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Godfrey Phillips: Lower cost boost bottomline
Feb 10, 2011

Godfrey Phillips India Limited has announced its 3QFY11 results. The company has reported a 22.1% YoY growth in sales and a 51.8% growth in net profits. Here is our analysis of the results.

Performance summary
  • Godfrey Phillips' sales for 3QFY11 grew by 22.1% YoY largely aided by higher sales in the cigarette and tobacco segment.
  • Operating (EBITDA) margin grew by 2.7% to 14.7% during the quarter. This fall was a result of fall in raw material costs as a percentage of sales during the quarter.
  • Net profit margin increased by 1.7% to 8.8% due to strong growth in operating income and fall in effective tax rate partly offset by higher interest costs.
  • Net profit for 9mFY11 grew by 5.4% YoY while net profit margin fell by 0.5% to 9.4%. This performance comes on the back of higher operating income partly offset by fall in other income, higher interest costs and higher effective tax rate.
Standalone financial picture
(Rs m) 3QFY10 3QFY11 Change 9mFY10 9mFY11 Change
Net sales 3,479  4,247 22.1%   10,506 11,686 11.2%
Expenditure 3,061  3,624 18.4%   9,131 9,912 8.5%
Operating profit  417 623 49.3%   1,374 1,774 29.1%
Operating margins (%) 12.0% 14.7%   13.1% 15.2%  
Other Income 65 54 -16.7% 389  165 -57.5%
Interest (net) 18 27 54.3% 54  73 34.7%
Depreciation 96 95 -1.5% 247  277 12.0%
Profit before Tax  369 556 50.6%   1,462 1,590 8.7%
Extraordinary item - -    - -  
Tax  122 181 48.3% 421  493 17.0%
Profit after Tax/(Loss)  247 375 51.8%   1,041 1,097 5.4%
Net profit margin (%) 7.1% 8.8%   9.9% 9.4%  
No. of Shares (m) 10 10   10  10  
Diluted earnings per share (Rs)*         119.2  
Price to earnings ratio (x)*         15.1  

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