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In the quarter ended June 2011, Foseco India's net profit grew by 22% to Rs 5.73 crore constrained by weak operating performance though partially offset by supportive non operating performance. The topline grew by healthy 33% to Rs 56.36 crore. High raw material costs and other expenditure pulled down the operating profit margin (OPM) by 150 bps thus limiting the growth in operating profit to 21% to Rs 9.06 crore.
Foseco India is the leading supplier of metallurgical chemicals for the ferrous and non-ferrous foundry industry. Parent Foseco Plc, listed on the London Stock Exchange, has been associated with the metal industry for over 75 years and is acknowledged as a world leader in the supply of consumable products for use in the foundry industry with presence in 32 countries and major facilities in Germany, the US, the UK, Brazil, China, India, South Korea, and Japan
Quarter Performance
The operating income grew by healthy 33% to Rs 56.36 crore in June 2011 quarter. Increased raw material costs and other expenditure pulled down the OPM by 150 bps to 16.1%. Thus it limited the growth in operating profit to 21% to Rs 9.06 crore. Raw material cost, as % to sales net stock adjusted, grew by 300 bps to 57%. Other expenditure rose by 90 bps to 16%. Only staff cost and cost of traded goods fell by 120 bps to 9% and 140 bps to 2% respectively.
The PBT grew by 22% to Rs 8.59 crore backed by limited depreciation cost though partially constrained by interest cost. The depreciation cost grew by limited 12% to Rs 1.04 crore. On the other hand the interest cost grew by whopping 420% to Rs 0.03 crore. The other income increased by 13% to Rs 0.59 crore. The profits were favored further by 10 bps fall in effective tax rate, thereby lifting the net profit by 22% to Rs 5.73 crore.
Half Year Performance
The topline grew by healthy 36% to Rs 112.07 crore in half year ended June 2011. High raw material costs pulled down the OPM by 60 bps to 16.2% thus limiting the growth in operating profit to 31% to Rs 18.18 crore. Marginal depreciation cost offset the flat other income thereby lifting the PBT by 31% to Rs 17.03 crore. Unfortunately, 60 bps hike in effective tax rate constrained the net profit growth to 29% to Rs 11.35 crore.
The Board of Directors of the Company has declared second interim dividend of Rs 4 per equity share of Rs 10. Cumulatively, it has declared interim dividend of Rs.6/- per equity share of Rs.10 for CY 11.
The promoters' share in the total shareholding remains unchanged at 75% in June 11 quarter. The promoters' have pledged ‘nil' shares of the company.
The scrip closed at Rs 576 on BSE on 22nd July 2011.
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