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Result Analysis

EID PARRY

EID Parry, which makes farm inputs, sugar, sanitaryware and bio products has put up a very dull performance for 2002-03. Net sales during the reported period were down 11 per cent from the previous year at Rs 1,289.92 crore (Rs 1,449.05 crore),while operational expenditure was brought down by 8 per cent to Rs 1,206.89 crore (Rs 1,314.49 crore). But the decline in revenues being much sharper than the fall in expenditure hit margins badly with operating profits declining by 38 per cent over the previous year to Rs 83.03 crore (Rs 134.56 crore). Operating profit margin too slumped to 6 per cent from the 9 per cent it reported during the year-ago period. Other income was up by a good 55 per cent to Rs 31.84 crore (Rs 20.57 crore), while interest cost was down 38 per cent to Rs 32.82 crore (Rs 52.78 crore). Depreciation during the period under review was up 3 per cent over the previous year to Rs 45.02 crore(Rs 43.69 crore). Even after a prudent management of costs below the operating level its profits before tax were down 37 per cent over the previous year owing to poor sales. Lower before tax profits saw the tax provision move down by 57 per cent to Rs 10.20 crore (Rs 23.83 crore) and net profits slumped by 23 per cent to Rs 26.83 crore against Rs 34.83 crore during the previous year.

HINDUSTAN INKS AND RESINS

Hindustan Inks and Resins, which has a presence in printing inks, synthetic resins, industrial adhesives and wire enamel segments, reported a 12 per cent increase in sales for 2002-03 over the corresponding previous period at Rs 584.49 crore (Rs 521.78 crore), however, rising costs have impacted its overall profitability. The operational costs at Rs 491.44 crore (Rs 416.68 crore) were 18 per cent up from the year-ago period resulting in a 11 per cent decline in the operating profits, which stood at Rs 93.05 crore (Rs 105.10 crore). Operating profit margin too fell from 20 per cent in the previous year to 16 per cent during the year under review. Other income of the company during the period under review has shown a healthy growth at Rs 22.90 crore (Rs 10.14 crore) rising by more than 100 per cent over the previous financial year. Interest at Rs 44.10 crore (Rs 42.21 crore) went up by 4 per cent over the corresponding previous period. Depreciation during the reported period rose by 29 per cent to Rs 16.68 crore (Rs 12.90 crore). With a tax provision of Rs 11.12 crore (Rs 11.82 crore) down 6 per cent from the year-ago period the company reported a net profit of Rs 44.05 crore (Rs 48.31crore) down 9 per cent from the previous fiscal.

APOLLO TYRES

Apollo Tyres has posted a healthy growth for 2002-03. Net sales at Rs 1,608.33 crore (Rs 1,377.30 crore) were up 17 per cent over the year-ago period. Operational costs went up by 13 per cent to Rs 1,400.42 crore (Rs 1,238.69 crore). The lower rise in costs compared with the increase in revenues has improved margins for Apollo. At Rs 207.91 crore (Rs 138.61 crore) the operating profits went up by 50 per cent over the year-ago period, while OPM shot up to 13 per cent from 10 per cent during the previous comparable period. Other income was down 47 per cent over the previous year to Rs 1.39 crore (Rs 2.61 crore). It was more than compensated by a 52 per cent decline in the interest cost, which stood at Rs 26.03 crore (Rs 54.14 crore). Depreciation was up 3 per cent to Rs 33.36 crore (Rs 32.33 crore). Higher operational income and lower interest cost boosted the before tax profits which went up by 174 per cent over the previous year to Rs 149.91 crore (Rs 54.75 crore). The tax provision rose 159 per cent over the previous year to Rs 46.51 crore (Rs 17.94 crore). Net profits were up by a massive 181 per cent over the previous year to Rs 103.40 crore (Rs 36.81 crore). The stock is currently trading at Rs 146. It discounts its full year EPS of Rs 28.47 by just about five times. Looks good at current growth rates.

GODREJ CONSUMER PRODUCTS

Godrej Consumer Products reported a splendid 50 per cent growth in profit after tax mainly on the back of cost management. Its full year sales were up 4 per cent to Rs 476.01 crore (Rs 458.63 crore). Operational costs went up 2 per cent over the corresponding previous period to Rs 395.66 crore (Rs 389.42 crore). OPM rose to 17 per cent from 15 per cent during the year-ago period on the back of rising operating profits to Rs 80.35 crore (Rs 69.21 crore), up 16 per cent. The tax provision declined by 22 per cent to Rs 16.50 crore (Rs 21.25 crore). Thus its net profit was up 50 per cent to Rs 53.56 crore (Rs 35.71 crore) from the previous year. The stock is currently trading at Rs 108 discounting its full year EPS of Rs 9.06 by 12 times. The stock is fully valued.

Company        Total Income       Net profit        Equity       O. Income       EPS*

EID Parrry        1289.92       26.83       17.84       31.84       15.04 Hindustan Inks       584.49       44.05       13.66       22.90       32.25 Apollo Tyres       1608.33       103.40       36.32       1.39       28.47 Godrej Consumer       476.01       53.56       23.64       1.40       9.06

Figures in Rs crore; * annualised.

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