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Hitachi Home & Life Solutions, one of the top air-conditioning companies in India reported a robust 44% increase in net sales at Rs 83.43 crore for the quarter ended Dec’07. Aided by a 530 bps expansion in margins to 6.1%, the Company’s Net profit zoomed by 241% to Rs 5.38 crore.
Performance for the quarter ended December’07
The Company’s operations fall within a single reportable segment i.e. Home Appliances, wherein it predominantly operates in Air-Conditioning business which is seasonal in nature, hence, the third quarter results are not indicative of overall performance of the year.
For the third quarter ended Dec’07, the Company reported strong 44% increase in Net Sales to Rs 83.43 crore.
The OPM for the period advanced by 530 bps to 6.1% leading the operating profit to a robust growth of 952% to Rs 5.05 crore. The OPM expanded as a result of reduction in overall costs (as a % to sales) and higher sales. The other expenses as % to sales decreased by 440 bps to 21.2%, while the Staff costs and raw material costs depreciated by 30 bps and 50 bps to 6.8% and 66%, respectively.
Other income for the period fell by 31% to Rs 2.03 crore. The interest outgo declined by 91% to Rs 0.04 crore while the provision for depreciation increased by 49% to Rs 1.61 crore. Therefore, the PBT stood at Rs 5.43 crore, up by 189%. After accounting for a taxation of Rs 0.05 crore (down by 83%), the PAT posted a scintillating growth of 241% at Rs 5.38 crore.
The company has revised estimated useful life of certain assets. As a result of this change, additional depreciation aggregating Rs.7 lacs in the current quarter (December 06 quarter: Nil) and Rs.199 lacs for the nine months (December 06 nine months: Nil) is charged to the profit and loss account.
Performance for the nine-months ended Dec’07
For the nine-month ended Dec 2007, Net sales grew by 37% to Rs 321.63 crore. The OPM expanded by 290 bps to 9.8%, causing the OP to increase by 93% at Rs 31.39 crore. Other income doubled to Rs 9.03 crore. Net interest cost decreased by 76% to Rs 0.44 crore and depreciation increased by 75% to Rs 5.92 crore. The tax provision stood at Rs 3.41 crore as against Rs 1.99 crore. Finally, the PAT registered a massive growth of 127% at Rs 30.65 crore.
Valuation
The share is currently trading at around Rs 133.25 on the BSE.
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