For quarter ended Mar 2014, WPL's OPM increased 115 bps to 8.9% primarily due to a marginal 10 bps increase in Cost of raw materials to 47.1% of Net sales and a 91 bps decrease in Purchase of stock in trade to 18.1% of Net sales. Employee benefit expenses too decreased 26 bps to 8.6% of the Net sales.

Other expenses (which include expenses such as Freight, Cartage and Octroi, Power & Fuel and Service Contract and Workshop expenses) decreased a marginal 6 bps to 18.1% of the Net sales. Higher Net sales and improved Operating margins led to 22% increase in Operating profit to Rs.59.39 crore.

Interest cost, which is a nominal component of WPL's expenses, came in at Rs.0.58 crores, down 8% compared to Rs.0.63 crores in the corresponding previous quarter. Tax expense increased 29% to Rs.15.02 crores compared to Rs.11.60 crore in the corresponding previous quarter. Net profit came in at Rs.35.55 crore, which was up 44% compared to corresponding previous quarter due to higher Net sales, better Operating margins and higher other income.

Financial Performance for the year ended March 31, 2014

For the year ended March 31, 2014, WPL reported a Total Operating Income of Rs.2834.64 crores, up 2% compared to the corresponding previous period. Operating margin declined 55 bps YoY to 7.5% due to a huge 346 bps increase in Purchase of stock in trade to 16.9% of the Net sales. Also, in absolute terms Purchase of stock in trade increased 27% to Rs.487.46 crores and did not convert into a higher turnover as Net Sales showed a marginal increase of just 2%. Staff costs increased 61 bps to 9.1% of the Net Sales compared to 8.5% recorded in the corresponding previous quarter. However, this increase was partially supported by a decrease in Cost of raw material by 321 bps to 46.9% and decrease in other expenses by 40 bps to 19.7%.

Decline in Operating Margins and slower growth in Net sales led to a 5% fall in the Operating profit to Rs.211.50 crore.

Other income increased by 37% to Rs 27.96 crore and interest cost decreased by 53% to Rs 1.42 crore. Depreciation grew by 6% to Rs 63.83 crore. The total tax outgo remained flat at Rs 51.30 crore, and Net Profit declined 4% to Rs.122.91 crores as compared to Rs.127.75 crores in the corresponding period of last year.

Promoters Holding

As of 31 Mar 2014, promoters' holding remained unchanged at 75% compared to previous quarter. No shares of WPL are pledged.

The scrip closed up 6.07% at 258 as on May 19, 2014.