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Result Analysis

THERMAX

For the first quarter ended June, 2003 Thermax Ltd has reported a good growth in profits due to cost cutting and better treasury operations. Net sales at Rs 83.97 crore (Rs 102.96 crore) was down 18 per cent from the corresponding previous period. But low operational cost at Rs 80.57 crore (Rs 99.65 crore) improved the company’s margins. At Rs 3.40 crore (Rs 3.31 crore) its operating profit was up 3 per cent from the year-ago period. Despite the tax provision having gone up by a huge 181 per cent to Rs 1.18 crore (Rs 0.42 crore) the lower interest and depreciation provisioning in combination with a good rise in other income has enabled it to report a profit (excluding extraordinaries) of Rs 7.15 crore (Rs 4.15 crore) up by a reasonably sound 72 per cent over the comparable quarter last year. The stock trades at Rs.244.35 discounting its June quarter annualized EPS of Rs.12.00 by 20 times. It is not cheap given the fact that much of the growth is outside the core area of the company’s activity.

ADLABS FILMS

Adlabs Films, which has a presence in film processing in addition to its new multiplex venture, has reported a rather dull June quarter. Net sales was down 15 per cent from the year-ago period at Rs 18.09 crore (Rs 21.17 crore) and operational cost was also down by 12 per cent at Rs 11.34 crore (Rs 12.82 crore). Operating profit was down 19 per cent at Rs 6.75 crore (Rs 8.35 crore). Lower profit before tax have seen the tax provision come down by 15 per cent to Rs 2.06 crore (Rs 2.41 crore). Due to poor top-line show net profit dip by 31 per cent to Rs 3.80 crore (Rs 5.49 crore). The stock currently trading at Rs 54.95 discounts its June quarter annualised EPS of Rs 7.07 crore by eight times.

NESTLE INDIA

Nestle has reported a 7 per cent rise in net sales at Rs 546.07 crore as against Rs 511.48 crore for the first quarter ended June, 2003. Operating expenditure was up by 6 per cent at Rs 429.28 crore (Rs 405.32 crore). Operating profit was up 10 per cent YoY at Rs 116.79 crore (Rs 106.16 crore). Tax provision was up 10 per cent at Rs 35.81 crore (Rs 32.60 crore). Net profit before extraordinaries and prior period adjustments was up 11 per cent over the corresponding period at Rs 75.25 crore (Rs 67.86 crore). During the quarter, the company reported a 13 per cent decline in extraordinary adjustments, which has seen the actual net profit, after such adjustments, move up by 15 per cent from last year. The stock currently trading at Rs 569.40 discounts its June quarter annualised EPS of Rs 31.22 by 18 times.

NIRMA

Nirma Ltd has perked up its first quarter performance with the help of other income and a huge reduction in interest cost. Net sales was up by only 3 per cent over the corresponding period at Rs 572.03 crore (Rs 552.82 crore). Operational cost went up by 5 per cent to Rs 444.97 crore (Rs 425.19 crore). Operating profit was down marginally at Rs 127.06 crore (Rs 127.63 crore). Other income was up by a good 55 per cent at Rs 4.29 crore (Rs 2.77 crore), while further consolidation came through a 58 per cent fall in interest cost which stood at Rs 7.94 crore (Rs 18.95 crore). Lower interest cost and higher other income saw profit before tax move up by 12 per cent to Rs 92.29 crore (Rs 82.31 crore). Net profit at Rs 60 crore (Rs 46.02 crore) was up 30 per cent from the corresponding previous period. The stock currently trading at Rs 335 discounts its June quarter annualised EPS of Rs 30.23 by 11 times.

Company        Total Income       Net profit        Equity       O. Income       EPS*

Thermax                83.97                  7.15             23.83             7.28           12.00
Adlabs Films        18.09                  3.80             10.75             0.40             7.07
Nestle India        546.07                66.97             96.42            6.47           31.22 Nirma                   572.03                59.98             79.38            4.29           30.23

Figures in Rs crore; * annualised

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