Rain Industries reported 34% yoy growth in revenue to Rs3,306cr in Q1CY18 vs. Rs2,468cr in Q1CY17. EBITDA grew by 45.2% yoy to Rs641cr vs. Rs441cr in Q1CY17. EBITDA margins were at 19.4% in Q1CY18 vs. 17.9% in Q1CY17. Reported net profit grew by 324.2% yoy in Q1CY18 to Rs251cr vs. Rs59cr in Q1CY17. However, there were exceptional items pertaining to unamortised deferred financing cost and redemption premium totalling to Rs67cr that was charged in Q1FY17. Adjusting for this, the yoy growth was 141.2%.
Revenue growth was aided by 52.6% yoy growth in carbon products revenue. Carbon products grew mainly on account of 56.7% yoy jump in blended realisations. Advanced materials revenue was flattish, up 1% yoy, as 7% yoy increase in blended realisations made up for volume declines. Cement was down 9.3% yoy on sharp drop in realisation of ~13%.
Within carbon products, Calcined Petroleum Coke (CPC) revenue increased by 46% yoy. Volumes declined by 5.4% yoy but realisations increased by 54.2% yoy. Prolonged negotiations with customers due to higher import duties enacted from January 5, 2018 in India resulted in lower volumes of CPC during Q1CY18.
Coal Tar Pitch (CTP) revenue was up 119% yoy. Volumes grew by 4.7% yoy, while realisations increased by 109.1% yoy. Volumes were up on increase in demand and capacity utilization.
Energy revenues grew by 12.8% yoy.
Advanced Materials sales volume declined by 4.3% yoy owing to decrease in sales volumes by 13.3% yoy & 7.1% yoy in Engineered Products and Petro Chemical Intermediates respectively. Sales volumes remained flat for Naphthalene Derivates and Resins. Average blended realization increased by 5.6% yoy along with the favourable impact from the appreciation of the Euro against the Indian Rupee by 10.7% yoy.
Cement volumes were up 4.3% yoy. Andhra Pradesh, Telangana, Kerala and Odisha volumes were up 10.5% yoy, while Tamil Nadu, Karnataka, Maharashtra, Goa and Pondicherry volumes were down 6.2% yoy.
Overall EBITDA margin expansion of 150bps yoy was on account of better product business and operating leverage. Adjusted EBITDA margin in the Carbon Products segment expanded by 580bps yoy to 24.3% on higher realisations.
Adjusted EBITDA margin in the Advanced Materials segment contracted by 810bps yoy on higher RM cost (currency impact).
Adjusted EBITDA margin from the Cement segment expanded by 330bps yoy increased volumes and savings in operating cost.
Rain Industries Ltd is currently trading at Rs. 271, down by 56.65 points or 17.29% from its previous closing of Rs. 327.65 on the BSE.
The scrip opened at Rs. 330.90 and has touched a high and low of Rs. 332.75 and Rs. 270 respectively. So far 1,20,05,036 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 100 DMA.
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