Sutlej Textiles and Industries: Q4FY14 Result Analysis
Waseem Ahmad / 22 May 2014
Sutlej Textiles and Industries announced its quarterly results for the period ended 31 March, 2014. The company is India’s largest Sun dyed yarn manufacturer and a leading player in speciality yarn. We give you the financial highlights of the performance.
Sutlej’s revenues went up significantly from Rs. 1680 crore in Mar’13 to Rs. 1881 crore in Mar’14. EBITDA of the company rose to Rs. 306 crore (up by 14%) in Mar’14 from Rs. 234 crore in Mar’14 on basis of strong operational performance and the off take of high margin products and improved realisation per ton of sales. EBITDA margin improved because of prudent raw material and cost management policies.
The company’s focus is on increasing its inventory which can be inferred from its increase in stock purchases which went up from Rs. 112 crore to Rs. 160.4 crore on a yearly basis.
The profit after tax, although increased in absolute terms from Rs. 77 crore to Rs. 131 crore on yearly basis but the PAT margin was up from 5% (Mar’13) to 7% (Mar’14) mainly due to increase in purchase of stock in trade and increase in employee expenses. PAT improved as a result of higher EBITDA margin and finance cost as it dropped from Rs. 65.31 crore in Mar’13 to Rs. 58.07 crore in Mar'14.
On the EPS front, it was a substantial increase from Rs. 47 per share to Rs. 80 per share for the year ended 31 March, 2014. The company has been maintaining a good dividend payout policy and has announced 80% (Rs. 8) dividend for this quarter on a face value of Rs. 10.
Coming to the segment wise performance, the revenue from sale of Yarns was Rs. 1786 crore in Mar’14, up from Rs. 1581 crore in Mar’13. The sales revenue from the sale of fabrics was Rs. 61 crore.
The company has capex plans of Rs. 175 crore which it intends to fund through internal accruals. The company is highly leveraged with a debt to equity ratio of 0.6x which allows it to remain highly liquid. However, due to only 4500 shareholders in the books of the company, the liquidity in trading of shares is a problem on the exchange. So, the management has assured in an analyst meet that it will take necessary measures to boost liquidity in trading of shares on the exchange.
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