Capitaline

Results 10-Nov-21

Analysis

Kennametal India

Sales up 20%, net up 114%

Consolidated net sales (including other operating income) of Kennametal India for the quarter ended Sep 2021 has increased 20% to Rs 237.5 crore. Operating profit margin has jumped from 13.9% to 19.0%, leading to 65% rise in operating profit to Rs 45.20 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 27.29% to 26.91%. Purchase of finished goods cost rose from 24.66% to 24.94%. Employee cost decreased from 16.05% to 13.66%. Other expenses fell from 16.99% to 16.28%. Other income rose 29% to Rs 1.8 crore. PBIDT rose 63% to Rs 47 crore. Provision for interest remained nil. PBDT rose 64% to Rs 47 crore. Provision for depreciation fell 4% to Rs 9.2 crore. Profit before tax grew 99% to Rs 37.80 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 9.5 crore, compared to Rs 4.8 crore. Effective tax rate was 25.13% compared to 26.67%. Minority interest was nil in both the periods. Net profit attributable to owners of the company increased 114% to Rs 28.30 crore.

Upside in revenue was driven by strong show from Hard Metal and Hard Metal Products segment and improved performance from machine solutions.

Sales of Machine Solutions segment has gone up 9.19% to Rs 29.70 crore (accounting for 12.51% of total sales). Sales of Hard Metal and Hard Metal Products segment has gone up 22.31% to Rs 207.80 crore (accounting for 87.49% of total sales).

Strong growth in sales is largely due to focus on innovation and value driven solutions. The business grew across several of end customer segments, even though the company experienced the impact of economic uncertainties arising mainly from rising commodity prices and supply chain constraints, including the prevailing global chip shortage issue.

Profit before interest, tax and other unallocable items (PBIT) has jumped 71.15% to Rs 44.50 crore. PBIT of Machine Solutions segment rose 183.33% to Rs 3.40 crore (accounting for 7.64% of total PBIT). PBIT of Hard Metal and Hard Metal Products segment rose 65.73% to Rs 41.10 crore (accounting for 92.36% of total PBIT).

PBIT margin of Machine Solutions segment rose from 4.41% to 11.45%. PBIT margin of Hard Metal and Hard Metal Products segment rose from 14.60% to 19.78%. Overall PBIT margin rose from 13.19% to 18.74%.

Management Comment

Commenting on the results, Vijaykrishnan Venkatesan, Managing Director, KIL said, “I am pleased to share that we made a commendable start to the fiscal by clocking a strong quarter. Our teams have worked relentlessly to meet all our stakeholders needs, while at the same time remaining focused on executing our core strategies, continuing our modernization initiatives, and improving Kennametal India’s organization competitiveness.”

Other developments

Promoters’ stake was 75.00% as of 30 September 2021, compared to 75.00% as of 30 September 2020.

Kennametal India : Consolidated Results
	2109 (3)	2009 (3)	Var. (%)	2106 (12)	2006 (12)	Var. (%)
Sales	237.50	197.10	20	853.70	705.00	21
OPM (%)	19.0	13.9		15.3	10.1
OP	45.20	27.40	65	130.80	70.90	84
Other inc.	1.80	1.40	29	6.90	12.60	-45
PBIDT	47.00	28.80	63	137.70	83.50	65
Interest	0.00	0.20	-100	0.30	1.90	-84
PBDT	47.00	28.60	64	137.40	81.60	68
Dep.	9.20	9.60	-4	37.90	34.40	10
PBT	37.80	19.00	99	99.50	47.20	111
EO Exp	0.00	1.00	-100	1.00	5.10	-80
PBT after EO	37.80	18.00	110	98.50	42.10	134
Taxation	9.50	4.80	98	25.20	9.20	174
PAT	28.30	13.20	114	73.30	32.90	123
PPT	0.00	0.00		0.00	-1.00	-100
Net profit	28.30	13.20	114	73.30	33.90	116
EPS (Rs)*	#	#		33.7	16.8
* EPS is on current equity of Rs 21.98 crore, Face value of Rs 10
# EPS is not annualised due to seasonality of business
Figures in Rs crore
Source: Capitaline Corporate Database

Kennametal India : Consolidated Segment Results

	Quarter ended				Year ended
	% of (Total)	202109	202009	Var.(%)	% of (Total)	202106	202006	Var.(%)
Sales
Maching Solutions	12.51	29.70	27.20	9.19	12.93	110.40	148.10	-25.46
Hard Metal and Hard Metal Products	87.49	207.80	169.90	22.31	87.07	743.30	556.90	33.47
Total Reported Sales	100.00	237.50	197.10	20.50	100.00	853.70	705.00	21.09
Less: Inter segment revenues		0.00	0.00	-		0.00	0.00	-
Net Sales	100.00	237.50	197.10	20.50	100.00	853.70	705.00	21.09
PBIT
Maching Solutions	7.64	3.40	1.20	183.33	5.62	7.00	29.60	-76.35
Hard Metal and Hard Metal Products	92.36	41.10	24.80	65.73	94.38	117.50	43.80	168.26
Total PBIT	100.00	44.50	26.00	71.15	100.00	124.50	73.40	69.62
Less : Interest		0.00	0.00	-		0.00	0.00	-
Add: Other un-allcoable		-6.70	-8.00	-16.25		-26.00	-31.20	-16.67
PBIT Margin(%)
Maching Solutions		11.45	4.41	703.60		6.34	19.99	-1,364.59
Hard Metal and Hard Metal Products		19.78	14.60	518.18		15.81	7.86	794.29
PBT	100.00	37.80	18.00	110.00	100.00	98.50	42.20	133.41

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