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The consolidated net sales for September 2017 quarter grew by 10% to Rs 628.12 crore. On like to like basis, revenue including GST/VAT grew by 14% to Rs 712.48 with volume growth of 10%. Domestic revenue has grown by 14% with volume growing by 10%. International business grew by 22%. CSD declined by 20%. OPM has increased by 146bps to 32.1%. The net profit inclined by 49% to Rs 98.68 crore due to increase in OPM and declined in interest cost, depreciation & amortization & tax rate.
Company's consolidated performance
For quarter ended September 2017
(Reported revenues are not comparable due to change in accounting treatment of indirect taxes post the implementation of GST)
The net sales grew by 10% to Rs 628.12 crore.
After a challenging Q1 faced with GST apprehensions resulting in substantial wholesale destocking, in the second quarter, the company has recovered significantly. Both topline and bottomline have registered handsome growth at around 14% and 49% respectively. Post GST, the wholesale channels are yet to recover completely from the impact, which the managment expect to improve in the 2nd half of the year. International business is also back on track riding on the base effect of last year's performance. The SAARC regions and Africa did particularly well
On like to like basis, revenue including GST/VAT grew by 14% to Rs 712.48 with volume growth of 10%. Domestic revenue has grown by 14% with volume growing by 10%. International business grew by 22%. CSD declined by 20%.
BoroPlus range grew by 38% led by a strong growth in Antiseptic creams. The company has launch BoroPlus Zero Oil Zero Pimple face wash during the quarter.
Navratna range inclined by 16% led by a double digit volume growth in both cool oils and cool talc. Introduced new SKUs in the portfolio to enhance penetration.
Pain Management range grew by 15%. Balms posted double digit volume growth led by a robust growth in Mentho Plus Balm. New launches – Zandu Gel, Zandu Spray and Zandu Roll on scaling up well.
Male grooming range grew by 12% led by a healthy double digit growth in Fair & Handsome cream and Face Wash,
HE range grew strongly led by a double digit volume growth in HE Deodorants and Perfumes.
The company has launched Fair & Handsome Laser 12 Advanced Whitening and Multi Benefit Cream during the quarter.
Kesh King range declined by 16%. Challenging trade sentiment in the wholesale channel and rural markets continued to impact the performance.
Healthcare range inclined by 2% due to subdued performance of Pancharishtha. Nityam continued to post robust growth led by Tablets. Generics and Ethicals posted double digit volume growth.
7 Oils in One continued to report double digit volume growth and sales of Vasocare Petroleum Jelly more than double during the quarter.
The company has launched ammonia free Diamond Shine Luxury Crème Hair Colour during the quarter,
International business grew by 22% led by a robust performance in SAARC and African markets. MENAP posted a high single digit growth.
OPM has increased by 146bps to 32.1% due to fall in raw material cost, purchase of traded goods and ASP to adjusted net sales. The operating profit inclined by 15% to Rs 201.34 crore.
Other income declined by 38% to Rs 5.34 crore. The interest cost decreased 35% to Rs 10.38 crore while depreciation & amortization has declined by 5% to Rs 75.04 crore. Amortization of acquired trademarks / brands of Kesh King was Rs 60.44 crore. The profit before tax increased by 36% to Rs 121.26 crore
The tax outgo for the quarter stood at Rs 22.66 crore, declined by 1%. The effective tax rate declined from 25.87% to 18.68%. After considering minority interest, the net profit inclined by 49% to Rs 98.68 crore due to increase in OPM and declined in interest cost, depreciation & amortization & tax rate.
For half year ended September 2017
The net sales have decreased by 4% at Rs 1158.94 crore. The OPM has decreased by 240bps to 24.3%. The operating profit declined by 13% to Rs 281.51 crore.
Other income decreased by 14% to Rs 11.82 crore. The interest cost decreased 36% to Rs 18.31 crore while depreciation/amortization was flat at Rs 150.08 crore. The profit before tax decreased by 21% to Rs 124.94 crore
The tax outgo stood at Rs 25.45 crore, declined by 27%. The effective tax rate declined from 22.07% to 20.37%. After considering minority interest, the net profit decreased by 19% to Rs 99.72 crore.
Other Developments
The company has listed unsecured non-convertible debenture aggregating to Rs 75 crore on the 30th September 2017.
Valuation
The scrip is trading at Rs 1174 on BSE.
The total promoters holding in the company stand at 72.74%.
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