Cox & King’s Revenue Grows By 14.13 %

Cox & King (CKL) posted a revenue growth of 14.13 % and reported revenue of Rs 408 crore in Q3FY14 against Rs 357 crore in Q3FY13. More interestingly, the company's total expenses increased by just 2.70 %, much lesser compared to revenue growth. Only employee expenses in the expenses heads showed a rise of 13.49 % on yearly basis. Excluding that, all other expense heads showed considerable negative growth on yearly basis. The exceptional expenses, due to restructuring and realignment of its various subsidiaries, were also down by 10.14 % on yearly basis. The lower expenses translated to higher net earnings and CKL managed to post net profit of Rs 25 crore during the reported quarter against net loss of Rs 6 crore during the same period last year.

The company acquired the balance 26 % in its subsidiary Meininger Holdings GMBH on April 30, 2013. The financials were consolidated line-by-line basis from the date of such acquisition. Hence, the revenue growth seen during the reported quarter clearly exhibits the effect of the acquisition.

However, on profitability front, CKL managed to expand its EBITDA margins by 719 basis points to 35.44 % in Q3FY14 against 28.26 % in Q3FY13. Further, the good performance during the reported quarter helped the company to post net profit margins of 6.01 % during Q3FY14 against loss during the same period last year.

CKL profit during the reported quarter clearly exhibits the successful synergies between CKL and its recently acquired subsidiaries. We expect the good performance to continue in the future also. Hence, we recommend our readers to hold their positions in this stock and wait for more appreciation in the stock in the near future.

The CKL's stock closed up by 5.49 % at Rs 139.40 after the announcement of its quarter result during today's trading session.