Losing Battle against Rising Costs

Losing Battle against Rising Costs Hansavivek ESCORTS was able to achieve increased turnover in most of its products during 1984, but it had to fight a losing battle on the profitability front due to cost pressure on inputs. Moreover, profits were also affected by prolonged labour unrest at the Bangalore plant, and, the company's new projects of the floating dry dock at Bombay and 350 CC motor cycle, which are still going through the initial stabilisation period. The dry dock, owing to problems of port jurisdiction and environmental controls together with continuing recession in the shipping industry, was functional for only about 5 months in the year While the company's turnover increased from the previous year's Rs 253 crore to Rs 293 crore, gross profit declined from Rs 23.81 crore to Rs 21.71 crore. With both depreciation and the tax liability claiming more, net profit fell from Rs 14.12 crore to Rs. 8.67 crore. Dividend has been maintained at 22 per cent and is still covered 2.92 times by earnings as against 4.76 times previously. The piston assembly plant at Bangalore resumed working on February 12 last after a production linked settlement was signed.