X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Nirma 3Q: Interest costs hit bottomline - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Jan 20, 2001

    Nirma 3Q: Interest costs hit bottomline

    Nirma, the Rs 17 billion detergents, soaps and personal care products major has declared a 15% decline in its net profit to Rs 649 m in the third quarter ended December 31, 2000.

    (Rs m) 3QFY00 3QFY01 Change 9m FY00 9m FY01 Change
    Net Sales Turnover 3,596 5,244 45.8% 10,599 15,592 47.1%
    Other income 96 27 -71.9% 254 84 -66.8%
    Interest 36 299 729.7% 155 730 372.1%
    Profit after Tax/(Loss) 763 649 -15.0% 1,918 2,014 5.0%
    Net profit margin (%) 21.2% 12.4%   18.1% 12.9%  
    No. of Shares (eoy) (m) 33.9 79.4   33.9 79.4  
    Diluted no. of shares (m) 79.4 79.4   79.4 79.4  
    Diluted Earnings per share*       32.2 33.8  
    *(annualised)            
    Current P/e ratio         20.8  

    Its turnover, however, saw an impressive 46% jump during the same period. The company's profitability took a hit because of a huge 730% jump in its interest costs. The jump in interest burden is a result of the company's increased debt levels. The company took on debt to fund its backward integration programmes to manufacture LAB (Linear Alkyl Benzene), a raw material.

    The company's consolidated nine month results were no different. Nirma's turnover grew by 47% during this period. But, because of a huge 372% jump in its interest costs, the company's bottomline grew by a marginal 5%.

    At the current market price of Rs 705, the stock trades at a P/e multiple of 20.8x its nine month FY01 annualised earnings. In light of the fact that interest costs will continue to hit bottomline, the valuation seems fair and is unlikely to change any time soon.

     

     

    Equitymaster requests your view! Post a comment on "Nirma 3Q: Interest costs hit bottomline ". Click here!

      
     

    More Views on News

    Marico: Earnings Hit by Lower Volumes and Firming Input Prices (Quarterly Results Update - Detailed)

    Aug 9, 2017

    While GST implementation brought down volumes and profitability in the short run, Marico remains optimistic in the long run.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    NIRMA LTD SHARE PRICE


    Mar 23, 2011 (Close)

    TRACK NIRMA LTD

    • Track your investment in NIRMA LTD with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    MARKET STATS