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Results
01-Feb-22
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Analysis
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Oriental Carbon & Chemicals
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Rising RM prices and sea freight costs impacted margins and profitability
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Oriental
Carbon & Chemicals consolidated net sales declined 8.32% to Rs 109.51 crore
in Q3FY22 compared to Q3FY21. Sales of Chemicals segment has gone down 12.07%
to Rs 92.89 crore (accounting for 84.80% of total sales). Sales of Investment
segment rose 0.03% to Rs 2.58 crore (accounting for 2.36% of total sales). Sales
of segment has gone up 17.59% to Rs 14.06 crore (accounting for 12.84% of total
sales). Inter-segment sales came down from Rs 0.74 crore to Rs 0.02 crore.
Operating
profit margin has declined from 36.32% to 19.81%, leading to 50.01% decline in
operating profit to Rs 21.69 crore. Raw material cost as a % of total sales
(net of stock adjustments) increased from 26.50% to 39.06%. Employee cost
decreased from 12.49% to 12.26%. Other expenses rose from 25.72% to
29.54%.
Other
income fell 44.71% to Rs 0.47 crore.
PBIDT fell 49.91% to Rs 22.16 crore. Profit before interest, tax and
other unallocable items (PBIT) has slumped 57.27% to Rs 16.99 crore. PBIT of Chemicals
segment fell 66.02% to Rs 12.22 crore (accounting for 71.94% of total PBIT). PBIT
of Investment segment fell 1.47% to Rs 2.50 crore (accounting for 14.73% of
total PBIT). PBIT of General Engineering
Products segment rose 80.90% to Rs 2.26 crore (accounting for 13.33% of total
PBIT).
PBIT
margin of Chemicals segment fell from 34.05% to 13.16%. PBIT margin of Investment segment fell from
98.42% to 96.93%. Overall PBIT margin
fell from 33.08% to 15.51%.
Provision
for interest fell 5.11% to Rs 1.3 crore. PBDT fell 51.34% to Rs 20.86
crore. Provision for depreciation rose
9.80% to Rs 5.94 crore.
Profit
before tax down 60.17% to Rs 14.92 crore.
Provision for tax was expense of Rs 2.87 crore, compared to Rs 7.89
crore. Effective tax rate was 19.24% compared to 21.06%.
Minority
interest increased 32.14% to Rs 0.74 crore.
Net profit attributable to owners of the company decreased 61.01% to Rs
11.31 crore.
Promoters’
stake was 51.76% as of 31 December 2021 compared to 51.76% as of 31 December
2020.
For year-to-date (YTD)
results analysis
Net
sales of Oriental Carbon & Chemicals have increased 20.45% to Rs 317.31
crore. Sales of Chemicals segment has
gone up 18.72% to Rs 270.76 crore (accounting for 85.31% of total sales). Sales of Investment segment fell 3.18% to Rs
7.80 crore (accounting for 2.46% of total sales). Sales of segment has gone up 38.07% to Rs
38.82 crore (accounting for 12.23% of total sales). Inter-segment sales came down from Rs 0.80 crore
to Rs 0.07 crore.
Operating
profit margin has declined from 32.77% to 21.42%, leading to 21.27% decline in
operating profit to Rs 67.97 crore. Raw material cost as a % of total sales
(net of stock adjustments) increased from 25.78% to 37.44%. Employee cost decreased
from 14.98% to 13.23%. Other expenses rose from 27.05% to 28.62%.
Other
income rose 155.96% to Rs 4.94 crore.
PBIDT fell 17.39% to Rs 72.91 crore. Profit before interest, tax and
other unallocable items (PBIT) has slumped 22.52% to Rs 57.70 crore. PBIT of
Chemicals segment fell 30.37% to Rs 44.66 crore (accounting for 77.40% of total
PBIT). PBIT of Investment segment fell 5.05% to Rs 7.61 crore (accounting for
13.19% of total PBIT). PBIT of General
Engineering Products segment rose 134.79% to Rs 5.43 crore (accounting for
9.41% of total PBIT).
PBIT
margin of Chemicals segment fell from 28.12% to 16.49%. PBIT margin of Investment segment fell from
99.49% to 97.58%. Overall PBIT margin
fell from 28.18% to 18.18%.
Provision
for interest fell 26.92% to Rs 3.72 crore.
PBDT fell 16.81% to Rs 69.19 crore.
Provision for depreciation rose 8.63% to Rs 17.37 crore.
Profit
before tax down 22.86% to Rs 51.82 crore.
Provision for tax was expense of Rs 12.52 crore, compared to Rs 14.94
crore. Effective tax rate was 24.16%
compared to 22.24%.
Minority
interest increased 84% to Rs 1.84 crore.
Net profit attributable to owners of the company decreased 26.89% to Rs
37.46 crore.
Promoters’
stake was 51.76% as of 31 December 2021 ,compared to 51.76% as of 31 December
2020.
Commenting on the
results, Mr. Arvind Goenka, Promoter and Managing Directors said
"Post
the second wave of Covid-19 in Q1 FY22, there had been steady recovery in
economic activities on the back of large vaccination drive in India with 1
billion shots by Oct 2021 and touched 1.5 billion shots by Jan 2022. We have
recorded total income growth of 19% Yo Y for 9M FY22. However, we witnessed
slowdown in demand from domestic as well as international markets due to the
impact of third wave of Covid in European and South-East Asian markets.
Rising
raw material prices and sea freight costs have impacted our margins and
profitability for the quarter. We are taking necessary steps towards
controlling costs and shall strive to price hikes for covering higher cost
depending on the market environment.
We
are pleased to inform that the Company has commissioned its first phase of
5,500 tonnes per annum capacity of Insoluble Sulphur at Dharuhera plant at
Haryana from 21st December, 2021. Sulphuric Acid plant commissioning is getting
delayed due to supplier issues and expect to be commissioned by March 2022. We
shall plan for the second phase of Insoluble Sulphur Plant depending on the
visibility of demand and auto market scenario going forward.
Overall,
we expect demand from replacement and export segment to be normalized which
should augur well for tyre industry. Also tyre demand from the commercial
vehicle industry has remained strong over past few months on account of
improved fleet utilization.
With
the commissioning of our phase-I of capacity expansion, we are optimistic of
gaining new orders in the quarters to come. Outlook for the Tyre industry
appears stable to moderately optimistic in light of the shift towards personal
mobility and increased vehicle utilization. We are focused on our efforts to
deliver sustainable and profitable longterm growth with our dominant position
in the industry and also proprietary manufacturing technology that the Company
possesses. We are focused on increasing our penetration into high potential
geographies like North America."
Full year results
analysis
Net
sales of Oriental Carbon & Chemicals have declined 3.34% to Rs 373.86
crore. Sales of Chemicals segment has
gone down 3.19% to Rs 332.51 crore (accounting for 88.91% of total sales). Sales of General Engineering Products segment
has gone down 4.37% to Rs 41.48 crore (accounting for 11.09% of total sales). Inter-segment
sales rose Rs 0.07 crore to Rs 0.13 crore.
Operating
profit margin has jumped from 27.09% to 31.13%, leading to 11.05% rise in
operating profit to Rs 116.37 crore. Raw
material cost as a % of total sales (net of stock adjustments) decreased from
28.17% to 27.86%. Employee cost decreased from 14.26% to 14.23%. Other expenses
fell from 29.93% to 26.89%.
Other
income rose 19.47% to Rs 12.64 crore.
Profit before interest, tax and other unallocable items (PBIT) has
jumped 11.77% to Rs 99.47 crore. PBIT of
Chemicals segment rose 14.28% to Rs 95.40 crore (accounting for 95.90% of total
PBIT). PBIT of General Engineering
Products segment fell 26.13% to Rs 4.07 crore (accounting for 4.10% of total
PBIT).
PBIT
margin of Chemicals segment rose from 24.30% to 28.69%. PBIT margin of General Engineering Products
segment fell from 12.72% to 9.82%.
Overall PBIT margin rose from 23.00% to 26.60%.
Provision
for interest fell 31.66% to Rs 6.54 crore.
Loan funds rose to Rs 160.02 crore as of 31 March 2021 from Rs 140.95
crore as of 31 March 2020. Inventories
rose to Rs 47.39 crore as of 31 March 2021 from Rs 42.05 crore as of 31 March
2020. Sundry debtors were higher at Rs
80.61 crore as of 31 March 2021 compared to Rs 71.34 crore as of 31 March
2020. Cash and bank balance declined
from Rs 142.75 crore as of 31 March 2020 to Rs 9.31 crore as of 31 March
2021. Investments rose to Rs 185.33
crore as of 31 March 2021 from Rs 17.40 crore as of 31 March 2020 .
Provision
for depreciation rose 2.94% to Rs 22.07 crore.
Fixed assets increased to Rs 455.29 crore as of 31 March 2021 from Rs
378.80 crore as of 31 March 2020.
Intangible assets declined from Rs 0.59 crore to Rs 0.54 crore.
Profit
before tax grew 19.01% to Rs 100.40 crore.
The company reported nil EO income for FY21 compared to EO expense of Rs
1.76 crore in FY20. PBT after EO was up 22% to Rs 100.4 crore
Provision
for tax was expense of Rs 17.41 crore, compared to Rs 7.83 crore. Effective tax rate was 17.34% compared to
9.48%.
Minority
interest increased 144.79% to Rs 3.99 crore.
Net profit attributable to owners of the company increased 8.01% to Rs
79.00 crore.
Promoters’
stake was 51.76% as of 31 March 2021 ,compared to 51.69% as of 31 March 2020
.
Cash
flow from operating activities decreased to Rs 91.22 crore for year ended March
2021 from Rs 114.64 crore for year ended March 2020. Cash flow used in acquiring fixed assets
during the year ended March 2021 stood at Rs 84.61 crore, compared to Rs 50.46
crore during the year ended March 2020.
The
scrip closed at Rs 940
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Oriental Carbon & Chemicals : Consolidated Results
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Particulars
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2112
(03)
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2012
(03)
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Var.(%)
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2112
(09)
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2012
(09)
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Var.(%)
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2103
(12)
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2003
(12)
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Var.(%)
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Net Sales
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109.51
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119.45
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-8
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317.31
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263.44
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20
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373.86
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386.79
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-10
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OPM (%)
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19.8
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36.3
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21.4
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32.8
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31.1
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27.1
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OP
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21.69
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43.39
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-50
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67.97
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86.33
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-21
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116.37
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104.79
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-16
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Other Inc.
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0.47
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0.85
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-45
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4.94
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1.93
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156
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12.64
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10.58
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8
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PBIDT
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22.16
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44.24
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-50
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72.91
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88.26
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-17
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129.01
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115.37
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-14
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Interest
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1.3
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1.37
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-5
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3.72
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5.09
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-27
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6.54
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9.57
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10
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PBDT
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20.86
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42.87
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-51
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69.19
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83.17
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-17
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122.47
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105.8
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-16
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Depreciation
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5.94
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5.41
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10
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17.37
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15.99
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9
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22.07
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21.44
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6
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PBT
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14.92
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37.46
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-60
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51.82
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67.18
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-23
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100.4
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84.36
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-20
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Share of Profit/(Loss) from Associates
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0
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0
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-
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0
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0
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-
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0
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0
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-
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PBT before EO
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14.92
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37.46
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-60
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51.82
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67.18
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-23
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100.4
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84.36
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-20
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EO Income
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0
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0
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-
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0
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0
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-
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0
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-1.76
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-
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PBT after EO
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14.92
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37.46
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-60
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51.82
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67.18
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-23
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100.4
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82.6
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-22
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Taxation
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2.87
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7.89
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-64
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12.52
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14.94
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-16
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17.41
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7.83
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-73
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PAT
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12.05
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29.57
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-59
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39.3
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52.24
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-25
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82.99
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74.77
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-2
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Minority Interest (MI)
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0.74
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0.56
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32
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1.84
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1
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84
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3.99
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1.63
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17
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Net profit
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11.31
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29.01
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-61
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37.46
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51.24
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-27
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79.0
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73.14
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-3
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EPS (Rs)*
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#
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#
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#
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#
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79.1
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74.8
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Notes
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* EPS is on current equity of Rs 10.00 crore, Face value of Rs
10, Excluding extraordinary items.
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# EPS is not annualised
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bps : Basis points
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Figures in Rs crore
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Source: Capitaline Corporate Database
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Oriental Carbon & Chemicals : Consolidated Segment Results
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% of (Total)
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2112
(03)
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2012
(03)
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Var.(%)
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% of (Total)
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2112
(09)
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2012
(09)
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Var.(%)
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% of (Total)
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2103
(12)
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2003
(12)
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Var.(%)
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Sales
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Chemicals
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85
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92.89
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105.64
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-12
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85
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270.76
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228.07
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19
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87
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332.51
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343.48
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-3
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Investments
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2
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2.58
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2.58
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0
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2
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7.80
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8.06
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-3
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3
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9.68
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General Engineering Products
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13
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14.06
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11.96
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18
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12
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38.82
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28.12
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38
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11
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41.48
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43.38
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-4
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Total Reported Sales
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100
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109.54
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120.18
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-9
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100
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317.38
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264.24
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20
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100
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383.67
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386.86
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-1
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Less: Inter segment revenues
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0.02
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0.74
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-97
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0.07
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0.80
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-92
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0.13
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0.07
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85
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Net Sales
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109.51
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119.45
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-8
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317.31
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263.44
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20
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383.54
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386.79
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-1
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PBIT
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Chemicals
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72
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12.22
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35.97
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-66
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77
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44.66
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64.14
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-30
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88
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95.98
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83.48
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15
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Investments
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15
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2.50
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2.54
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-1
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13
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7.61
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8.02
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-5
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9
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9.56
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5.52
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73
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General Engineering Products
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13
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2.26
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1.25
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81
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9
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5.43
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2.31
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135
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4
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4.08
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Total PBIT
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100
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16.99
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39.76
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-57
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100
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57.70
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74.47
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-23
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100
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109.62
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89
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23
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Less : Interest
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1.30
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1.37
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-5
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3.72
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5.09
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-27
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6.54
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9.57
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-32
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Add: Other un-allcoable
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-0.76
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-0.93
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-18
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-2.16
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-2.19
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-1
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-2.68
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3.18
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-184
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PBT
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14.93
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37.47
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-60
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51.82
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67.18
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-23
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100.40
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82.6
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22
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