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This is an entirely free service. No payments are to be made.(Rs m) | 3QFY08 | 3QFY09 | Change | 9mFY08 | 9mFY09 | Change |
Sales | 6,153 | 8,202 | 33.3% | 13,539 | 22,826 | 68.6% |
Expenditure | 5,112 | 6,929 | 35.5% | 11,075 | 19,291 | 74.2% |
Operating profit (EBDITA) | 1,041 | 1,273 | 22.3% | 2,464 | 3,534 | 43.4% |
Operating profit margin (%) | 16.9% | 15.5% | 18.2% | 15.5% | ||
Other income | 57 | 252 | 340.4% | 205 | 715 | 247.9% |
Interest | 224 | 255 | 14.0% | 492 | 615 | 25.1% |
Depreciation | 211 | 315 | 49.2% | 475 | 933 | 96.6% |
Profit before tax | 663 | 954 | 44.0% | 1,703 | 2,701 | 58.6% |
Minority interest | 3 | 9 | 19 | 12 | -36.9% | |
Tax | 74 | 237 | 218.4% | 327 | 578 | 76.7% |
Profit after tax/(loss) | 585 | 708 | 21.1% | 1,357 | 2,111 | 55.5% |
Net profit margin (%) | 9.5% | 8.6% | 10.0% | 9.2% | ||
No. of shares | 120.7 | 136.5 | ||||
Diluted earnings per share (Rs)* | 22.4 | |||||
P/E ratio (x)* | 7.1 |
While these growth figures give a good first impression, the fact is that the company is facing slowdown in some of its sub-segments. Its BT-shelter business for telecom companies is once such pressure points which is witnessing slowdown in demand considering that clients are going slowly in their tower expansion plans. The electrical business in international markets is also feeling some pain of slowdown. Sintex however draws some respite from the monolithic construction business, where the current orders in hand will keep it occupied till May 2010.
Here, the company has an order backlog of Rs 14 bn to be executed by the end of next fiscal. While the company had talked in the past of not booking any fresh orders so as to focus on existing projects, the fact is that there are almost no new projects that are coming for discussion in this space. As for Sintex’s textiles business, sales grew by a sedate 2% YoY during the quarter.
Segment-wise performance
(Rs m) | 3QFY08 | 3QFY09 | Change | 9mFY08 | 9mFY09 | Change |
Textile revenue | 930 | 945 | 1.7% | 2,520 | 2,661 | 5.6% |
% share | 15.1% | 11.5% | 18.6% | 11.7% | ||
PBIT margin | 21.8% | 20.7% | 18.4% | 17.3% | ||
Plastic revenue | 5,224 | 7,254 | 38.9% | 11,019 | 20,165 | 83.0% |
% share | 84.9% | 88.5% | 81.4% | 88.3% | ||
PBIT margin | 12.6% | 10.6% | 14.8% | 12.3% |
The management has also reported that one of Sintex’s European subsidiaries, Geiger Technik, is on the verge of bankruptcy. Sintex had started the process of acquiring this company in August 2008 and has paid around Euro 7 m for the same for a 10% stake so far. The management has indicated that if Geiger were to go bankrupt, Sintex will lose the entire amount that it has invested so far. Alternately, if the company (Geiger) revives from bankruptcy and the German government were to call bids again, Sintex will be in a position to pick up the remaining 90% stake at a valuation lower than the Euro 35.6 m that was finalised earlier.
We maintain our positive view on Sintex from a 2 to 3 years perspective, notwithstanding the concerns that might impact its performance in the next term.
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