India, Nov. 5 -- Nilkamal has shown a significant improvement in its profitability, this being mainly due to a sharp rise in the use of its manufacturing capacity from one period to the next rather than as a result of raw material cost pressures easing. Although high input costs had earlier compressed operating margins and limited the absorption of fixed costs, the strong increase in sales volume enabled the company to cover its overheads over a much larger production base.

The ability to generate revenue through high volume allowed standalone revenues to grow in line with a significant improvement in operating profits and wider margins. Yet it is still essential to decide whether this surge in profits indicates a genuine, long-term st...