June 2016 quarter results

For the quarter ended June 2016, it registered 2% fall in sales to Rs 461.73 crore. OPM rose 160 basis points from 10.1% to 11.7% which saw OP grow 14% to Rs 54.07 crore.

Other income fell 2% to Rs 11.08 crore and interest cost fell 24% to Rs 1.57 crore. After providing for depreciation (up 3% to Rs 6.23 crore), PBT grew 13% to Rs 57.35 crore.

Provision for tax grew 12% to Rs 20.34 crore after which PAT rose 15% to Rs 37.01 crore.

FY 2016 results

For FY 2016, it registered 1% fall in sales to Rs 2711.69 crore. OPM improved 140 basis points from 6.1% to 7.5% which took OP up 22% to Rs 203.88 crore.

PBT grew 11% to Rs 234.54 crore.

PAT grew 11% to Rs 163.20 crore.

A diversified business model

Balmer Lawrie is a diversified multi-product conglomerate, carrying out operations under seven SBUs, with presence in both manufacturing and service sectors. Major manufacturing SBUs comprise industrial packaging (IP) and greases & lubricants (GL) divisions, while key service SBUs include tour & travel (TT) and logistics infrastructure & services (LIS) divisions. This apart, BLCL is also engaged in manufacturing performance chemicals and service-based activities like project engineering & consultancy for oil & infrastructure sector. It is also engaged in container freight and presence in tea blending & packaging business.

This SBU approach provides the required focus and independence in each business unit.

Leader in Industrial Packaging

Industrial Packaging division is the largest manufacturer of 200 litre capacity Steel Drums in the Rigid Industrial Packaging segment. The major customers of Steel Drums are from Lubricants, Greases, Transformer Oil, Chemicals, Agrochemicals as well as Food and Fruit Industries. Steel Drums are utilized for safe packing, transport and storage of the above products. The company effects sale of the manufactured Steel Drums through its own pan-India marketing network.

This SBU offers a product range which covers both 165 litre and 200 litre capacity Steel Drums produced from CRCA steel in its six manufacturing locations spread across the country and located in the major consumption centres.

The company effects sale on pan India basis through six Steel Drum manufacturing facilities close to major consumption centres. SBU has commenced commercial production at its state of art manufacturing facility in Navi Mumbai for manufacturing of 200 Ltr. Capacity Steel Drums effective July, 2014. The new state of art Navi Mumbai plant is expected to provide competitive advantage to the SBU being located at the close proximity of one of the largest consumption centers for Steel Drums in Western Region

During the quarter sales from Industrial Packaging Division degrew 5% to Rs 156.96 crore and accounted for 14% of sales. PBIT grew 8% to Rs 22.68 crore and accounted for 32% of total.

During FY 2016 sales from Industrial Packaging Division fell 8% to Rs 480.92 crore and accounted for 18% of sales. PBIT jumped 87% to Rs 61.11 crore and accounted for 22% of total.

Logistic Infrastructure Services

Logistics Infrastructure business comprises three main segments viz., Container Freight Station (CFS) typically set up in the vicinity of Ports, Warehousing & Distribution (W&D) and Temperature Controlled Warehouses (Cold Chains). CFS is a facility established for the handling and temporary storage of Exim Containers. It is an extension of Port with facility for custom clearance. These are set up primarily with a view to decongest ports. CFS provides an integrated platform for activities such as loading/unloading, transporting, stuffing/destuffing of containers.

Presently, the SBU operates three state-of-the-art CFSs located at Nhava Sheva (Navi Mumbai), Chennai and Kolkata.

Warehousing & Distribution has been a traditional activity of the Company and the SBU operates such warehousing facilities at Kolkata and Coimbatore. Warehousing is an integral part of the logistics value chain facilitating collection, receipt, storage, sorting and dissemination of goods.

During the quarter sales from Logistics Infrastructure and Services Division fell 4% to Rs 129.69 crore and accounted for 28% of sales. PBIT fell 14% to Rs 27.95 crore and accounted for 39% of total.

During FY 2016 sales from Logistics Infrastructure and Services Division grew 11% to Rs 573.79 crore and accounted for 21% of sales. PBIT fell 3% to Rs 141.35 crore and accounted for 52% of total.

Travel & Vacations

This SBU is one of the largest IATA affiliated travel agencies in the country operating in the organized sector which provides end-to-end domestic and international travel, ticketing, tourism and MICE related services to its clients. It is one of the oldest IATA accredited travel agencies of India. Operating from more than 88 locations across 19 cities in the country Balmer Lawrie works round the clock to provide reliable and cost effective travel solutions to its customers. Its clients include major Central Government Ministries, Public Sector Undertakings, Autonomous Bodies and Corporate houses

The business of the SBU consists of three segments, domestic travel, international travel and tour packages. The focus of the SBU is on the aviation industry, which has a huge potential for growth and constitutes the backbone of the tourism industry. The SBU delivers service to its clients 24x7. Major clients of this SBU are Government departments/ministries and the PSUs.

With strong focus on the tourism sector by the government of India, a positive impact on the Tours & Travel business is anticipated.

During the quarter sales from Travel and vacations Division fell 7% to Rs 52.54 crore and accounted for 11% of sales. PBIT grew 19% to Rs 4.55 crore and accounted for 6% of total.

During FY 2016 sales from Travels and vacations Division stagnated at Rs 1244.97 crore and accounted for 45% of sales. PBIT grew 37% to Rs 24.22 crore and accounted for 9% of total.

Grease & Lubricants

The SBU caters to two segments, Automotive and Industrial & Marine. About 67% of the lube market comprises Automotive Grades leaving the balance 33% for Industrial Grades. Its products are marketed under the Balmerol brand– which is one of the renowned brands in this sector. SBU-G&L, through its research and development, is emphasizing more on delivering best grade of lubricants to its customers.

To cater to the requirements of Industrial & Retail customers, Balmer Lawrie has expanded its presence with four Regional & Six District marketing offices and is continuing to spread its channel networking through opening up of C&F Agents, appointing distributors & dealers.

During the quarter sales from Grease and Lubricants Division grew 4% to Rs 103.66 crore and accounted for 22% of sales. PBIT stood at Rs 10.67 crore, up 12% and accounted for 15% of total.

During FY 2016 sales from Grease and Lubricants Division fell 8% to Rs 357.40 crore and accounted for 13% of sales. PBIT stood at Rs 38.06 crore, up 216% and accounted for 14% of total.

Valuation

The share price trades at Rs 658.