Nilkamal Q3 profits soar 139 per cent: stock witnesses profit booking

Industry leader in moulded furniture; and material handling products company Nilkamal Limited announced its Q3FY16 numbers after market closing hours on Monday. Company showed a sustained upward growth momentum as profits rose by 139 per cent on a yearly basis.

Total revenue for the quarter ended December increased marginally by 1 per cent Y-O-Y (year on year) to Rs 428.42 crore compared to Rs 422.64 crore in the same quarter of the previous fiscal. The revenue growth was subdued due to an overall weak demand environment; and poor rural demand for its furniture products. On an operational front company performed on expected lines as EBITDA (Earnings Before Interest, Depreciation and Amortization) grew by a strong 49 per cent to Rs 46.46 crore in comparison with Rs 31.13 crore attained in the corresponding quarter of the last fiscal. Operationally the numbers were strong due to cost benefits enjoyed by the company as prices of key raw material saw a decline of more than 700 basis points on a yearly basis. Nilkamal’s margins also expanded for the quarter in review, by 400 basis points, primarily due to softening of raw material prices, eventually bringing the cost down and increasing the operational profit margin. Profit After Tax (PAT) also increased by 139 per cent Y-O-Y to Rs 20.19 crore from Rs 8.46 crore achieved in the last fiscal.

Sequentially company faced pressure as sales revenue declined by 11 per cent. EBITDA dipped by 8 per cent Q-O-Q (quarter on quarter). Whereas, PAT dropped by 22 per cent.

The company’s net income for the 9MFY16 grew by 5.48 per cent to Rs 1367.48 crore from Rs 1296.39 crore; whereas EBITDA grew by 65.20 per cent to Rs 155.05 crore from Rs 93.86 crore. PAT achieved for 9MFY16 was Rs 71.24 crore up from Rs 20.78 crore, a jump of 243 per cent.

Further, the company’s retail business recorded a growth of 13 per cent in turnover on a yearly basis. Company’s product offering through e-commerce channel also jumped by three times on a Y-O-Y basis. Going forward company looks to direct its efforts towards e-commerce for tapping future profits.

Reacting to the good numbers, company’s scrip came under heavy profit booking as the stock was down 4 per cent to Rs 1283.25 in early hours of trade. The stock has come under profit booking pressure as the stock has been on an upswing for the past one year with returns in excess of 185 per cent.