Capitaline

Results 22-Oct-21

Analysis

Huhtamaki India

Higher raw material prices impacted profitability

Huhtamaki India net sales declined 2.50% to Rs 668.73 crore in Q3CY21 compared to Q3CY20. Operating profit margin has declined from 11.29% to 4.68%, leading to 59.60% decline in operating profit to Rs 31.28 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 64.33% to 71.09%. Employee cost decreased from 10.60% to 9.34%. Other expenses rose from 13.53% to 14.73%.

Other income fell 64.93% to Rs 1.01 crore. PBIDT fell 59.79% to Rs 32.29 crore. Provision for interest up 13.31% to Rs 6.98 crore. PBDT fell 65.87% to Rs 25.31 crore. Provision for depreciation down 6.11% to Rs 23.04 crore.

Profit before EO was down 95.42% to Rs 2.27 crore. The company reported an EO expense of Rs 30.98 crore compared to nil in the corresponding previous year period. PBT after EO reported loss of Rs 28.71 crore compared to profit of Rs 49.61 crore.

The company had announced a voluntary retirement scheme (VRS) on July 20, 2021 for its eligible employees at the Thane plant. The scheme was open till July 22, 2021. In response to the scheme, 102 employees opted for the VRS which involved a pay-out cost of Rs 30.98 crore. The results for the quarter and nine month ended September 30, 2021 include the impact of the VRS scheme and same has been disclosed as "Exceptional Item".

Provision for tax was credit of Rs 6.87 crore, compared to debit of Rs 12.73 crore. Net profit was loss of Rs 21.84 crore compared to profit of Rs 36.88 crore. Profitability for the quarter was mainly impacted by the unprecedented increase in raw material prices

Promoters’ stake was 67.73% as of 30 September 2021 compared to 66.94% as of 30 September 2020 .

Performance for nine months year ended Sep’21

Net sales of Huhtamaki India declined 0.85% to Rs 1,904.99 crore. Operating profit margin has declined from 10.4% to 4.9%, leading to 51% decline in operating profit to Rs 96.29 crore.

Other income rose 82% to Rs 9.57 crore. PBIDT fell 48% to Rs 105.86 crore. Provision for interest fell 4% to Rs 18.7 crore. PBDT fell 53% to Rs 87.09 crore. Provision for depreciation fell 6% to Rs 69.57 crore.

Profit before EO was down 84% to Rs 17.52 crore. The company reported an EO expense of Rs 30.98 crore compared to nil in the corresponding previous year period. PBT after EO reported loss of Rs 13.46 crore compared to profit of Rs 109.83 crore

Provision for tax fell 82% to Rs 5.04 crore. Net profit was loss of Rs 9.17 crore compared to profit of Rs 90.91 crore

Performance for year ended Dec’20

For year ended Dec’20, net sales fell 5% to Rs 2462.7 crore. The company operating margins decreased 180 bps to 9.5%. As a result operating profits fell 20% to Rs 233.62 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 66.48% to 65.62%. Employee cost increased from 9.69% to 11.16%. Other expenses rose from 12.55% to 13.77%

Other income fell 52% to Rs 8.02 crore. Interest cost fell 16% to Rs 26.12 crore. Loan funds rose to Rs 292.85 crore as of 31 December 2020 from Rs 268.84 crore as of 31 December 2019. Inventories rose to Rs 228.78 crore as of 31 December 2020 from Rs 181.86 crore as of 31 December 2019. Sundry debtors were lower at Rs 533.80 crore as of 31 December 2020 compared to Rs 618.47 crore as of 31 December 2019. Cash and bank balance rose to Rs 67.11 crore as of 31 December 2020 from Rs 44.61 crore as of 31 December 2019. Investments declined from Rs 60.81 crore as of 31 December 2019 to Rs 18.35 crore as of 31 December 2020.

Depreciation rose 13% to Rs 97.93 crore. Fixed assets increased to Rs 501.01 crore as of 31 December 2020 from Rs 422.13 crore as of 31 December 2019. Intangible assets increased from Rs 72.61 crore to Rs 76.14 crore.

PBT was down 39% to Rs 117.59 crore. The company had nil EO items during the quarter compared to EO income of Rs 10 crore in CY19 pertaining interest cost reversal towards written back income tax. PBT after EO fell 42% to Rs 117.59 crore.

Tax provision decreased 51% to Rs 30.95 crore. PAT reported was down 37% to Rs 86.64 crore. Tax reversal for earlier period was Rs 9.35 crore compared to Rs 31.99 crore in the corresponding previous year period. Net profit fell 44% to Rs 95.99 crore.

Equity capital stood at Rs 15.11 crore as of 30 June 2021 to Rs 15.11 crore as of 30 June 2020. Per share face Value remained same at Rs 2.00.

Promoters’ stake was 66.94% as of 31 December 2020 ,compared to 66.94% as of 31 December 2019 .

Cash flow from operating activities decreased to Rs 169.34 crore for year ended December 2020 from Rs 284.52 crore for year ended December 2019. Cash flow used in acquiring fixed assets during the year ended December 2020 stood at Rs 48.86 crore, compared to Rs 67.57 crore during the year ended December 2019.

The scrip is currently trading at Rs 259

Huhtamaki India: Results
	2109 (03)	2009 (03)	Var.(%)	2109 (09)	2009 (09)	Var.(%)	2012 (12)	1912 (12)	Var.(%)
Total Operating Income	668.73	685.90	-3	1963.71	1904.99	3	2462.70	2598.98	-5
OPM(%)	4.7%	11.3%		4.9%	10.4%		9.5%	11.3%
OP	31.28	77.43	-60	96.29	198.13	-51	233.62	292.90	-20
Other Income	1.01	2.88	-65	9.57	5.27	82	8.02	16.74	-52
PBIDT	32.29	80.31	-60	105.86	203.40	-48	241.64	309.64	-22
Interest	6.98	6.16	13	18.77	19.48	-4	26.12	31.13	-16
PBDT	25.31	74.15	-66	87.09	183.92	-53	215.52	278.51	-23
Depreciation	23.04	24.54	-6	69.57	74.09	-6	97.93	86.93	13
PBT Before EO	2.27	49.61	-95	17.52	109.83	-84	117.59	191.58	-39
EO	-30.98	0.00		-30.98	0.00		0.00	-10.00
PBT after EO	-28.71	49.61	PL	-13.46	109.83	PL	117.59	201.58	-42
Tax provision	-6.87	12.73	LP	5.04	28.27	-82	30.95	63.53	-51
PAT	-21.84	36.88	PL	-18.50	81.56	PL	86.64	138.05	-37
PPA	0.00	0.00		-9.33	-9.35	0	-9.35	-31.99
PAT after PPA	-21.84	36.88	PL	-9.17	90.91	PL	95.99	170.04	-44
EPS*	#	#		#	#		11.5	17.4
* Annualized On Current Equity Of Rs 15.11 Crore of face value of Rs 2 each
EO: Extraordinary Items, PL: Profit to Loss
EPS Is Calculated After Excluding EO And Relevant Tax
# EPS not annualised due to seasonality of business
Figures In Rs Crore
Source: Capitaline Database

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