Net sale for the quarter March 07 increased by 9% to Rs 122.92 crore, but 70% increase in depreciation and 24% increase in total tax had brought down PAT by 19% to Rs 21.41 crore.

Net sales for the nine months ended March 07 decreased by 9% to Rs 413.99 crore. PPA of Rs 10.72 crore had brought down the PAT by 17% to Rs 77.17 crore.

Quarter ended March 07 performance

Net sales of the company increased by 9% to Rs 122.92 crore. Feminine Hygiene business sales grow at Rs 71.3 crore posted a very strong 20% growth. The Healthcare business at Rs 51.1 crore, is lower during the quarter.

OPM improved by 310 bps to 26.7%, this is mainly due to the significant decrease in the other expenditure by 850 bps to 22%. In absolute terms, however raw material consumed increased significantly by 350 bps to 28%. The operating profits improved by 23% to Rs 32.88 crore.

Other income recorded a 70% fall to Rs 3.41 crore. The company is debt free. Depreciation increased by 70% to Rs 2.75 crore leading to decrease at PBT level by 8% to Rs 33.58 crore. Total tax outgo during the quarter witnessed 24% incline to Rs 12.71 crore, therefore resultant net profits declined by 19% to Rs 21.41 crore. There is a no prior period adjustment.

Nine months ended March 07 performance

The net revenue declined by 9% and stood at Rs 413.99 crore. In the nine months period ended March 07, sales at Rs 413.99 crore grew by 15%, excluding the manufacturing business sales. This growth is driven by 22% growth in Feminine Hygiene sales and 8% in Healthcare. However the operating profit margins improved by 610 bps to 29.1%, due to raw material cost declined by 820 bps to 27% and other expenditure declined by 80 bps to 22%. Advertising expenses increased by 200 bps to 11% and staff cost increased by 100 bps to 7%.

The other income has decreased by 49% to Rs 10.79 crore. Interest has declined significantly by 91% to Rs 0.01 crore. Depreciation increased by 14% to Rs 6.56 crore. The resultant PBT is Rs 124.52 crore which is higher by 4%. There was no EO for nine month ended quarter, as a result PAT after EO declined by 2% to Rs 124.52 crore. Total tax outgo increased by 7% at Rs 36.63 crore. PAT before PPA is at Rs 66.47 crore, a decline of 5%. PPA stood at Rs 10.72 crore which brought PAT down by 17% at Rs 77.17 crore.

Performance for the Year ended June 06

For the year ended June 06, the net sales of PGHHCL fell by 17% to Rs 566.73 crore mainly due to divestment of the detergent contract manufacturing business in the first quarter of the fiscal. In the period under review, the core health & hygiene business grew 18% to Rs 473.67 crore. The full year sales growth in Core businesses came from the 23% increase in Feminine Hygiene business at Rs 228.96 crore and 17% growth in Healthcare business at Rs 243.59 crore.

OPM improved by 340 bps to 22.9% leading to the fall in operating profits being restricted to just 3% at Rs 129.76 crore. Other income grew 24% to Rs 19.92 crore. The Interest costs witnessed 120% rise to Rs 0.11 crore but nevertheless the depreciation cost was low by 36% to Rs 7.92 crore for the period. This restricted the PBT to post a growth of 3% to Rs 141.65 crore. The core business contributed around 97%, showing a 16% increase to Rs 163.51 crore.

There was an EO income of Rs 51.69 crore in the period under review, which includes profit on sale of property of Rs 2.61 crore and profit on sale of detergent manufacturing business to Procter and Gamble Home Products Limited of Rs 4.72 crore. Also there was Rs 44.36 crore write-back of liability as against Rs 30.55 crore in the corresponding previous year. Total tax outgo increased marginally by 1% to Rs 53.83 crore leading to a higher growth of 12% in net profits to Rs 139.51crore.

During the quarter, the company has commenced production and dispatches from its new location at Baddi.

Financial results for the nine months ended March 07 are not strictly comparable as the corresponding period ended March 06 included sales and expenditure of detergent business which was transferred effective October 05 to Procter & Gamble Home Products Limited, a 100% subsidiary of The Procter & Gamble Company USA. Accordingly effective October 05, the company operates only in one reportable segment – business of manufacturing and marketing Health and Hygiene Products and in one geographical segment i.e. within India.

The scrip is trading at Rs 774.