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Snowcem: Net profit up 35% - Views on News from Equitymaster
 
 
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  • Feb 1, 2001

    Snowcem: Net profit up 35%

    Snowcem India, the market leader in the exterior paint segment, has declared a 24% rise in sales for the the 3rd quarter ended 31st December 2000 to Rs 556 m. Net profit has gone up by 36% to Rs 70 m in the same period.

    (Rs m) 3QFY00 3QFY01 Change
    Sales 447 556 24.3%
    Other Income 1 1 58.9%
    Expenditure 378 465 23.2%
    Operating Profit (EBDIT) 69 90 30.5%
    Operating Profit Margin (%) 15.4% 16.2%  
    Interest 13 16 19.6%
    Depreciation 5 5 12.5%
    Profit before Tax 52 70 35.3%
    Tax - -  
    Profit after Tax/(Loss) 52 70 35.3%
    Net profit margin (%) 11.6% 12.6%  
    No. of Shares (eoy) (m) 10.5 10.5  
    Diluted number of shares 10.5 10.5  
    Earnings per share* 19.7 26.7  
    *(annualised)      

    Operating profit has moved up by 31% to Rs 90 m backed by a significant increase operating margins from 15 in 3QFY00 to 16% in 3QFY01. This on the back of rising raw material prices and competitive scenario of the Indian paints sector is encouraging. However, margins for the first nine months of the current has dropped marginally by 10 basis points to 17%. To further boost sales, the company has launched new exterior paints, which include Snowcem Plus (premium water proof cement paint), Sandtex Matt (Premium textured exterior finish), and Snowplast (Acrylic finishing plaster for interiors).

    However, the company has planned to venture into gold related business, which has raised apprehensions about the focus of the company.

    The stock is trading at Rs 59 at a P/E multiple of 2.9x the annualised nine months earnings. On the annualised sales of Rs 1,681 m, market capitalisation to sales works out to 0.3 times (market capitalisation is Rs 637 m).

     

     

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