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In the quarter ended Sep 10, Elantas Beck India - Electrical Insulations systems and specialty chemicals manufacturer, reported 14% fall in net profit to Rs 7.80 crore on higher raw material costs, unsupportive non operating performance and increase in tax rate. The topline grew by 27% to Rs 65.44 crore driven by growth in both segments. Fall in OPM by 540 bps led to flat operating profit of Rs 13 crore (against Rs 13.02 crore in Sep 2009 quarter). Crash in other income and growth in effective tax rate and depreciation cost resulted in 14% fall in net profit to Rs 7.80 crore.
Quarter Performance
The company's operating income grew by 27% to 65.44 crore backed by growth in both the segments especially the Engineering & Electronic Resins and Materials (EERM). The EERM sales grew by impressive 77% to Rs 13.61 crore though contributing only 21% to total sales. The sales of electrical insulations (electrical) grew by 18% to Rs 51.97 crore. Increase in raw material costs led to fall in operating profit margin (OPM) by 540 bps to 19.9% resulting in flat operating profit of Rs 13 crore (against Rs 13.02 crore in Sep 2009 quarter). In terms of cost, as % to sales net stock adjusted, the raw material cost grew by 980 bps to 62%. On the other hand, the saving grace was fall in the remaining expenses – staff cost declined by 90 bps to 5%; other expenditure reduced by 120 bps to 14% while the purchase of traded goods lowered by 200 bps to below 1%.
Segmentwise, the PBIT margin of electrical reduced by 680 bps to 20% thereby lowering its PBIT by 12% to Rs 10.16 crore. On the other hand, the PBIT margin of EERM grew by 70 bps to 15% resulting in impressive 87% growth in its PBIT to Rs 2.02 crore.
The company's PBT declined by 7% to Rs 12.54 crore on fall in other income and increase in depreciation cost. The other income crashed by 41% to Rs 0.75 crore while the depreciation cost grew by notable 36% to Rs 1.21 crore. Further increase in effective tax rate by 550 bps dragged down the PAT by 14% to Rs 7.80 crore.
Nine Month Performance
In the nine month ended Sep 2010, the company's operating income grew by healthy 32% to Rs 188.87 crore driven by both EERM and electrical segments. The sales of EERM grew by impressive 81% to Rs 39.68 crore while that of electrical improved by 23% to Rs 149.79 crore. Fall in OPM by 280 bps to 20.3% limited the growth in operating profit to 16% to Rs 38.27 crore. Segmentwise, the PBIT margin of electrical slipped by 380 bps to 20% resulting in flat 4% growth in its PBIT to Rs 30.23 crore. The PBIT margin of EERM grew by 210 bps to 15% boosting its PBIT by whopping 110% to Rs 5.97 crore. Fall in other income and rise in depreciation cost limited the PBT growth to 10% to Rs 37.70 crore. Further increase in effective tax rate by 100 bps limited the net profit growth to 9% to Rs 25.27 crore.
The promoters' share in the total shareholding remains unchanged at 88.55% in Sep 10 quarter. The promoters' have pledged ‘nil' shares of the company.
Currently the scrip is trading at Rs 750 on BSE.
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