Balkrishna Industries

Q1FY20 OPM shrinks 380 bps

Aug 16, 2019 05:08 IST capital market

Balkrishna Industriesreported 21% drop in net profit at Rs 176.84 crore for thefirst quarter ended June 2019. The company had posted a net profit of Rs 225.13 crore in the corresponding period a year ago. Its total income from operations was down 11% to Rs 1,198.93 crore during the quarter under review as against Rs 1347.56 crore in the same quarter last fiscal.

The company witnessed substantialdrop in margins during the quarter due to rise in employee and other expenses. Bottomline would have slipped further if not for three-fold rise in other income.

Quarterly Performance

The company witnessed drop in the raw material cost(inclusive of purchase of stock in trade)duringfirst quarter ended June 2019. The raw material cost as % of sales net of stock adjustments fell 45bps to 47.1%. The employee cost rose 114 bps at 6.7% in Q1 FY20. Other expenses rose 210 bps to 23.3%. Resultantly, operating margins fell 380 bps to 22.4%. Operating profit rose 24% to Rs 268 crore on a y-o-y basis.

Average natural rubber (NR) prices which is the key input cost rose substantially during the quarter ended June 2019 on a yearly basis. Prices hovered around Rs 126/Kg during Q1FY20 vis a vis Rs 110/Kg a year ago.

With 203% rise in other income to Rs 31.78crore, PBIDTfell 17% to Rs299.8crore. Interest cost fell 42%to Rs 2.05 crore. Depreciation cost increased 1% at Rs 84.74crore. Thus, PBT before forexregistered 23% drop to Rs 213.03 crore. Following a forex gain of Rs 42.12 crore, vs a vis gain of Rs 72.64 crore in previous year, PBT after forex fell 27% to Rs 255.15 crore. After considering 460 bps decrease in the effective tax rate at around 30.69% and 36% dropin tax provision to Rs 78.31 crore, PAT fell 21% at Rs 176.84 crore.

The stocks is currently trading around Rs 735at BSE.

Balkrishna Industries: Consolidated Results

 

1906(3) 1806(3) Var.(%) 1903(12) 1803(12) Var.(%)
Total Operating Income 1198.93 1347.56 -11 5244.50 4464.46 17
OPM(%) 22.4 26.2 25.0 24.8
OP 268.0 352.4 -24 1311.1 1106.7 18
Other Income 31.78 10.48 203 86.18 72.83 18
PBIDT 299.8 362.9 -17 1397.3 1179.5 18
Interest 2.05 3.53 -42 9.79 13.06 -25
PBDT 297.77 359.36 -17 1387.53 1166.45 19
Depreciation 84.74 84.11 1 332.55 311.34 7
PBT Before forex 213.03 275.25 -23 1054.98 855.11 23
Forex gain/loss 42.12 72.64 -42 128.03 263.38 -51
PBT after forex 255.15 347.89 -27 1183.01 1118.49 6
Tax provision^ 78.31 122.76 -36 401.01 379.24 6
PAT 176.84 225.13 -21 782 739.25 6
Other comprehensive income
Share of profit/loss of associates
Net Profit 782 739.25 6
EPS* 36.6 46.6 40.5 38.2
* EPS Is On Current Equity Capital Of Rs 38.66 Crore Face Value Of Rs 2
# EPS Not Calculated As It Is A Seasonal Business
Figures In Rs Crore
LP: Loss To Profit PL: Profit To Loss
EO: Extraordinary Items
EPS Is Calculated After Excluding EO And Relevant Tax
Source: Capitaline Corporate Database

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