GHCL Ltd's Q2FY19 standalone net profit soars 47.1% yoy to Rs78.4cr: Beats Estimates

The company’s standalone revenue stood at Rs835.4cr, up 17% yoy and 10.7% qoq.

Oct 31, 2018 03:10 IST India Infoline Research Team


Standalone Results Q2FY19: (Rs. in cr)

Q2FY19 YoY (%)
Revenue 835.40 17
EBITDA 175.20 28.8
EBITDA Margin (%) 21 192
Net Profit (adjusted) 78.41 47.1
***EBITDA margin change in bps
GHCL Ltd's Q2FY19 revenue came in at Rs835.4cr, up 17% yoy. The operating profit increased significantly by 29% yoy to Rs175.2cr in Q2FY19. The EBITDA margin expanded ~192bps yoy to 21% in the quarter. The adjusted net profit of the company for Q2FY19 stood at Rs78.4cr, an increase of 47.1% yoy. The performance of the company beat estimates on all fronts, with revenue, EBITDA, and PAT ahead of expectations by 13%, 18% and 33%, respectively.

• Traction in the total revenue for the quarter is due to high volumes under inorganic chemicals as well as the revival of the textile segment, which is likely to witness higher realizations.
• Gross margin expanded ~232bps yoy to 57% during Q2FY19, majorly driven by a recovery in the textile segment. GHCL’s textile segment is also a net beneficiary due to the existing rupee depreciatiation scenario as it has a subsidiary in USA engaged in home textiles.
• EBITDA margin expanded by ~192bps yoy to 21% during Q2FY19 due to the above mentioned factors. This is despite the sharp increase in power and fuel costs by 37% yoy to ~Rs124.2cr in Q2FY19.
• Inorganic Chemicals – Segmental revenue increased 20.2% yoy to Rs532.8cr mainly driven by higher volumes with flattish realizations. The EBIT grew 8.7% yoy to Rs132cr during Q2FY19. However, the EBIT margin declined by ~262bps on account of likely pressure in input costs and a weak rupee. The volumes of the company remained in-line with high demand for inorganic chemicals across the industry.
• Home Textiles – Segmental revenue increased 11.7% yoy to Rs302.6cr on the back of improvement in the realization level during the quarter as evident in the segmental EBIT margin. The segmental EBIT stood at Rs19.4cr during Q2FY19 vs. a loss of Rs6cr during Q2FY18, which portrays a significant turnaround for the company. The segmental EBIT margin came in at 6.4% in Q2FY19.
• The total debt (long and short-term) declined marginally to Rs1,103cr as on September 30, 2018, vs. Rs1,144cr as on March 31, 2018.

Technical View:

GHCL Ltd is currently trading at Rs. 228, up by 20.85 points or 10.07% from its previous closing of Rs. 207.15 on the BSE.
The scrip opened at Rs. 209.40 and has touched a high and low of Rs. 230 and Rs. 209.40 respectively. So far 5,45,491 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 200 DMA.

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