Capitaline

Results 11-Feb-22

Analysis

Singer India

Flat sales, OPM down

Singer India has recorded flat net sales (including other operating income) at Rs 127.21 crore in the quarter ended December 2021 (Q3FY2022). Operating profit margin has declined from 5.61% to 2.92%, leading to 47.90% decline in operating profit to Rs 3.72 crore.

Raw material cost as a % of total sales (net of stock adjustments) increased from 1.91% to 2.59%. Purchase of finished goods cost fell from 76.57% to 73.51%. Employee cost increased from 4.57% to 6.03%. Other expenses rose from 11.86% to 14.71%.

Other income fell 45.24% to Rs 0.46 crore. PBIDT fell 47.62% to Rs 4.18 crore. Provision for interest jumped 575% to Rs 0.27 crore.

PBDT fell 50.76% to Rs 3.91 crore. Provision for depreciation declined 26.39% to Rs 0.53 crore.

Profit before tax dipped 53.19% to Rs 3.38 crore. Provision for tax was expense of Rs 0.75 crore, compared to Rs 3.03 crore. Effective tax rate was 22.19% compared to 41.97%.

Profit after tax declined 37.23% to Rs 2.63 crore in Q3FY2022.

Promoters stake was 57.65% as of 31 December 2021, compared to 58.99% as of 31 December 2020.

While the sewing machines business revenue registered a growth of 6 % in Q3 FY22 over the prior year, the home appliances business revenue remained lower due to the delayed Winter Season and not very impressive festival demand this year. Further the scare of Omicron virus also led to postponement of buying in both the product segments.

Higher Commodity prices continued to keep margins under pressure especially in the home appliances. Though the Company has taken suitable price increase in mid of November 2021 to offset the cost increases, the company expects these pressures to continue for some more time.

The company however continued to improve its working capital cycle by constant monitoring of its inventories and receivables. Inventory overall came down despite the stuck inventory of winter related items which would remain for some time until the beginning of next season.

Rajeev Bajaj, Managing Director, Singer India commented that, “In this year quarter though the Company’s revenue remained at the prior year levels, profitability was impacted due to increase in commodity prices keeping margins under pressure and the resumption of necessary expenses including the Advertising and promotion which were kept lower in the prior year due to Covid uncertainty.”

“The immediate focus is to increase the turnover levels and improve the profitability amongst the tight competition that exists. Our strategies to grow our both businesses are intact and are being implemented vigorously. We remain thankful to all employees and all other associates who stood with us during this difficult period.”

Financial performance 9MFY2022

Net sales (including other operating income) of Singer India has increased 15.38% to Rs 328.20 crore in 9MFY2022. Operating profit margin has declined from 4.08% to 2%, leading to 43.28% decline in operating profit to Rs 6.58 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 2.14% to 2.92%. Purchase of finished goods cost rose from 73.11% to 73.95%. Employee cost increased from 6.16% to 6.38%. Other expenses rose from 14.29% to 14.68%.

Other income increased 50.27% to Rs 2.78 crore. PBIDT fell 30.41% to Rs 9.36 crore. Provision for interest declined 51.56% to Rs 0.62 crore.

PBDT fell 28.18% to Rs 8.74 crore. Provision for depreciation declined 21.68% to Rs 1.77 crore.

Profit before tax eased 29.67% to Rs 6.97 crore. Provision for tax was expense of Rs 1.67 crore, compared to Rs 4.21 crore. Effective tax rate was 23.96% compared to 42.48%. Profit after tax fell 7.02% to Rs 5.30 crore.

Singer India: Standalone Results
	2112 (3)	2012 (3)	Var %	2112 (9)	2012 (9)	Var %	2103 (12)	2003 (12)	Var %
Sales	127.21	127.32	0	328.20	284.46	15	414.53	451.17	-8
OPM (%)	2.92	5.61		2.00	4.08		4.36	3.30
OP	3.72	7.14	-48	6.58	11.60	-43	18.06	14.87	21
Other inc.	0.46	0.84	-45	2.78	1.85	50	2.77	3.58	-23
PBIDT	4.18	7.98	-48	9.36	13.45	-30	20.83	18.45	13
Interest	0.27	0.04	575	0.62	1.28	-52	1.64	2.22	-26
PBDT	3.91	7.94	-51	8.74	12.17	-28	19.19	16.23	18
Dep.	0.53	0.72	-26	1.77	2.26	-22	3.10	3.78	-18
PBT	3.38	7.22	-53	6.97	9.91	-30	16.09	12.45	29
Tax	0.75	3.03	-75	1.67	4.21	-60	5.47	4.33	26
PAT	2.63	4.19	-37	5.30	5.70	-7	10.62	8.12	31
EPS (Rs) *	2.0	3.1		1.3	1.4		2.0	1.5
* Annualized On current Equity of Rs 10.74 crore of face value of Rs 2 each, Figures in Rs crore, Source: Capitaline Corporate Database

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