For quarter ended Sept 2013, WPL's OPM declined 238 bps to 5.1% primarily due to a 13% increase in Purchase of stock in trade to Rs.108.83 compared to Rs.96.32 crore in the corresponding previous quarter. Also the Purchase of stock in trade has increased 204 bps to 15.4% of the Net sales compared to 13.3% in the corresponding previous quarter. Cost of raw material consumed (RM) came in at 49.9% of the Net Sales, a decrease of 138 bps compared to corresponding previous quarter. Staff costs increased 97 bps to 9.2% of the Net Sales compared to 8.2% recorded in the corresponding previous quarter. Other expenses, which includes expenses such as Freight, Cartage and Octroi, Power & Fuel and Service Contract and Workshop expenses, came in at 21.4% of the Net sales, an increase of 49 bps compared to corresponding previous quarter. Decline in Operating Margins and lower Net sales led to a 34% fall in the Operating profit to Rs.31.61 crore.

Interest cost, which is a nominal component of WPL's expenses, came in at Rs.0.26 crores, down 53% compared to Rs.0.55 crores in the corresponding previous quarter. Tax expense declined 42% to Rs.5.97 crore compared to Rs.10.21 crore in the corresponding previous quarter. Net profit came in at Rs.16.54 crore, which was down a steep 42% compared to corresponding previous quarter due to weak margins, lower Net Sales and lower Other Income.

Financial Performance for the six-month period ended September 30, 2013

For the six-month period ended September 30, 2013, WPL reported a Total Operating Income of Rs.1495.54 crores, a decline of 2%. Operating margin declined 213 bps YoY to 7.6% due to a huge 368 bps increase in Purchase of stock in trade to 15.4% of the Net sales. Also, in absolute terms Purchase of stock in trade increased 25% to Rs.241.59 and did not convert into a higher turnover as Net Sales showed a decline. Staff costs increased 94 bps to 8.6% of the Net Sales compared to 7.7% recorded in the corresponding previous quarter. Decline in Operating Margins and lower Net sales led to a 23% fall in the Operating profit to Rs.113.52 crore.

Other income decreased by 1% to Rs 13.26 crore and interest cost decreased by 61% to Rs 0.57 crore. Depreciation grew by 6% to Rs 31.57 crore. The total tax outgo decreased 24% to Rs 28.51 crore, and Net Profit too declined 29% to Rs.66.13 crores as compared to Rs.92.94 crores in the corresponding period of last year.

Promoters Holding

As of 30 Sept 2013, promoters' holding remained unchanged at 75% compared to previous quarter. No shares of WPL are pledged.

The scrip closed up 0.36% at 179 as on Oct 21, 2013.