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Sintex Industries: Growth momentum continues

Jul 12, 2011

Sintex Industries has announced the first quarter results of financial year 2011-2012 (FY12). The company has reported around 22.1% YoY and 19.9% YoY growth in sales and net profits respectively.

Performance summary
  • Consolidated income from operations grows 22.1% YoY during 1QFY12. Growth was driven by both the plastics and textiles business divisions, especially the former which registered a growth of 23.4% YoY during the quarter.
  • Operating margins expand to 17.0% during 1QFY12, from 15.1% during 1QFY11. This is led by lower employee cost and other expenditure (as a percentage of sales)   
  • Despite a surge in tax rates and fall in other income, net profits increase 19.9% YoY during the quarter.
  • The order book in the monolithic segment stands at Rs 30 bn.   

 Consolidated performance snapshot
(Rs m) 1QFY11 1QFY12 Change
Income from operations 9,106 11,120 22.1%
Expenditure 7,733 9,228 19.3%
Operating profit (EBDITA) 1,374 1,892 37.7%
Operating profit margin (%) 15.1% 17.0%  
Other income 202 168 -16.7%
Interest 249 350 41.0%
Depreciation 363 439 20.9%
Profit before tax 964 1,271 31.8%
Tax 174 338 95.0%
Minority Interest 2    
Share of profit in associates   13  
Profit after tax/(loss) 788 946 19.9%
Net profit margin (%) 8.7% 8.5%  
No. of shares (m)   273.0  
Basic & Diluted earnings per share (Rs)   3.5  
P/E ratio (x) *   11.8  
*On a trailing 12 months basis

What has driven performance in 1QFY12?
  • The 22.1% YoY growth in Sintex's consolidated sales during 1QFY12 was largely driven by strong performance from its plastics business. The business, which forms around 89% of the company's consolidated sales, grew by 23.4% YoY during the quarter. This was primarily led by the sub-segment of building material (prefabs and monolithic construction), where sales grew by 32.0% YoY during the quarter. Sales from the second sub-segment custom molding also registered a healthy growth of 16.2% YoY during the quarter.          


Segment-wise performance (Consolidated)
  1QFY11 1QFY12 Change
Revenue (Rs m) 987 1,098 11.3%
% share 10.6% 9.7%  
PBIT margin 11.6% 10.1%  
Revenue (Rs m) 8,120 10,022 23.4%
% share 87.2% 88.8%  
PBIT margin 13.4% 13.8%  
Revenue (Rs m) 202 168 -16.7%
% share 2.2% 1.5%  
PBIT margin 6.4% 76.5%  
Revenue (Rs m) 9,309 11,288 21.3%
PBIT margin 13.0% 14.4%  
  • Led by lower staff costs and other expenditure, Sintex saw a 1.9% YoY improvement in its operating margins during 1QFY12. The margins stood at 17.0% during the quarter. Sintex’s staff costs declined from 12.9% of sales in 1QFY11 to 11.6% in 1QFY12. The margin performance would have been better but for a rise in raw material costs.  The raw material costs increased to 54.4% of sales during the quarter, from 50.2% in 1QFY11.

  • On a segmental basis, while the textiles segment witnessed margin erosion the plastics segment reported a minor improvement in PBIT margins during the quarter.
  • Despite increase in tax rates and fall in other income, net profits increase 19.9% YoY during the quarter. This is mainly due to expansion in sales and strong performance at the operating level.  
What to expect?

At the current price of Rs 171, the stock is trading at a multiple of 7.4 times our estimated FY13 earnings. We maintain our positive view on the stock from the medium term perspective.

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Jun 23, 2021 (Close)


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