BILT has announced its 3QFY11 results. The company has reported a 12.5% YoY growth in sales and 11% YoY increase in net profits. Here is our analysis of the results.
Performance summary
- Topline during 3QFY11 (June ending fiscal) grows by a 12.5% YoY largely led by growth in its pulp business.
- Operating margins saw a marginal increase of 0.3% on account of reduction in staff costs by nearly 0.8% (as percentage of sales).
- The company’s interest expense rose by only 5% despite the high interest rate scenario. This helped the company post a strong 32% YoY growth in PBT. However, higher tax expenses restricted the net profit growth to 11% YoY.
Financial performance: A snapshot
(Rs m) |
3QFY10 |
3QFY11 |
Change |
9mFY10 |
9mFY11 |
Change |
Net sales |
10388 |
11692 |
12.5% |
27468 |
33229 |
21.0% |
Expenditure |
8417 |
9438 |
12.1% |
21668 |
26705 |
23.2% |
Operating profit (EBDITA) |
1971 |
2253 |
14.3% |
5800 |
6524 |
12.5% |
EBDITA margin (%) |
19.0% |
19.3% |
|
21.1% |
19.6% |
|
Interest (net) |
639 |
667 |
4.5% |
1686 |
2019 |
19.8% |
Depreciation |
770 |
843 |
9.5% |
2232 |
2451 |
9.8% |
Profit before tax |
563 |
743 |
32.1% |
1882 |
2054 |
9.2% |
Tax |
12 |
137 |
1013.0% |
308 |
356 |
15.6% |
Minority interest |
108 |
115 |
6.5% |
257 |
318 |
23.5% |
Profit after tax/(loss) |
443 |
492 |
11.0% |
1317 |
1381 |
4.8% |
Net profit margin (%) |
4.3% |
4.2% |
|
4.8% |
4.2% |
|
No. of shares (m) |
655.6 |
655.6 |
|
|
|
|
Diluted earnings per share (Rs)* |
|
3.10 |
|
|
|
|
Price to earnings ratio (x)* |
|
11.83 |
|
|
|
|
What has driven performance in 3QFY11?
- BILT's revenues grew by 12.5% YoY during 3QFY11 led by growth in revenue from its pulp business (up 35.5%). Paper products saw a decline of 2.8% YoY in revenues while revenues from other segments fell by nearly 19%.
Segmental snapshot
|
3QFY10 |
3QFY11 |
Change |
9mFY10 |
9mFY11 |
Change |
Paper |
8,133 |
9,148 |
12.5% |
21,413 |
25,871 |
20.8% |
PBIT margin (%) |
12.2% |
9.6% |
|
15.4% |
11.2% |
|
Paper products & office supplies |
1040.7 |
1,011 |
-2.8% |
2830.8 |
3270.8 |
15.5% |
PBIT margin (%) |
6.0% |
7.0% |
|
7.6% |
7.0% |
|
Pulp |
963 |
1305 |
35.5% |
2550 |
3427 |
34.4% |
PBIT margin (%) |
25.2% |
37.7% |
|
13.7% |
30.6% |
|
Others |
264 |
213 |
-19.3% |
846 |
661 |
-21.8% |
PBIT margin (%) |
-4.0% |
-4.0% |
|
-4.0% |
-4.0% |
|
Total |
10,401 |
11,677 |
12.3% |
27,639 |
33,230 |
20.2% |
PBIT margin (%) |
12.4% |
12.3% |
|
13.8% |
12.5% |
|
- The operating margins saw a marginal rise of 0.3%. This was largely due to a fall in raw materials cost (as a percentage of sales) from 37.5% in 3QFY10 to 36.6% in 3QFY11 and staff costs from 6.4% of sales in 3QFY1o to 5.6% this quarter. Power and stores and spare consumption, however, pared some of the gains as these witnessed a rise during the quarter.
- The company's interest expense rose by only 5% despite the high interest rate scenario. The rise in depreciation charges were also not much. These factors coupled with the growth in operating profits led to the robust 32% YoY growth in PBT. Having said that, growth in net profits was restricted to 11% YoY during the quarter due to higher tax expenses.
What we expect?
At the current price of Rs 36.7, the stock is trading at a price to earnings multiple of 11.8 times FY11 earnings. We are in the process of revising our estimates for the company and will come out with a view soon.