Sintex Industries Consolidated Net Profit Jumps By 58%

One of India's leading companies in plastic business, Sintex Industries, has posted a mixed set of numbers for its Q3FY14. Although, topline of the company declined by 3% on yearly basis, EBIDTA and profit after tax numbers witnessed an improvement in the same period and rose by 10.3% and 58% respectively.

For Q3FY14, Sintex Industries posted sales of Rs 1376.13 crore against Rs 1420.31 crore recorded in the same period last year. The company operates primarily in two divisions namely plastic and textile contributing 89% and 11% respectively of total sales. It was the subdued performance from the plastic segment, which saw its sales declining by 5.8% on yearly basis to Rs 1235 crore, led to the decline in overall sales of the company. Even in plastic segment it is monolithic division that has pulled down the segment sales. Monolithic division has recorded sales of Rs 195 crore for the quarter against Rs 333.5 crore in the same quarter last year. Textile segment witnessed sales growth by one third on yearly basis and was Rs 152.47 crore for the quarter ended December 2013. 

Despite a drop in overall sales company was able to post growth at EBITDA level. EBIDTA of the Sintex Industries has increased by 9.6% on yearly basis to Rs 24.48 crore for Q3FY14. Even the EBITDA margin of the company has increased by 20 basis points in the same period. The reason for such improvement at EBITDA level was due to better cost control which led to decline in the total expenditure by 4.5% on yearly basis and stood at Rs 1203 crore. Other expenses, which forms part of total expenditure fell by 13% on yearly basis and came at Rs 183.41 crore for the quarter. 

Better cost control has helped company to post jump in its net profit by 58% on yearly basis. Net profit for Q3FY14 came at Rs 84.71 crore for the company despite increase in finance cost and expenses. Interest cost and finance expenses have increased by 41.5% and 27.5% on yearly basis to Rs 44 crore and Rs 53.5 crore respectively. 

The net earnings per share of the company came at Rs 11.65 for trailing twelve months and discounts the current share price by 3 times. Looking at the improving conditions of the company, one can remain invested in the stock, while fresh purchase can only be made looking at how company post results in the next quarter.