PNB Gilts has reported an astounding growth in profits in 1QFY02. The company's profit has increased to Rs 290 m from Rs 4.8 m in 1QFY01. However, compared to 4QFY01 profits have actually declined by 13%.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (eoy)
Diluted Earnings per share*
P/E (at current price)
The company's financials are not comparable with 1QFY01, as it was an extraordinary quarter for the company. The company's financials took a hit in first quarter of last fiscal year due to rise in interest rates, consequently higher provision for depreciation in value of investments. We have compared the 4QFY01 with the current quarter as the interest rate scenario was similar in both these quarters.
The softening interest rate scenario enabled the company to improve its operating margins to 74% from 67% in the previous quarter. Lower depreciation and other expenses fueled the net margins to 47%. Net profits however, declined by 13% due to 26% drop in interest income.
PNB Gilts has a share of 7% in the Rs 10 trillion debt market and aims to increase the share further to 10% in the coming quarters. Amongst the new initiatives proposed by the company are, its plans to use derivatives as hedging products, diversification of product portfolio to include non-government securities and expansion of network for retailing government securities.
At the current market price of Rs 18, PNB Gilts is trading at a P/E of 2x and Price/Book value ratio of 0.7x 1QFY02 annualised earnings. The company's financials vary according to interest rate scenario. If the rates were to move up from the current levels, the company may have to make higher provision for depreciation in the value of investments.
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407