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MPS posted the sharp 273% jump in net profit despite the moderate 5% growth in sales on the back of excellent operating performance during the quarter. However, the Company consolidated net sales grew by moderate 5% YoY in Q2'FY'13 to Rs 41.73 crore. Notably, margins spurted by 1230 bps YoY to 26.8% and accordingly operating profit jumped by 94% YoY to Rs 11.20 crore. Further, the lower interest cost and depreciation during the quarter coupled with lower provision for taxation led to sharp 273% jump in net profit to Rs 10.26 crore.
Quarterly Performance:
Net Sales grew by moderate 5% YoY to Rs 41.73 crore for the quarter ended September 2012. However, OPM expanded by 1230 bps YoY to 26.8% on the back of sharp fall in staff cost (790 bps YoY), other expenses (420 bps YoY) coupled with marginal decline in consumption cost (10 bps) as percentage to sales and net of stock adjustments. After the 87% growth in other income to Rs 1.01 crore, PBIDT jump by 94% YoY to Rs 12.21 crore. Further, with decline in interest cost by 29% YoY to Rs 0.15 crore and depreciation by 18% YoY to Rs 1.73 crore, PBT jump by 160% YoY to Rs 10.33 crore. After accounting to lower provision for taxation (Rs 0.07 crore vis-à-vis Rs 1.23 crore) during the quarter, net profit growth further boosted to 273% YoY to Rs 10.26 crore.
Half-Yearly Performance:
Net Sales grew by moderate 4% YoY to Rs 80.38 crore for the half-year ended September 2012. Notably, margins expanded by sharp 1230 bps YoY to 23.1% and after this operating profit jump by 123% YoY to Rs 18.58 crore. But after 4% decline in other income to Rs 2.01 crore, PBIDT grew by 97% YoY to Rs 20.59 crore. However, the 44% fall in interest cost to Rs 0.35 crore and 18% decline in depreciation to Rs 3.38 crore, PBT jump by 197% YoY to Rs 16.86 crore. Further, after whopping fall in effective tax rate by 1370 bps YoY to 11.4%, net profit grew by 251% YoY to Rs 14.93 crore.
Other Information:
- It has received orders from service tax authorities disallowing input credit of service tax credit of service to Rs 6.88 crore for the period June 2006- December 2010 and has filed appeals against such orders. Based on legal opinion, the Company is of the view that the disallowance is not sustainable. Further, it has filed appeals against the service tax demand of 0.72 crore on overseas commission for the period from 18th April 2006 to 31 December 2006. Based on legal opinion, it is of the view that in the event of the demand being upheld by the Appellate Authority, the Company being an exporter of services is eligible to avail the tax as input credit.
- The Company has declared an interim dividend of 50% for the shareholders and the record date for this purpose would be 22nd November 2012.
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