TNPPL is a leading manufacturer of linear alkyl benzene (LAB) used in the soap and detergents industry. It also makes ECH, used to manufacture epoxy resins and plant pesticides. In FY 2001-02, TNPPL acquired the heavy chemicals division of Spic. TNPPL was the first company in the world to introduce an advanced process control system at its linear alkyl benzene (LAB) plant. It was also the first company to export LAB from India. TNPPL was originally promoted by the Tamil Nadu Industrial Development Corporation (TIDCO) but was later converted into a joint-sector company in association with Southern Petrochemical Industries Corporation (Spic).

The Company has, during the period 1995 to 2003 invested Rs 27.65 crore in SPIC Electric Power Corporation. The Company has entered into a Memorandum of Understanding with a party, for a detailed technical specification and cost structure of the complete project and to develop a plan of finance for the project to achieve early financial closure. The party is in the process of finalizing the consortium members for equity participation, debt syndication and major project contractors.

Quarterly Results:

For the quarter ended March 2006, the sales of the company were 10% higher at Rs. 210.32 crore and witnessed negative margins at the operating levels. leading to a loss of Rs 0.99 crore at the operating level. The cost of raw materials consumed as a percentage to net sales (net of stock adjustment) increased to 53.5% during June 2006 quarter from 51.1% during corresponding previous quarter. Staff cost and other expenditure also increased significantly from 18.6% to 21.7% and from 13.7% to 20% respectively. While all other expenses as a % of sales (net of stock adjustment) decreased. Other income during the quarter was up by 18% at Rs. 2.15 crore. The PBDIT was 92% down at Rs. 1.16 crore. The interest costs was higher by 23% to Rs. 6.62 crore while the depreciation costs came down 13% to Rs. 8.51 crore. The PBT (after EO) was a negative of Rs. 13.97 crore as against positive Rs 0.21 crore in the corresponding previous quarter. After tax credit of Rs 2.84 crore and deferred tax credit of Rs 1.67 crore the company witnessed a net loss of Rs 9.46 crore as against a profit of Rs 1.80 crore.

Board's comment: The company is in discussion with prospective investors for implementation of the project. In view of these developments, no provision for permanent diminution in the value of investment is considered necessary at this stage.

Annual Results:

For the year ended March 2006, the sales of the company were 11% higher at Rs. 810.58 crore. The operating margins slumped by 690 basis points to 10.5% leading to a 30% reduction in operating profits. The other income rose 15% to Rs. 7.76 crore. The interest costs went down by 19% to Rs. 21.88 crore and the depreciation charges were 22% lower at Rs. 38.68 crore. Thus, the PBT witnessed an 84% reduction in net profits to Rs. 1.06 crore. Considering tax provisions and prior period adjustments, the PAT was 83% down at Rs. 2.04 crore.

The scrip is trading at around Rs. 15 on the BSE

Promoters’ shareholding is unchanged at 34.55%