvind Mills jumped to its new 52-week peak of Rs 38.90 amid expectations that the company will likely post its highest ever net profit in Q4 ended 31 March 2003.

But the scrip of the denim maker could not sustain that high and eased to Rs 38.15, still higher than its yesterday's level. Substantial volumes of over 8.70 lakh shares have changed hands on BSE by 11:55 IST.

The scrip has now risen 106.2% from Rs 18.50 on 1 April 2003 on across-the-board buying support from institutions as well as retail players.

The interest in the scrip is being attributed to reports that the textiles major is set to post its highest ever net profit (approximately Rs 128 crore) on a turnover of Rs 1,500 crore for the year ended 31 March 2003. The company has been experiencing a spell of losses over the last few accounting periods.

The recent surge in the share price of the world's third largest manufacturer of denims is on speculation that the company's exports will increase following the adverse impact of SARS on China and South-East Asia. The rise is also on hopes that the company will be one of the biggest beneficiaries from the scrapping of the Multi-Fibre Agreement (MFA) in 2005 due to its integrated operations and high quality products.

AML is expected to turn out an impressive quarterly performance on the back of debt restructuring and other favourable parameters like growing demand, higher realisations and low input cost. The growing sales of value added products in denim, shirtings and focus on garments will also help the company to register a good growth. Denim prices have risen by around 50% during the last few months.

For the nine-month period ended 31 December 2002, AML was able to post a massive net profit of Rs 91.31 crore (loss of Rs 134.1 crore) on a 5.6% increase in net sales to Rs 1,088.31 crore (Rs 1,030.19 crore). Following the restructuring, AML has managed to reduce its interest burden to Rs 79.85 crore in the first three quarters of FY 2003 from Rs 219.71 crore in the corresponding period previous year.

As on 31 March 2003, the promoters held 51.02% stake, while the public and institutions held 31.58% and 6.73%, respectively.