Sintex Industries posts weak Q3 numbers; stock dives 7 per cent

Gujarat based plastic and textile major Sintex Industries has announced the financial results for the quarter ended December 31, 2015.

The company has posted an increase in revenue by 11.8 per cent Y-O-Y at Rs 2049.71 crore, versus Rs 1832.86 in the last fiscal. The actual increase in revenue was lower than expected due to low profitability in affordable housing and EPC contracts. Operationally company’s EBITDA rose by 12 per cent on a yearly basis to Rs 343.81 crore from Rs 306.86 crore posted in the corresponding quarter last fiscal. Company's margins turned out flat at 16.7 per cent. Profit after tax increased by 11 per cent Y-O-Y from Rs 162.03 crore to Rs 180.09 crore, primarily owing to lower finance costs, which declined by 11 per cent on a yearly basis from Rs 65 crore to Rs 58 crore analyzed for the quarter ended December 31, 2015.

In nine months ended December 2015, the company’s consolidated revenues and adjusted net profit grew 12 per cent and 15.6 per cent Y-O-Y to  Rs. 5410 crores and  Rs. 400.7 crore respectively.

Business-wise, the custom molding segment witnessed a 1 per cent Y-O-Y drop in revenue to Rs 869 crore in the third quarter. Textiles and building material segments witnessed a healthy growth of 38 per cent and 21 per cent, respectively.

According to the management, company’s key business that is Prefabricated Building Systems; and Domestic Custom Molding segment,  maintained higher momentum. The Custom Molding segment witnessed a robust quarter domestically, driven by  festive  season offerings. Sintex Industries has revised its sales and profit forecast to 15 per cent each from a initial 20 per cent for FY16 on account of substantial fall in the commodity prices.

Executions under CSR for corporates, and clean India initiatives driven by government spending, significantly boosted Prefab revenues by 41 per cent for the quarter under review. Reflecting the festive season and aggressive promotions by automotive manufacturers, the domestic custom molding grew 34 per cent.  The CM revenue on 9MFY16 has grown at 12 per cent. The fabrics business  grew 38 per cent  for  the  quarter  under  review with  launch of innovative designs and varied product mixes.

Rating agency CARE has assigned an upgraded rating to ‘‘CARE AA+’’ from ‘‘CARE AA’’ to the long term bank facilities and non-convertible debentures of Sintex, indicating a high degree of safety regarding timely servicing of its financial obligations.

Reacting to the Q3 results, shares of Sintex Industries were trading down more than 7 per cent to hit an intra-day low of Rs 93.70. Company's stock has largely given flat returns on a yearly basis.

Sintex Industries Limited is engaged in the manufacturing of plastic products; spinning; weaving; and finishing of textiles. The Company's segments include Textile, Plastic and Infrastructure.