X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Honeywell: Cost control measures propel margins - Views on News from Equitymaster
MidCapSelect
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Honeywell: Cost control measures propel margins
Jul 20, 2011

Honeywell Automation India Ltd†(HAIL) has announced 2QCY11 results (December ending company). The company has reported 4.8% YoY and 16.8% YoY growth in sales and net profits respectively. Here is our analysis of the results.

Performance summary
  • Top line increased by 4.8% YoY during 2QCY11.
  • Operating profits increase 48.4% YoY with margins expanding to 10.7% during 2QCY11.††
  • In line with the operating performance, net profits increase 16.8% YoY. However, increase in depreciation and tax expenses restrict profit growth.

Consolidated financial snapshot
(Rs m) 2QCY10 2QCY11 Change 1HCY10 1HCY11 Change
Sales 3,317 3,477 4.8% 6103 6992 14.6%
Other operating income 19 14 -27.9% 3 23 581.8%
Expenditure 3,084 3,117 1.1% 5443 6230 14.5%
Operating profit (EBDITA) 252 374 48.4% 664 785 18.2%
Operating profit margin (%) 7.6% 10.7%   10.9% 11.2%  
Other income 20 27 32.5% 36 53 47.5%
Interest 0 3 1500.0% 1 3 146.2%
Depreciation 31 37 21.5% 61 72 17.9%
Profit before tax 241 360 49.3% 638 763 19.6%
Tax 13 94 606.8% 103 179 73.7%
Profit after tax/(loss) 228 266 16.8% 535 584 9.2%
Net profit margin (%) 6.8% 7.6%   8.8% 8.3%  
No. of shares (m)         8.8  
Basic earnings per share (Rs)         66.1  
P/E ratio (x) *         22.2  
* On a trailing 12 months basis

What has driven performance in 2QCY11?
  • Net sales increased 4.8% YoY in 2QCY11. ††††††††††††††††
  • Operating profits increased 48.4% YoY in 2QCY11. The overall expenditure as a percentage of sales declined from 93.0% in 2QFY10 to 89.6% in 2QCY11. As a result operating margin expanded by 310 bps. †
  • Due to higher taxes and increase in interest and depreciation expenses bottom line registered a growth of 16.8% YoY in 2QCY11.
What to expect?

At the current price of Rs 2,763, the stock trades at 10.8 times our estimated CY14 earnings. We maintain our positive view on the stock from a medium term perspective.

 

To Read the Full Story, Subscribe or Sign In


Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

HONEYWELL AUTOMATION SHARE PRICE


Feb 23, 2018 10:25 AM

TRACK HONEYWELL AUTOMATION

  • Track your investment in HONEYWELL AUTOMATION with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

MORE ON HONEYWELL AUTOMATION

HONEYWELL AUTOMATION 8-QTR ANALYSIS

COMPARE HONEYWELL AUTOMATION WITH

MARKET STATS