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IPCL: Margins under pressure

Jan 22, 2001

Indian Petrochemicals Corporation Ltd. (IPCL) has reported a significant growth in its topline. The growth in turnover is due to increased volumes and higher realisations.

(Rs m) 3QFY00 3QFY01 Change
Sales 7,682 11,678 52.0%
Other Income 255 301 17.9%
Expenditure 6,047 9,451 56.3%
Operating Profit (EBDIT) 1,635 2,227 36.2%
Operating Profit Margin (%) 21.3% 19.1%  
Interest 879 1,262 43.6%
Depreciation 904 1,033 14.2%
Profit before Tax 106 232 118.8%
Tax - -  
Profit after Tax/(Loss) 106 232 118.8%
Net profit margin (%) 1.4% 2.0%  
No. of Shares (eoy) 249 249  
Earnings per share* 1.7 3.7  
P/E Ratio   19.4  
(*annualised)      

Although the company has reported a handsome growth in operating profits the OPM of the company is down by 220 basis points. With a surge in crude prices, feedstock prices have increased, which could have negatively impacted the margins.

IPCL will provide for tax at the end of the year. Currently, IPCL trades on a multiple of 19.4x on 3QFY01 annualised earnings. However, the company trades on a multiple of 9.6x on 9 months annualised earnings.


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