Grindwell Norton Ltd's Q2FY19 consolidated net profit rises 12.98% yoy to Rs40.66cr : Misses Estimates

The company’s consolidated revenue stood at Rs416.80cr, up 21.02% yoy and 9.4% qoq.

Nov 01, 2018 08:11 IST India Infoline Research Team

Grindwell Norton Ltd Q2FY19

Consolidated Results Q2FY19: (Rs. in cr)

Q2FY19 YoY (%)
Revenue 416.80 21.0
EBITDA 70.77 22.2
EBITDA Margin (%) 17 17
Net Profit (adjusted) 40.66 13.0
***EBITDA margin change is bps
Grindwell Norton’s September quarter numbers were below consensus estimates. Revenue increased by 21% yoy to Rs416.8cr in Q2FY19 vs. Rs344.4cr in Q2FY18, beating the estimates by 6%. EBITDA witnessed a strong growth of 22.2% yoy to Rs70.8cr for the current quarter, however missed the estimates by 6%. EBITDA margin expanded by a tad 17bps yoy to 17% from 16.8% in Q2FY18. Net profit increase by 13% yoy to Rs40.7cr as compared to Rs36cr for the same quarter last year, missing the street estimates by 11%.
  • Top-line growth was driven by secular performance across the segments – Abrasives (61% of sales), Ceramics & Plastics (31% of sales) and Others (8% of sales).
  • Abrasives for the quarter registered a healthy growth of 21.3% yoy to Rs258.5cr, while EBIT grew by 17% yoy to Rs34.9cr. EBIT remained healthy at 13.5%.
  • Ceramics & Plastics witnessed a strong growth of 23.6% yoy to Rs129.1cr for the current quarter. EBIT increased by 25.1% yoy to Rs18cr, while margin stood firm at 14%.
  • Others category grew by 15.7% yoy to Rs35.6cr in Q2FY19 vs. Rs30.7cr in Q2FY18. EBIT for the segment jumped 54.5% yoy to Rs7.6cr while margin swelled 543bps to 21.3% for the quarter.
  • Sharp rise in raw material costs (up 41.5% yoy to Rs161.5cr) restricted expansion in EBITDA margin for the consolidated entity.
  • Net profit growth for the September quarter came on the back of higher sales, however partially offset by fall in other income (down 36.8% yoy to Rs4.9cr).

Technical View:

Grindwell Norton Ltd is currently trading at Rs. 494, down by 1 points or 0.2% from its previous closing of Rs. 495 on the BSE.
The scrip opened at Rs. 495.05 and has touched a high and low of Rs. 495.05 and Rs. 494 respectively. So far 8,353 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 200 DMA.

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