Menu

Markets

Hero MotoCorp Ltd Q1 FY23 Result Updates.
Business, Equities, Market News, Markets, Research, Result Updates - August 25, 2022

Hero MotoCorp Ltd Q1 FY23 Result Updates. Input cost pressures to impact performance.

Hero MotoCorp Ltd Q1 FY23 Result Updates.
Input cost pressures to impact performance.

Hero MotoCorp Ltd reported a net profit of Rs. 624.5 crores, increased by 70.9% YoY from Rs. 365.4 crores and down by 0.4% QoQ from Rs. 627.1 crores. The net profit margin came at 7.4%, up by 78 bps YoY and down by 101 bps QoQ.
The total income stood at Rs. 8392.5 crores as compared to Rs. 5487.1 crores up by 53% YoY and 13.1% QoQ from Rs. 7421.7 crores. Gross margin for the quarter is 27.2%, down by 24 bps YoY and 348 bps QoQ.
The Earnings before interest, tax, depreciation and, amortization is at Rs. 940.8 crores as against 514.8 crores in June 2021 and 827.6 crores in the March quarter.
Q1FY23 numbers are below estimates largely due to input cost pressures, which expect to cool-off in the subsequent quarters owing to softening of commodity prices.

Domestic market share improved.

QoQ domestic motorcycle market share improved by 425bps to 51.8% and scooters share improved by 60bps to 6.7%. This is driven by premium xTec series, healthy marriage season & rural uptick. Export demand is facing headwinds due to currency depreciation & geopolitical conditions.
Two wheeler demand is on a healthy trajectory supported by normal monsoon & opening up of all sectors in the economy. Hero MotoCorp’s Q1 retails were better than wholesales. The underlying demand is good and the momentum is in the right direction. The company launched various models in xTec series; this along with future launches should help improve the market share in scooters and motorcycles. xTec series prices are 7-10% higher than base models, the demand for these models are better than anticipated.
July sales were lower as some variants were facing chip issues. Normal inventory level is 6-8 weeks, and by the end of June, the inventory was 6-7 weeks. On scooters, it launched Destini 125cc xTec model with good features and has been doing well. Export demand is facing some headwinds due to currency depreciation & geopolitical conditions . The demand for xTec series is healthy despite 7-10% higher prices.
Employee cost inched-up by 13% QoQ due to salary revision (higher increments than previous years) and bonus. Some part of it will moderate. No major cost impact expected due to OBD2. Other income declined sharply due to MTM loss of Rs 600mn. Blended realization dropped QoQ by 3% due to lower sales from spare parts, lower other operating income (Rs 1.09bn in Q1 vs. Rs 1.86bn in Q4) and expiry of Neemrana plant benefit. The core realization improved by Rs 800 QoQ due to price increase and better mix. QoQ drop is mostly due to seasonality.

The shares of Hero MotoCorp Ltd are trading at Rs. 2802.25, down by 0.15%.

Valuations:
The return on equity (ROE) is 14.4% for the quarter ended June 2022. The price-to-earning (P/E) ratio stood at 21.2. The return on capital employed (ROCE) for the company is 18.6%. The price to book value of Hero MotoCorp Ltd is 3.55. The EV/EBITDA is 13.3. EPS during the quarter came at Rs. 133.

Campus Active Wear Limited Q1 FY23 Result Updates. Net profit surged to Rs. 28.66 crores driven by strong demand.

Linc Pen and Plastics Ltd Q1 FY23 Result Updates. Increase in selling price to improve gross margin.

Trident Industries’ net profit stands at Rs. 129.35 crores.

Gujarat Alkalies clocked a net profit of Rs. 220 Cr. in Q1 FY23.

, 0 Comment
Read More
BHEL Secures Major Power Project Contracts from Adani Group
Business, Editorials, Markets, Research Reports - August 25, 2022

Bhageria India reported a net profit of Rs. 2.38 cr.

Bhageria India reported a net profit of Rs. 2.38 cr.

The net sales were at Rs 108.12 crore in June 2022, down 4.33% from Rs 113.02 crore in June 2021. The quarterly net profit stood at Rs. 2.38 crore in June 2022, down 81.65% from Rs. 12.96 crore in June 2021. The EBITDA stands at Rs. 11.99 crore in June 2022, down 49.83% from Rs. 23.90 crore in June 2021.

Are retained earnings used effectively?

The company earned revenue of Rs.99.59 Cr from the chemical segment, Rs.8 Cr. from solar power and Rs.0.4 Cr. from other segments for the year ending in March 2021. The EBIT from the chemical segment was Rs. 2.43 Cr., Rs. 3.75 Cr. from the solar power segment and Rs. 0.86 from other. The company incurred a finance cost of Rs. 1.08 cr. and other unallocated expenditure of Rs. 2.38 cr. The surplus current assets suggest that Bhageria Industries has a conservative balance sheet and could probably eliminate its debt without much difficulty. Succinctly put, Bhageria Industries boasts net cash, so it’s fair to say it does not have a heavy debt load.

Any business needs free cash flow to pay off debt; accounting profits just don’t cut it. Bhageria Industries has net cash on the balance sheet, but it is still interesting to look at how well the business converts its earnings before interest and tax (EBIT) to free cash flow, because that will influence both its need for, and its capacity to manage debt. Bhageria Industries created free cash flow of 14% of its EBIT. That level of cash conversion undermines its ability to manage and pay down debt. While it is always sensible to investigate a company’s debt, in this case, Bhageria Industries has 152.4m in net cash and a decent-looking balance sheet. So we are not troubled with Bhageria Industries’s debt use. However, not all investment risk resides on the balance sheet.

Valuations:

EPS is at Rs.0.55 for the June quarter as compared to Rs.4.17 in the March quarter and Rs.2.39 in the June 2021 quarter. The ROCE and ROE are at 19.2% and 14.7%, respectively. The EBITDA stood at 6.48x while the price to book ratio was at 1.46x. The stock was trading at a P/E ratio of 12.3x. The scrip was at Rs.170 on Thursday, up by 0.18%.

 

 

, , , , 0 Comment
Read More
Hindalco Industries plans to invest Rs. 15,000 crore in Madhya Pradesh
Business, Editorials, IPO research, Markets, Research - August 25, 2022

ONCG made a profit of Rs. 15205 Cr.

ONCG made a profit of Rs. 15205 Cr.

ONCG reported a standalone profit of Rs 15,205.85 crore for the month of June 2022, up 251% compared to the year-ago period, driven by strong operating performance and top-line growth. The standalone profit in Q1 FY22 stood at Rs 4,334.75 crore. The standalone revenue for the June FY23 quarter grew by 84% to Rs 42,321 crore compared to the corresponding period last fiscal. ONGC had a 91% year-on-year growth in its offshore business at Rs 27,990.4 crore and its onshore business increased by 72% to Rs 14,330.3 crore during the quarter.

Consistent natural gas output

At 1.63 million tons, Oil and Natural Gas Corporation (ONGC) produced 1.7% less oil due to lower output from western offshore. The production decreased by 12.34% in fields run by private businesses. However, compared to April through July 2021, when output was 9.96 million tons, it was only slightly lower during the first four months of the current fiscal, which started on April 1. On August 4, Oil Minister Hardeep Singh Puri tweeted that the trend of diminishing crude oil production had changed. The data from the ministry showed that Vedanta’s Rajasthan block had a lower output than ONGC’s oilfields in Gujarat and Assam.

The natural gas output was nearly steady in July at 2.88 billion cubic metres but was 3.4% higher from April to July at 11.43 bcm. The refineries processed 83.96 million tonnes of crude oil between April and July, operating at 103.87% of their capacity, compared to an operating rate of 92.01% for processing 76.64 million tons. Fuel production increased by 6.23% in July to 21.97 million tonnes and by 11.67% from April to July to 90 million tons.

The company has fixed August 19th, 2022 as the “Record Date” for determining members eligible to receive a final dividend of 3.25 per share (i.e., @ 65%) for the financial year 2021-22.

Valuations:

The EPS stood at Rs. 12.09 for Q1 FY23. The price to book ratio was at 0.73x. The return on assets was at 12.3%. The interest coverage ratio was 24x for June 2021. The EBITDA was at 2.50x. The ROCE and ROE were at 18.0% and 18.2%, respectively. The stock is trading at 3.35x while the five-year P/E ratio is at 7.51x. The scrip closed at Rs.136, up by 1.68% on Wednesday.

 

, , , , 0 Comment
Read More
Apollo Hospitals Boosts Digital Oncology with Acquisition
Business, Equities, Market News, Markets, Research, Result Updates - August 25, 2022

Alembic Pharmaceuticals Ltd Q1 FY23 Result Updates. Profitability declined due to sales decline and increased costs.

Alembic Pharmaceuticals Ltd Q1 FY23 Result Updates.
Profitability declined due to sales decline and increased costs.

The company witnessed a 4.8% YoY (-10.8% QoQ) decline in the revenue to Rs. 12.62 bn in Q1FY23. This was due to flat to a decline in the US, Ex-USA, and India formulations revenue as well as in the API revenue on a YoY basis, in Q1FY23.
The EBITDA margins declined 871 bps YoY (-222 bps QoQ) to 9.1% and EBITDA declined 51.4% YoY (-28.4% QoQ) to Rs. 1.15 bn in Q1FY23.
The company incurred a net loss of Rs. 659.0 mn in Q1FY23 vs. net income of Rs. 355.0 mn in Q4FY22 and a net profit of Rs. 1.65 bn in Q1FY22. Adjusting for the unusual expenses, the company’s adjusted net profits declined 70.2% YoY (+38.3% QoQ) to INR 491.0 mn in Q1FY23.

Revenue decline across segments.

The US revenue declined 0.5% YoY (-34.1% QoQ, 29.0% of revenue), the Ex-USA revenue declined 7.6% YoY (-3.2% QoQ, 14.0%), India revenue declined -0.2% YoY (+6.9% QoQ, 38.0%) and API revenue declined 16.5% YoY (+5.0% QoQ, 18.0%). The US revenue was flat YoY due to price erosion across the portfolio; partially offset by higher volumes with market share gains. The sequential revenue growth was negative for the US, due to the higher stocking carried out by the distributors in Q4FY22. India’s revenue was affected due to the higher base effect of Q1FY22 with more of COVID 19 product sales then. However, excluding COVID 19 sales, India branded business revenue would have grown at 20.0% YoY in Q1FY23. The API sales decline was due to lower volumes in Q1FY23.

The company’s gross profit margins (GPMs) declined 131 bps YoY (-374 bps QoQ) to 70.0% in Q1FY23 due to increased raw materials costs (as a % of revenue) in Q1FY23. Gross profits declined 6.1% YoY (- 14.2% QoQ) to Rs. 8.84 bn. Also, the EBITDA margins declined 871 bps YoY (-222 bps QoQ) to 9.1% and EBITDA declined 51.4% YoY (-28.4% QoQ) to Rs. 1.15 bn in Q1FY23. The company’s employee costs remained flat YoY (+4.8% QoQ) and other expenses increased 15.3% YoY (- 19.2% QoQ). However, with a 41.5% YoY (-89.3% QoQ) fall in other income, Rs. 1.15 bn of Aleorrelated unusual impairment expenses, and a 316.6% YoY (+31.2% QoQ) rise in interest expenses.

With the change in crude oil prices, the company is witnessing an increase in costs such as of solvents and materials costs but is trying to contain the costs as much as possible. The margins have eroded in the US across therapy products.

The shares of Alembic Pharmaceuticals Ltd. are trading at Rs. 658.95, up by 1.36%.

Valuations:
The return on equity (ROE) is 10% for the quarter ended June 2022. The price-to-earning (P/E) ratio stood at 43.7. The return on capital employed (ROCE) for the company is 11.1%. The price to book value of Alembic Pharmaceuticals Ltd. is 2.46. The EV/EBITDA is 19.3. EPS during the quarter came at Rs. 16.

Campus Active Wear Limited Q1 FY23 Result Updates. Net profit surged to Rs. 28.66 crores driven by strong demand.

Linc Pen and Plastics Ltd Q1 FY23 Result Updates. Increase in selling price to improve gross margin.

Trident Industries’ net profit stands at Rs. 129.35 crores.

Gujarat Alkalies clocked a net profit of Rs. 220 Cr. in Q1 FY23.

, 0 Comment
Read More
Easing of risk weights on loans given to MFIs and NBFCs
Banking, Editorials, Equities, Markets, Result Updates - August 24, 2022

DCB Bank’s (DCBB) Q1 FY23 earnings

DCB Bank’s (DCBB) Q1 FY23 earnings:

The PAT for DCB bank was at Rs. 97 cr. in comparison to Rs. 34 cr. from the same quarter a year ago, with a growth of 188%. Total revenue in the June quarter was Rs. 949 Cr., compared to Rs. 920 Cr. in March 2021 and Rs. 846 Cr. in June 2021. There was an 18% growth in advances YOY and a 14% growth in deposits. The Gross NPA as on June 2022 was at 4.21% while the Net NPA was at 1.82 qoq as on June 2022. Both Gross NPA and Net NPA declined sequentially as well as in comparison to last year.

Ratios to improve in the June quarter:

The Provision Coverage Ratio (PCR) was at 69.480 and the PCR without considering Gold Loans NPAs was at 73.39%. The Capital Adequacy Ratio was at 18.47%, with Tier I at 15.44% and Tier ll at 3.03% as per norms. The CASA (Current Account Savings Account) ratio was at 29% in the June quarter compared to 27% in the previous quarter. The savings account balances between 2 lakh and less than 5 lakh rupees had an interest rate of 5.00%, while balances between 5 lakh and less than 10 lakh rupees had an interest rate of 6.00%. On savings account balances between 10 lakh and less than 25 lakh, there is an interest rate of 6.75%. DCB Bank has given a maximum interest rate of 7% on savings account balances between 25 lakh and less than 2 crore. Savings accounts with balances of between 2 crore and less than 50 crore will now earn interest at a rate of 5.50%, while accounts with balances of over 50 crore will now earn interest at a rate of 5.00%.

Due to lower credit costs and better loan growth, gross slippages continued to remain elevated, mainly stemming from the gold portfolio, largely offset by higher recovery and upgrades, resulting in a GNPA of 4.3%. The stress pool continues to remain sticky, but the management expects improving collection efficiency to reflect in better asset quality on the back of a granular and secured portfolio of approximately 95%. With asset quality still stubborn and loan growth looking soft, there is less room for any positive surprise from operating efficiency.

Valuations:

The price to book ratio stood at 0.64x. The return on assets was 0.68%. The interest coverage ratio was 1.22x for June 2021. The return on capital employed was at 6.30% while the return on equity was at 7.37%. The EBITDA was recorded at 14.0x. The (CAR) capital adequacy ratio continues to be strong at 18.47%. The scrip was trading at Rs. 83.1, down by 0.54% on Wednesday.

, , , , 0 Comment
Read More
D-Mart's Q3 Results Miss Estimates, Faces Margin Pressure and Leadership Change
Business, Equities, Market News, Markets, Research, Result Updates - August 24, 2022

Britannia Industries Limited Q1 FY23 Result Updates. Net profit growth driven by increase in prices.

Britannia Industries Limited Q1 FY23 Result Updates.
Net profit growth driven by increase in prices.

Britannia Industries Limited reported a net profit of Rs. 337.4 crores, declined by 11.2% YoY from Rs. 389.6 crores and sequentially fell by 11.2% QoQ from Rs. 379.9 crores in the previous quarter. The net profit margin stood at 9.1%, declined by 158 bps QoQ and 233 bps YoY.
The revenue for the June quarter stood at Rs. 3701 crores, up by 8.7% YoY from Rs. 3403.5 crores and increased by 4.2% QoQ from Rs. 3550.5 crores.
The Earnings before interest, tax, depreciation, and amortization stood at Rs. 500.7 crores from Rs. 553.8 crores down by 9.6% YoY and from Rs. 549.7 crores down by 8.9% QoQ. The EBITDA margin is 13.5%, down by 195 bps QoQ and 274 bps YoY.

Commodity cost inflation impact margins.

Volume decline YoY has been in small single digit in Q1FY23, while total price increase would be over 20.0% YoY. Number of packages sold was flat. Biscuits being the cheapest form of snacking has relatively fared better, which has helped the company in not seeing a big drop in the topline. Despite the price increases, the company has not seen any big impact on the volumes. It has seen good traction in urban as well as rural markets. The growth in premium categories is faster than the bottom of the pyramid. Britannia’s adjacent businesses have continued to perform well in Q1FY23. Cakes have grown in double-digit in volume as well as value terms. Dairy business has also seen double-digit growth in the quarter with “Winkin Cow” growing at 140.0% YoY. Britannia has consistently gained market share over the last 36 quarters. Market share gain was better in rural than urban, as Britannia further expanded its rural reach which now stands at 27,000 rural preferred dealers.

Commodities such as Wheat & Industrial fuel witnessed sequential inflation in the range of 15.0% to 20.0% in Q1FY23. To mitigate the impact of cost inflation, Britannia has taken continuous price increases in Q1FY23 as well as Q2FY23. It has also accelerated its cost efficiency programs and plans to deliver cost savings to the tune of 3.0% of revenue in FY23. Softening of commodity prices and full effect of the price increases taken by Britannia should result in margin improvement in coming quarters.

Q1FY23 had consumer food price inflation of 8.0% YoY. By 30th June 2022, wheat inflation has come down to 50.0%. Similarly, for palm oil, on the same base of Q3FY21, inflation for Q4FY22 / Q1FY23 was 80.0%/ 90.0% respectively, which came down to 50.0% by 30th June 2022. Other key raw materials such as industrial fuel and packing material also saw QoQ jump in inflation in Q1FY23. To mitigate the cost inflation, Britannia has taken price increases. Britannia has seen market share gains consistently over last 36 quarters and seeing good performance in rural India as well. Britannia is seeing good traction in Adjacent businesses with double-digit volume & value growth in cakes, profitable growth in breads, double digit growth in dairy, national scale up for croissants, and good performance in international markets. In the domestic business, currently the contribution of biscuits and bakery adjacencies is 80%: 20% respectively. Cost efficiency efforts in Q1FY23 were on the lines of reduction in distance to market, improvement in truck utilization, reduction in power costs, and reduction in market returns.

The shares of Britannia Industries Limited are trading at Rs. 3639, down by 1.01%.

Valuations:

The return on equity (ROE) is 49.7% for the quarter ended June 2022. The price-to-earning (P/E) ratio stood at 59.8. The return on capital employed (ROCE) for the company is 41.5%. The price to book value of Britannia Industries Limited is 34.2. The EV/EBITDA is 38. EPS during the quarter came at Rs. 61.1.

Campus Active Wear Limited Q1 FY23 Result Updates. Net profit surged to Rs. 28.66 crores driven by strong demand.

Linc Pen and Plastics Ltd Q1 FY23 Result Updates. Increase in selling price to improve gross margin.

Trident Industries’ net profit stands at Rs. 129.35 crores.

Gujarat Alkalies clocked a net profit of Rs. 220 Cr. in Q1 FY23.

, 0 Comment
Read More
Krishna Institute reported a net profit of Rs. 79 Cr.
Business, Equities, Market News, Markets, Research, Result Updates - August 24, 2022

Apollo Hospitals Enterprise Ltd Q1 FY23 Result Updates. Strong revenue growth in hospitals business.

 

Apollo Hospitals Enterprise Ltd Q1 FY23 Result Updates.
Strong revenue growth in hospitals business.

Apollo Hospitals Enterprise Ltd reported net profit of Rs. 223.78 crores, down by 35.2% YoY from Rs. 500 crores in June 2021.
Consolidated revenue from operations during the quarter under review stood at Rs 3,795.6 crore as against Rs 3,760.21 crore in the year-ago period

Total expenses during the quarter were higher at Rs 3,545.36 crore as compared to Rs 3,475.58 crore.

Apollo reported subdued set of numbers for Q1FY23. While on a YoY basis the growth was flat, however on QoQ basis there was growth of 7%.

Higher expenses to hamper margins.

EBITDA margin for Q1FY23 decreased by 90 bps YoY respectively. EBITDA margin stood at 12.9%. Occupancy across the group was 60% in Q1FY23. ARPOB (excluding vaccination) was Rs 51,999 in Q1FY23 as compared to Rs 41,102 in Q1FY22 registering growth of 27%. ALOS for Q1FY23 was 3.38 days. During the quarter, Healthcare services posted an EBITDA margin of 23.9%, Pharmacy has margin of -1.6% (after adjusting for 24×7 operating costs) and AHLL—10%. Inpatient Volumes across the group increased by 9% from 115,902 in Q4FY22 to 126,511
The combined pharmacy business degrew by 1% YoY. The private label sales in the Pharmacy Distribution business was 10.3% during the quarter. Apollo 24/7 had a GMV of Rs 215 cr in Q1FY2023 and the company is on track to deliver GMV of 1500 cr in FY22-23. For Apollo 24/7, number of orders are 35k per day as compared to 25k in Mar Q1FY22.
AHLL showed very impressive topline growth and the margins have also improved on a YoY basis. Lot many collection centres in the diagnostics vertical have been added during this period and home collection has also improved. The diagnostics business within AHLL degrew by 5% over Q1FY22. Expansion of network and phlebotomist count continues. B2C segment is now contributing to 55% of revenue. After 3 years the contribution is expected to rise to 60%. Rs 1000 cr revenue. Despite lower vaccine sales, revival in primary and secondary care, along with continued strong performance in diagnostics led to AHLL EBITDA of Rs 294 mn.
Q1FY23 saw increase in Average revenue per occupied bed (ARPOB)s for the mature and new hospitals of Apollo. The proportion of local patients being treated in Apollo Hospitals continued to improve. There has been an improvement in EBITDA margins of new and existing hospitals both on a YoY and QoQ basis. The management is guiding for robust mid-teens growth and 20% yoy growth in hospitals and pharmacies respectively, in FY23. For hospitals, the management is also guiding for margin expansion of 150- 200 bps yoy in FY23, led by improved mix and cost optimization. IP Volumes across the group grew by 9% QoQ. Mature hospital volumes grew 13% QoQ, while new hospitals volumes grew by 1% QoQ in Q1FY23. Diagnostics and Primary care are being ramped up in AHLL (Apollo Health and Lifestyle Limited). The Diagnostics sub segment registered a degrowth of 23%YoY during the quarter due to high base of Covid. Gross margins at a consolidated level have improved because of less Covid contribution.
The shares of Apollo Hospitals Enterprise Ltd
are trading at Rs. 4059.50, up by 1.46%.

Valuations:

The return on equity (ROE) is 16.6% for the quarter ended June 2022. The price-to-earning (P/E) ratio stood at 66.4. The return on capital employed (ROCE) for the company is 17.8%. The price to book value of Apollo Hospitals Enterprise Ltd
is 10.4. The EV/EBITDA is 27.7. EPS during the quarter came at Rs. 61.4

, 0 Comment
Read More
Dalmia Bharat Reports Disappointing Q3 Results, Sees Limited Short-Term Growth
Business, Equities, Market News, Markets, Research, Result Updates - August 23, 2022

Emmbi Industries Ltd Q1 FY23 Result Updates. Weak performance in domestic market hampered revenue.

Emmbi Industries Ltd Q1 FY23 Result Updates.
Weak performance in domestic market hampered revenue.

Emmbi Industries Ltd reported a net profit of Rs. 3 crores, declined by 32.3% YoY from Rs. 4.5 crores and 34% QoQ from Rs. 4.6 crores. Net profit margin contracted by 143 bps YoY and 134 bps QoQ to 2.9%.
In Q1FY23, Emmbi’s revenue grew 1.6% YoY to Rs. 105.8 crores from Rs. 104.2 crores. Though on QoQ basis revenues declined by 3.0% from Rs. 109.1 crores.
Earnings before interest, tax, depreciation, and amortization ( EBITDA) has seen a decline of 4.7% YoY from Rs. 11.1 crores and 17.3% QoQ from Rs. 12.8 crores to Rs. 10.6 crores. The fall in EBITDA was due to higher other expenses, which increased 44.1% YoY to Rs. 25.1 crores for the quarter. EBITDA margin also contracted by 66 bps YoY and 173 bps QoQ to 10
Emmbi is embarking on the path to become a zero-waste company by FY23. The company is right on track for the same and is confident to reach the ambitious target.
Muted revenue growth on account of subdued domestic market performance In Q1FY23, Emmbi’s revenue saw a muted growth of 1.6% YoY to Rs. 105.8 crores, on account of subdued performance in its domestic market. Sequentially revenues declined by 3.0% QoQ on a high base of last quarter.
Emmbi is witnessing strong traction in its export market. The company has a robust export order book. Emmbi launched the Reclaim30 range products, to cater to the UK’s new plastic packaging tax. Reclaim30 is Emmbi’s range of sustainable plastic packaging, which uses 30%+ recycled polypropylene. The product which was launched last year is now a commercial success. New trials are now successful to produce some of the Avana Retail Range of products. This will be very pathbreaking innovation for the company. The company is now working on designing products with higher content of rPP.

Higher input costs impacted margin.

The fall in EBITDA was due to higher other expenses, which increased 44.1% YoY to Rs. 25.1 crores for the quarter. Higher freight costs which were included in other expenses has jacked up the other expenses figure for the quarter. EBITDA margin also contracted by 66 bps YoY and 173 bps QoQ to 10%. Higher interest costs (+14.6% YoY) and depreciation expenses (+17.2% YoY) impacted PAT. PAT margin also suffered a contraction of 143 bps YoY/134 bps QoQ to 2.9%.

The shares of Emmbi Industries Ltd are trading at Rs. 97.70, up by 0.36%.

Valuations:

The return on equity (ROE) is 13.2% for the quarter ended June 2022. The price-to-earning (P/E) ratio stood at 9.72. The return on capital employed (ROCE) for the company is 14.2%. The price to book value of Emmbi Industries Ltd is 11.2. The EV/EBITDA is 6.45. EPS during the quarter came at Rs. 9.94. %.

Campus Active Wear Limited Q1 FY23 Result Updates. Net profit surged to Rs. 28.66 crores driven by strong demand.

Linc Pen and Plastics Ltd Q1 FY23 Result Updates. Increase in selling price to improve gross margin.

Trident Industries’ net profit stands at Rs. 129.35 crores.

Gujarat Alkalies clocked a net profit of Rs. 220 Cr. in Q1 FY23.

, 0 Comment
Read More
BKT announced a net profit of Rs. 306 crores in Q1 FY23.
Equities, Markets, Result Updates - August 23, 2022

BKT announced a net profit of Rs. 306 crores in Q1 FY23.

BKT announced a net profit of Rs. 306 crores in Q1 FY23.

In June 2022, net sales were Rs 2,619.43 crore, up 45.29% from Rs 1,802.87 crore in June 2021, and consolidated total income was Rs 2483.58 crore, up 15.04% from the previous quarter. The net profit was at Rs. 306.96 crores in June 2022, down 7.14% from Rs. 330.56 crores in June 2021. The company’s reported earnings before interest, taxes, depreciation, and amortisation (Ebitda) margins were down 550 basis points (bps) quarter-on-quarter (QoQ) and 910 bps year-on-year (YoY) to 20.1 percent.

BKT tyres are experiencing a sustained increase in demand.

Raw materials prices have remained at elevated levels during the current quarter. The raw material costs have come to 46.6% of sales in Q1FY23 as against 42.8% in Q1FY22 and 45.3% in Q4FY22. The management expects the ease in raw material prices to be visible from Q4FY23 onwards. It also expects relief in logistics towards the end of Q3 or early Q4. There is a continued and sustained uptick in demand for tires. However, in Q2, it is expected to have sluggish demand given macro challenges in Europe coupled with heat waves and inflationary trends in the USA. However, the management retained its sales volume guidance of 3.2-3.3 lakh tonnes for FY23.

Balkrishna Industries’ margin performance was the real constraint. Gross margin erosion was sharp at 150 bps QoQ, while other expenses (driven by higher freight costs) were up 210 bps QoQ. The management commentary suggests Q2FY23 will be weak amidst sluggish demand prospects in Europe and the US. BKT’s key product range comprises specialty tires, commonly known as “Off-Highway Tires” or OHT, that cater to agriculture, industrial, construction, earthmoving, mining, port, lawn and garden, and all-terrain vehicle tires. Besides, the company’s carbon black product is used captively and the balance is sold in the markets.

Tires are a highly technical and capital-intensive segment, also known as the “large variety, low volume segment.” The credible players are required to maintain a large number of stock-keeping units to meet the diverse needs of their customers globally and also provide prepared-and-sale customer service.

While agriculture is regarded as non-cyclical, the other sub-segment is considered cyclical. Their performance is closely tied to the global economic outlook. Europe, America, Australia, and India are the primary markets for the company’s tyre lines.

Valuations:

Balkrishna Ind EPS has decreased to Rs. 15.88 in June 2022 from Rs. 17.10 in June 2021. The stock P/E is valued at 29x, while the five-year P/E is at 24.9x. The return on capital employed is at 23.8% and the return on equity is at 21.9%. The EBITDA stood at 18.1x. The interest coverage ratio is at 201 and the return on assets is at 14.8%. The scrip was trading at Rs.2,122, up by 0.19% on Tuesday.

0 Comment
Read More
Business, Equities, Markets, Research Reports - August 23, 2022

Financial Results for Pokarna LTD.

Financial Results for Pokarna LTD. (Q1 FY2023)

Pokarna Ltd has reported an income of Rs. 240.3884 crores during the period ended June 2022 as compared to Rs. 205.2388 crores during the period ended March 2022. The company has posted a net profit or (loss) of Rs. 28.4906 crores for the period ended June 30, 2022, as against a net profit or (loss) of Rs. 20.1066 crores for the period ended March 31, 2022. The EBITDA stood at Rs. 46.02 crores in March 2022, up 107.58% from Rs. 22.17 crores in March 2021. The margins would have been better but for the forex loss of Rs. 6.82 cr on account of restatement of debt drawn for establishing a new unit, which was offset against the forex gain on exports. The net forex loss charged to the P & L account is Rs. 1.65 cr, reported under other expenses.

Business growth remains strong.

The business environment remains challenging. While sequentially there is an improvement, on an overall basis, business continues to face growth hurdles. The revenue growth remains strong on the back of higher offtake and new product launches. We expect sales momentum to be sustained as new units start ramping up production. The operating margins stood at 25% for the quarter. The focus is on improving the capacity utilisation of new quartz units. Supply chain disruptions, port congestion, container unavailability, and rising shipping costs continue to pose a challenge. The exports to the East Coast, though, have smoothened to an extent. The states of Telangana and Andhra Pradesh are found to be home to some of the best quality quartz raw materials. In addition to private label manufacturing, it is distributed and supplied across the globe under the brand name Quantra. The sourcing of the majority of raw material was from captive quarries, which are home to some of the most sought-after colors. The company’s colour palette includes over 75 varieties of granite sourced from India, Ukraine, Madagascar, and Norway. The deep and entrenched relationship with dealers across key regions of operations

Valuations:

Pokarna EPS stood at Rs. 6.49. The Return on Capital Employed was at 2.39%, whereas the Return on Equity (ROE) was at 0.06%. The EBITDA was at 172x and the P/E ratio was at 52.2x. The price-to-book ratio was recorded at 13.2x and the interest coverage ratio was at 0.33x. The scrip was trading at Rs.550, down by 2.90% on Monday.

, , , 0 Comment
Read More