Kodak: Margins nose-dive - Views on News from Equitymaster

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Kodak: Margins nose-dive

Apr 23, 2001

Kodak India has reported a dissappointing first quarter performance of the current year ended 31st March 2001. The sharp in operating expenses has had a telling effect on its margins, which has resulted in a sharp 75% decline in operating margins.

(Rs m) 1QFY01 1QFY02 Change
Sales 1,704 1,689 -0.9%
Other Income 15 5 -70.2%
Expenditure 1,441 1,619 12.4%
Operating Profit (EBDIT) 264 70 -73.3%
Operating Profit Margin (%) 15.5% 4.2%  
Interest 10 4 -56.4%
Depreciation 46 20 -56.6%
Profit before Tax 223 51 -77.3%
Extraordinary items (10) -  
Tax 92 20  
Profit after Tax/(Loss) 121 31 -74.7%
Net profit margin (%) 7.1% 1.8%  
No. of Shares (eoy) (m) 11.2 11.2  
Diluted number of shares 11.2 11.2  
Earnings per share* 43.1 10.9  
*(annualised)      

Sales for the first quarter has fallen marginally to 1,689 m, down 1%. Operating profit margins have come down sharply from 15.5% in the first quarter of the last year to 4.2% in 1QFY02. One of the primary reason for this sharp rise is the 35% increase in other expenditure to Rs 247 m and 16% rise in staff costs. Besides, the change in product mix, exchange fluctuations and increase in duties in imported films in the current Budget have also added to the woes of the company.

The scrip is trading at Rs 262, at a P/E multiple of x the annalised first quarter earnings. On the estimates sales of Rs 7,000 m, the market capitalisation to sales works out to 0.4 times (market capitalisation is Rs 2,934 m).

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