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Cadbury does it again in 2QFY00 - Views on News from Equitymaster
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  • Jul 18, 2000

    Cadbury does it again in 2QFY00

    Cadbury India Ltd has reported a YoY 88.4% increase in its net profits on the revenue of Rs 1 bn in 2QFY00. However excluding the tax adjustment of earlier years, the profits increased by 19.6%. Also if we exclude the other income (non recurring in the 2QFY99) the profits of the company jumped by 106% to Rs 67 m in the 2QFY00.

    (Rs m) 2QFY99 2QFY00 Change
    Sales 945 1,071 13.4%
    Other Income 27 4 -84.9%
    Expenditure 831 909 9.4%
    Operating Profit (EBDIT) 114 162 42.4%
    Operating Profit Margin (%) 12.0% 15.1%  
    Interest 9 7 -23.6%
    Depreciation 42 45 7.9%
    Profit before Tax 90 114 26.6%
    Other Adjustments 14 -15  
    Tax 31 43 40.2%
    Profit after Tax/(Loss) 45.70 86.10 88.4%
    Net profit margin (%) 4.8% 9.4%  
    No. of Shares (eoy) (m) 23.8 35.7  
    Diluted number of shares 35.7 35.7  
    Diluted Earnings per share* 5.1 9.6  

    Cadbury is the leader in the chocolate market with its renowned brand. Inspite of the stiff competition from Nestle and other international brands, the company has been able to increase its volume sales. This has led to higher growth in the profits. It has also improved its operating margins through reduction in the staff expenditure and other costs.

    At the current market price of Rs 611, Cadbury is trading at a PER of 63 times its 2QFY00 annualised earnings with a market cap to sales ratio of 5 times. The company has declared the bonus in the current year in the ratio of 1:2. The valuations are expected to improve further with its ability to record growth in its performance with frequent new product launches and curtailment of the cost.



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