IPCL surged on Thursday on the back of its Q3 results and also ahead of its trading in the derivatives segment of NSE from Friday.

The scrip of the petrochemicals firm was up 3.8% at Rs 94.40 on the BSE in late-afternoon trades, close to the day's high of Rs 94.60. It clocked a higher volume of 1.48 million shares.

For Q3 ended December 2002, IPCL recorded a surge in its net profit on the back of a good top line growth. Yet, the rise in net profit was still below some optimistic expectations.

The IPCL stock has been witnessing a sustained rise on the bourses in the last few months. The takeover of the company by the Reliance group in May 2002 from the government under the latter's privatisation programme has led to positive sentiment towards the stock, with expectations that the operating efficiency may improve substantially now. The inclusion of the IPCL scrip in the final list of stocks for derivatives trading on the bourses from Friday (31 January 2003) has also led to the rally on the counter. From a low of Rs 56.20 on 25 October 2002, the IPCL scrip has gained 67.9% in a few months to the current Rs 94.40. It is currently at a multi-month high.

In Q3 ended December 2002, IPCL reported a 294% rise in net profit to Rs 75 crore as compared to a net profit of Rs 19 crore in the corresponding period last fiscal. Total income rose by 43% to Rs 1,574 crore from Rs 1,100 crore (Rs 11 billion). The operating profit rose by 23% to Rs 276 crore (Rs 2.76 billion) from Rs 224.34 crore (Rs 2.24 billion). The interest costs have gone down by 21% to Rs 76 crore from Rs 96.71 crore. On the other hand, the depreciation provision has gone up by 7% to Rs 114 crore (Rs 1.14 billion) from Rs 106.41 crore (Rs 1.06 billion).

Commenting on the results, Mukesh D Ambani, chairman, IPCL, said, " We are delighted to note the significant improvement in IPCL's performance within a period of two quarters from the date of the acquisition by Reliance. The improved results reflect the success of the business integration process between IPCL & Reliance & demonstrate the inherent potential of IPCL and its people, which Reliance will continue to unlock to enhance overall shareholder value."

Post-acquistion by Reliance, IPCL has been focusing on maximising its production and utilising full capacity at all its existing three plants. IPCL is a leading petrochemicals company. Its business comprises polymers, synthetic fibres, fibre intermediates, solvents, surfactants, industrial chemicals, catalysts and absorbents. Before the divestment, the Centre held a 59.75% stake in IPCL.

With the acquisition of IPCL, Reliance has garnered a near monopoly status in the polypropylene and poly vinyl chloride segments and, to some extent, in polyethylene.

IPCL is looking at an option of increasing its poly vinylchloride capacity, which is estimated at 1,50,000 tonnes at present. It has also decided to increase the capacity of ethylene di-chloride for which it is likely to invest about Rs 1,000 crore, as per reports.

BSE Code: 500105