3M India profit jumps three fold to Rs 56.61 crore

3M India, a maker of adhesives, car polishes and the ubiquitous Stick-Ons, is locked in upper circuit of 20 per cent in early trade after the company’s net profit jumped three fold in December quarter 2015.

The company’s net profit grew by 240 per cent to Rs 56.61 crore in Q3FY16 as against Rs 16.65 crore in Q3FY15 owing to strong operational income.

Operating income of the company grew by 16.9 per cent to Rs 517.5 crore as against Rs 442.7 crore in the corresponding quarter of previous fiscal.

Operating profit (EBITDA) grew by 156.3 per cent to Rs 90.53 crore along with EBITDA margin, which expanded by 190 bps Q-o-Q to 17.5 per cent in Q3FY16 against 15.6 per cent in Q2FY16 and 7.9 per cent in Q3FY15.

Industrial and Safety & Graphics are two heavy weighted segments which contribute around 42.41 and 25.25 per cent respectively towards the total income. These two segments' revenue grew by 15.7 and 19.3 per cent respectively. EBIT (Earnings Before Interest and Taxes) level of the Industrial segment grew by 129 per cent to Rs 38.67 crore (accounted 49.3 per cent of total EBIT); and Safety & Graphics reported EBIT level of Rs 10.41 crore as against loss of Rs 0.13 crore in the corresponding quarter of the previous year.

For the first nine months of FY16, the company’s net profit grew by 113.64 per cent to Rs 142.5 crore as against Rs 66.7 crore in the same period last fiscal. Total income grew by 13.8 per cent to Rs 1,550.9 per cent as against 1,362.9 crore in the same period of the previous year. Operating income grew by 81.8 per cent to Rs 242.52 crore along with EBITDA margin, which expanded by 584 bps to 15.64 per cent.

Parent 3M owns 75 per cent stake in 3M India. On valuation front, the stock is currently available at 71.82 times of price to earnings ratio with an earning of Rs 163 per share on TTM basis.