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Nelcastreported 12% rise in net profit to Rs 6.43 crore on 1% rise in net sales to Rs 129.51 crore for the fourth quarter ended March 2016. Good performance at the operational level coupled with higher other income and lower tax provision were the main reasons for the rise in profit for the quarter.
Nelcast is India's largest producer of Ductile Iron Castings and a leading producer of Grey Iron Castings. Their products cater to the Global Automotive, Tractor, Construction, Mining, Railways and General Engineering sectors.
Quarter Performance
The OPM during the fourth quarter ended March 2016 rose by 140 bps to 9.6% due to decreased raw material expenses. Raw material cost (as a % to sales, net of stock) fell by 810 bps to 42.1%. Other expenses (% of sales net of stock) rose by 360bps to 23.4%. Employee expenses rose100 bps to 8%. Power and fuel expenses (% of sales net of stock) rose by 270 bps to 16.8%.
Thus the operating profit rose by 19% to Rs 12.44crore. Other income stood at Rs 70 lakh, higher by 133%. After 9% rise in depreciation cost to Rs 3.34 crore and Rs 1.57 croreinterest expensevis a vis an interest credit of Rs 3 lakh in previous year, PBT rose 6% to Rs 8.23crore. After 440 bps dropin tax rate, tax provision stood 12% lowerat Rs 1.8 crore. Thereafter, net profit stood at Rs 6.43 crore against profit of Rs 5.72 crore in previous corresponding quarter, a rise of 12%.
Annual Performance
Net sales for the FY 16rose 3% at Rs 560.7 crore.
The OPM during the yearended March 2016 rose by 310 bps to 11.4% due to decreased raw material expenses. Raw material cost (as a % to sales, net of stock) fell by 900 bps to 46%. Other expenses (% of sales net of stock) rose by 320 bps to 19.5%. Employee expenses rose 50 bps to 6.8%.
Thus the operating profit rose by 42% to Rs 63.9crore. Other income stood at Rs 2.09 crore, higher by 22%. After 2% rise in depreciation cost to Rs 12.86 crore and 49% rise in interest expense to Rs 6.96 crore, PBT rose 56% at Rs 46.2 crore. After 530 bps rise in tax rate, tax provision stood 88% higher at Rs 14.32crore. Thereafter, net profit stood at Rs 31.88 crore against profit of Rs 21.96 crore in previous corresponding period, a rise of 45%.
For the fiscal ended March 31, 2015, the company's net profit stood at Rs 21.96 crore, drop of 2% on6% rise in net sales at Rs 544.88 crore.
Shares of Nelcast are currently trading 1.6% higher around Rs 58.5 at BSE on 25 May, 2016 a day after earnings were announced.
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