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Amrutanjan Health Care: Advertising and Employee Costs Curtail Margins - Views on News from Equitymaster
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  • Feb 16, 2017 - Amrutanjan Health Care: Advertising and Employee Costs Curtail Margins

Amrutanjan Health Care: Advertising and Employee Costs Curtail Margins
Feb 16, 2017

Amrutanjan Health Care has announced the third quarter results financial year 2016-2017 (3QFY17). While the topline increased by 10.7% YoY, the bottomline has increased by 11.1% YoY.

Performance summary
  • Total income grew by 10.7% YoY. Net sales increased by 10.1%% YoY during the quarter and other operating income increased by 111% YoY. OTC segment grew by 8% YoY. Beverage segment grew by 70% YoY. Similarly, APMC segment grew by 111% YoY.
  • Operating profits declined by 20.1% YoY. EBITDA margin stood at 15.4% in 3QFY17. EBITDA margins saw a reduction of about 0.6%. The company is focusing on branding and advertisement. Selling and distribution expense saw a sharp rise of 26% YoY. Similarly, employee cost rose by 21.4% YoY.
  • Net profit for the quarter increased by 11.1% YoY. This on the back of an increase in other income, decrease in tax outgo and depreciation. Similarly, exceptional item which represents refund of excise duty also boosted bottomline.

    Standalone Financial performance snapshot
    (Rs m) 3QFY16 3QFY17 Change 9mFY16 9mFY17 Change
    Net sales 535 593 10.7% 1,277 1,491 16.8%
    Expenditure 421 502 19.0% 1,048 1,261 20.3%
    Operating profit (EBDITA) 114 91 -20.1% 229 231 0.9%
    Operating profit margin (%) 21.3% 15.4% 17.9% 15.5%
    Other income 10 12 12.1% 40 34 -15.3%
    Interest 0 0 -92.0% 1 1 37.5%
    Depreciation 7 3 -50.1% 18 16 -13.1%
    Exceptional items 24 0 24
    Profit before tax 117 123 4.8% 250 272 8.6%
    Tax 30 26 -13.1% 73 75 2.3%
    Effective tax rate 25.9% 21.4% 29.3% 27.6%
    Profit after tax/(loss) 87 96 11.1% 177 197 11.2%
    Net profit margin (%) 16.2% 16.3% 13.9% 13.2%
    No. of shares (m) 15
    Fully diluted EPS (Rs)* 16.04
    P/E (x)* 35.7
    *Based on trailing 12-months earnings
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