The consolidated net sales for Q4 FY12 declined by 30% to Rs 1023.72 crore. Plastic business declined by 33% to Rs 891.81 crore while textile business was up by 2% to Rs 131.9 crore. The business was impacted due to monolithic and custom molding business. The monolithic business catering to the low cost housing segment has seen slower pace of execution. European crisis impacted the custom molding business for the quarter. The OPM declined by 415 basis points to 15.6%. As a result, the net profit has decreased by 46% to Rs 91.24 crore

Management Comment

Commenting on the company's financial performance, Mr. Amit Patel, Managing Director, Sintex Industries, said:

FY12 has been an extremely challenging year. A glaring slowdown domestically in the government business and the global recession led to underutilization of capacities and reduced margins. Domestically, we view this opportunity to streamline the monolithic business in terms of working capital efficiency, site management and build a profitable business model considering the changing dynamics of current business environment. I am confident we will emerge much stronger and will be back on growth track in near term. Our prefab business has grown reasonably well during the year.

The recessionary trend in Euro zone hit our custom molding business leading to a drop in both topline as well as the bottomline. We are aggressively tapping synergies as we domestically embrace the technology and enhance our capabilities to service customers globally.

The stringent measures that we take today will deliver improved returns on businesses and efficient cash management.

Consolidated Results

For the quarter ended March 2012

The consolidated net sales declined by 30% to Rs 1023.72 crore. Plastic business declined by 33% to Rs 891.81 crore while textile business was up by 2% to Rs 131.9 crore. The business was impacted due to monolithic and custom molding business. The monolithic business catering to the low cost housing segment has seen slower pace of execution. European crisis impacted the custom molding business.

The OPM declined by 415 basis points to 15.6% due to increase in employee cost by 173 basis points to 19.79% of adjusted net sales. As a result, the operating profit declined by 45% to Rs 160.02 crore.

Other income was up by 35% to Rs 11.57 crore. The interest cost decreased by 19% to Rs 23.83 crore. The depreciation has decreased by 15% to Rs 33.51 crore. The PBT before Forex has declined by 50% to Rs 114.25 crore.

There was forex gain of Rs 0.43 crore. The PBT has decreased by 50% to Rs 114.68 crore.

Tax outgo has decreased by 60% to Rs 26.25 crore. The tax rate stood at 22.9% compared to 28.1% in the corresponding quarter of last year. After considering share of profit from associates, the net profit has decreased by 46% to Rs 91.24 crore.

For FY12

The consolidated net sales have decreased 1% to Rs 4453.54 crore. Plastic business de-grew by 2% to Rs 3983.32 crore while textile business grew by 7% to Rs 470.23 crore. In the plastic business, building material business de-grew by 7% to Rs 2032 crore while custom molding business grew by 4% to Rs 1937 crore.

The monolithic business catering to the low cost housing segment has seen slower pace of execution with abysmal government activity driven by elections in couple of states resulting in delayed approvals for some sites. Hence delay in these projects have led to fall in margin, increased collection period and working capital requirements. Prefab business did well in FY12.

Custom molding's domestic business growth is attributed to the growing automotive segment and outsourcing for global customer. During to strikes at its customers in Q3, the numbers were impacted or the growth was higher. International business continued to reel under Eurozone recession. The impact has been drastic in 2H FY12. Managemen efforts are on to control costs, curtail capex, leveraging customer relationships globally and improve outsourcing domestically.

The OPM declined by 207 basis points to 16.1% due to increase in employee cost by 119 basis points to 11.49% and other expenditure by 149 basis points to 14.36% of adjusted net sales. The operating profit declined by 12% to Rs 717.7 crore.

Other income increased by 11% to Rs 50.46 crore. The interest cost increased by 25% to Rs 135.83 crore. The depreciation grew by 13% to Rs 167.82 crore. The PBT before Forex has declined by 23% to Rs 464.51 crore. There was forex loss of Rs 46.64 crore As a result, the PBT has decreased by 31% to Rs 417.87 crore.

The total tax outgo has decreased 23% to Rs 115.96 crore. The tax rate stood at 28% compared to 25% of last year. After considering minority interest and share of profit, the net profit decreased by 33% to Rs 306.81 crore.

Consolidated Segment Performance

Plastics

For Q4 FY12, the plastic division contributed 86% of the total revenue. The revenue declined by 33% to Rs 891.81 crore. The PBIT margin has declined by 525 basis points to 12.52%. The PBIT has decreased by 53% to Rs 111.65 crore contributing 81% of total PBIT.

For FY12, the division contributed 88% of the total revenue. The revenue has decreased 2% to Rs 3983.32 crore. The PBIT margin has declined by 238 basis points to 12.96%. PBIT has decreased by 17% to Rs 516.27 crore contributing 93% of total PBIT.

Textiles

For Q4 FY12, the division contributed 13% of the total revenue. The revenue grew 2% to Rs 131.9 crore. The PBIT margin has inclined by 136 basis points to 16.58%. As a result, the PBIT has increased by 11% to Rs 21.86 crore contributing 16% of total PBIT.

For FY12, the division contributed 10% of the total revenue. The revenue increased 7% to Rs 470.23 crore. The PBIT margin has declined by 153 basis points to 12.19%. As a result, the PBIT has declined by 5% to Rs 57.32 crore contributing 10% of total PBIT.

Other Developments

The board of director has recommended dividend of Rs 0.65 per equity share for FY12.

Valuation

The stock was trading at around Rs 57.45 at BSE.

The promoter has pledged 3.64 crore share representing 36.54% of total shareholding of promoter & promoter group and 13.33% of the total share capital of the company.

The promoter holding in the company is at 36.49%.

Sintex Industries: Consolidated Results

Sintex Industries: Consolidated Segment Results