The Great Eastern Shipping Company has reported a sharp 123% rise in net profit for the third quarter ended 31st December 2000 to Rs 415 m. Though sales declined by 9% to Rs 2,473 m, the company has trimmed its expenses at the operating level, which has resulted in sharp expansion in operating margins from 28% in 3QFY00 to 41% in 3QFY01. But, the decline in sales was primarily on account of nil income from projects (marine construction) in 3QFY01 as against Rs 520 m in 3QFY00. If one were to exclude this item, sales has actually gone up by 12%.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (eoy) (m)
Diluted number of shares
Earnings per share*
One significant aspect to note is that income from charter hire has gone up by 42% to Rs 4,803 m for the first nine months of the current year. During mid 2000, the company managed to charter two of its Aframax carriers (when tanker rates were soaring), as a result of which shipping income has gone by 35% for the first nine months of the current year.
Other adjustment here denote income from sale of ships, which has gone up from Rs 3 m in 3QFY00 to Rs 44 m in 3QFY01.However, for the first nine months of the current year, income from sale of ships is down by 45% to Rs 234 m. But, if we were to exclude this extraordinary income, net profit has gone up significantly by 184% to Rs 994 m in the first nine months of the current year as opposed to Rs 350 m in the corresponding quarter of the previous year.
As per the buy-back programme, the company has bought back 27 m equity shares. As a result, paid-up equity share capital stands reduced to Rs 231 m, thus increasing the promoters holding to 16% (14% earlier).
The stock is trading at Rs 32 at a P/E multiple of 5.1x the annualised nine months earnings.
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: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407