Umang Dairies: Q4FY14 Result Analysis

Umang Dairies, a part of J K Organisation group, yesterday (May 13, 2014) announced its fourth quarter result for the quarter ended 31 March, 2014. The result was announced after market hours. The result shows that the company has posted a good set of financial figures during the said quarter.

The company which is engaged in the business of dairy products posted a topline of Rs 87.13 crore, reporting a jump of around 60% for the quarter ended 31 March, 2014 as compared to the same quarter of previous year. The EBITDA of the company stood at Rs 5.83 crore during Q4FY14, reporting a fall of around 9% on yearly basis, while the net profit of the company jumped by 78% on Y-o-Y basis to Rs 3.57 crore in the last quarter of FY14.

On the margin front, the EBITDA margin of the company has plunged by 440 basis points. This was due to increase in cost of raw material. On yearly basis, the cost of raw material has increased by 390 basis points to 90% as compared to sales during the quarter ended 31 March, 2014. Whereas the net profit margin of the company has improved by 48 basis points to 3.8% on Y-o-Y basis during Q4FY14. The net profit margin improved due to reduction in tax (down by 60%) during the March quarter of FY14 as compared to corresponding quarter of previous year.

On the balance sheet front, the net worth of the company has increased to Rs 24.92 crore from Rs 21.53 crore during FY13. Whereas the total borrowings of the company has increased to Rs 15.44 crore from Rs 7.15 crore during FY13. Looking at the fixed assets, the fixed assets have increased to Rs 28.55 crore from Rs 23.26 crore during the fiscal year 2014. Looking at this, we can say that the company has used funds to purchase fixed assets. The debt-equity ratio of the company stood at 0.62% for FY14, up by around 30 basis points as compared to previous year, whereas it is low if compared to the industry. Looking at the working capital, the current ratio (current assets/current liabilities) of the company has improved to 1.2 times from 1.5 times in the previous year.

The company has recommended a dividend of Re 1 per share for the fiscal year 2014. The stock of the company is trading at a price to earnings (P/E) of 12.48x. Yesterday, the scrip of the company closed at Rs 33.65, low by 1.17% from its previous close. And today the scrip is trading at Rs 38.8 up by 15.13% from its previous close.