The cooker segment sales de-grew by 16% to Rs 133 crore, the cookware segment sales were down by 5% to Rs 71 crore, appliances segment sales de-grew by 19% to Rs 162 crore, while others de-grew by 8% to Rs 12 crore. Export dropped by 31% to Rs 11.4 crore.

Induction cooktops and bundled products declined by 55% to Rs 66 crore due to change in Government policy while other domestic categories grew by about 7% to Rs 298 crore. Value added items saw reasonable traction as compared to mass products. Indegnisation of production/assembly of some products has yielded benefits

Performance for the quarter ended December 2013

The net sales de-grew by 15% to Rs 369.44 crore due to high base effect. The previous year Q3 saw unprecedented demand for induction cooktops and bundled products following announcement of cap on subsidized gas cylinder. Even Southern markets had a temporary rally. The change in the Government policy on subsides cylinder cap from 6 to 9 cylinders has arrested the demand for induction cooktops and related bundled products.

The cooker segment sales de-grew by 16% to Rs 133 crore, the cookware segment sales were down by 5% to Rs 71 crore, appliances segment sales de-grew by 19% to Rs 162 crore, while others de-grew by 8% to Rs 12 crore. Export dropped by 31% to Rs 11.4 crore.

Induction cooktops and bundled products declined by 55% to Rs 66 crore due to change in Government policy while other domestic categories grew by about 7% to Rs 298 crore. Value added items saw reasonable traction as compared to mass products. Indegnisation of production/assembly of some products has yielded benefits

Operating profit margin declined by 180 bps to 12.5% due to rise in purchase in traded stocks by 466 bps to 34.3%, raw material cost by 26 bps to 23.9% and employee expense by 58 bps to 6.3% of adjusted net sales. As a result, the operating profit declined by 26% to Rs 46.13 crore.

Other income inclined by 69% to Rs 2.53 crore. The interest cost was lower by 51% to Rs 1.96 crore while the depreciation was higher by 107% to Rs 4.62 crore. The Profit before tax and EO decreased 27% to Rs 42.08 crore.

There was exceptional expense on account of VRS amounting to Rs 1.14 crore. The tax outgo has decreased by 16% to Rs 11.45 crore. The effective tax rate increased to 23.6% during the quarter as compared to 27.2% in the corresponding previous quarter. The net profit has declined by 33% to Rs 29.49 crore due to overall poor performance.

Performance for the nine months ended December 2013

The sales de-grew 5% to Rs 1021.31 crore. The cooker segment sales de-grew by 5% to Rs 390 crore, the cookware segment sales were down by 8% to Rs 175 crore, appliances segment sales de-grew by 1% to Rs 452 crore, while others de-grew by 22% to Rs 28 crore.

Operating profit margin declined by 200 bps to 12.9% due to rise in raw material cost by 371 bps to 28.4%, other expenses by 50 bps to 22.3% and employee expense by 89 bps to 6.8% of adjusted net sales. As a result, the operating profit declined by 18% to Rs 131.89 crore.

Other income increased by 79% to Rs 6.89 crore. The interest cost decreased by 38% to Rs 7.21 crore. The depreciation has increased by 71% to Rs 10.99 crore. As a result, the Profit before tax and EO decreased 18% to Rs 120.58 crore.

There was exceptional expense on account of VRS amounting to Rs 1.14 crore. The tax outgo has decreased by 18% to Rs 33.86 crore. The effective tax rate fell to 28.3% as compared to 28.1% in the corresponding period of last year. Thus the net profit has decreased by 19% to Rs 85.58 crore.

Other Developments

Prestige Smart Kitchen Net work during at the end of the Q3 FY14 was 509, thus added 17 stores in Q3.

Net borrowing stood at around Rs 27 crore.

Going Forward

The consumer sentiment continues to be depressed. The efforts are being made to get moderate growth in Q4 but the outcome is still unpredictable.

Shareholding Pattern

The promoter's current hold stood at 70.02%.

Valuation

The scrip is currently trading at around Rs 3455 on the BSE.