McDowell - Mera No. 1

McDowell - Three Cheers For Third Quarter

MCDOWELL & Co has posted 106.03 per cent increase in net profit to Rs 17.08 crore during the third quarter of 2005-06 while net sales grew 24.09 per cent to Rs 399.17 crore.

A company release said that volumes of McDowell's lead brands grew 13 per cent from 14.68 million cases to 16.54 million cases during the first nine months. Low-end brand sales were deliberately de-emphasised by the company when the input costs, particularly spirit, started rising in the previous fiscal. While spirits costs are coming down from the peak prices of last year, the company will continue its focus on the main line brands.

Consequently, overall sales volumes for the nine-month period in the current year stood at 19.5 million cases compared with 18.7 million cases earlier, registering an increase of five per cent. The emphasis on the main line brands resulted in 19 per cent increase in net sales to Rs 1,029.7 crore (Rs 862.9 crore).

Costs of the primary raw material are softening, the statement said. But the impact is yet to be felt in the 9-month period ended December 2005 as the crushing season has commenced only towards the end of the last quarter. The company expects the trend of falling prices to continue and that the forthcoming quarter's results should reflect the benefit of the falling prices unless the Government's policy on ethanol doping results in an adverse change. The statement said that interest costs are high on account of the borrowings to fund the acquisition of Shaw Wallace & Co Ltd.

The shareholders of McDowell have approved the issue of GDRs/ADRs/FCCBs and other equity-linked securities for $250 million. The board has also approved amalagamation of Zelinka Ltd and Asian Opportunities and Investments Ltd with the company with April 1, 2005 as the appointed date.