Madras Fertilizers was ripe for the picking today after the company said it recorded a net profit of Rs 4.12 crore for FY 2002-03 after making losses in the previous year.

The scrip of the Chennai-based fertiliser maker jumped 4.42% to Rs 18.90 by 10:30 IST. By then, volumes amounted to 16,188 shares on the counter on BSE. It had recorded an even higher Rs 19.25 early today. The scrip has now risen 198% from a 52-week low of Rs 6.35 on 31 March 2003.

For FY 2002-03 ended 31 March 2003, the fertiliser PSU recorded a net profit of Rs 4.12 crore compared to a net loss of Rs 66.10 crore in the previous year. Net sales increased by 2% to Rs 1,108.20 crore (Rs 1,088.43 crore).

The rise in profit is due to a one-time interest waiver on loan from NFL. The company saved up to Rs 22.44 crore. But the results are still impressive as the company reduced its losses at the PBT level, which came down to Rs 18.32 crore (Rs 131.10 crore).

For Q4 ended 31 March 2003, the company recorded a net profit of Rs 26.26 crore (Rs 38.82 crore) on a net sales of Rs 393.87 crore (Rs 393.17 crore). Net proift is seen as a decline as the company got an interest waiver of Rs 65 crore from the government last year. However, at the PBT level, the company recorded a profit of Rs 26.26 crore compared to a loss of Rs 26.18 crore.

In fact, the stock of Madras Fertilisers has been witnessing a perpendicular movement following the government's initiative to disinvest its stake in the company. Recently, the government invited initial bids for a controlling 33.5% stake in MFL. ICICI Securities has been appointed as the advisor in the privatisation process.

Earlier (on 27 May 2003), the company announced that the Government of India (GOI) and joint promoter National Iranian Oil Company (NOIC) had signed an agreement to jointly divest their holdings in MFL. NOIC had agreed to divest its 25.77% stake along with the Government of India when the latter puts its 33.50% holding on the block. As of now, the government holds a 59% stake in Madras Fertilizers (MFL) .

In addition, to strengthen the bidding process for MFL, the government has allowed all PSU and government controlled co-operatives to participate in the privatisation process.

Hopes that a normal monsoon will increase the company's revenues has also kept the stock in the limelight.

Incorporated in the year 1966, the Chennai-based PSU, MFL, is in the business of manufacturing fertilsers such as ammonia, urea, NPK, biofertilizers and pesticides. Apart from this, the company also trades in potash and agrochemicals. The company's plant at Manali, Chennai has the capacity to produce 346500 MT of ammonia, 486750 MT of urea, 840000 MT of NPK and 400 MT of biofertilisers. It also has plants in other southern Indian states like Andhra Pradesh and Karnataka.