Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 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.
Snowcem's sales up 52% but margins decline - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Aug 2, 2000

    Snowcem's sales up 52% but margins decline

    Snowcem India Limited has recorded a 52% increase in sales from Rs 225 m in 1QFY00 to Rs 343 m in 1QFY01. However, the realisations have come under extreme pressure, thus dropping by 5% from 24% in 1QFY00 to 19% in 1QFY01. The company is facing severe competition in the distemper segment from the Asian Paints "Apex" brand. This along with a 50% rise in the raw material costs have resulted in margins declining drastically. The interest cost has also gone up by almost 50%.

    (Rs m) 1QFY00 1QFY01 Change
    Sales 225 343 52.2%
    Other Income 0.9 0.9 7.2%
    Expenditure 171 278 62.2%
    Operating Profit (EBDIT) 54 65 20.1%
    Operating Profit Margin (%) 23.9% 18.9%  
    Interest 18 27 49.3%
    Depreciation 4 4 -0.6%
    Profit before Tax 32 34 5.9%
    Other Adjustments - -  
    Tax - -  
    Profit after Tax/(Loss) 32 34 5.9%
    Net profit margin (%) 14.3% 9.9%  
    No. of Shares (eoy) (m) 10.5 10.5  
    Diluted number of shares 10.5 10.5  
    Diluted Earnings per share* 12.2 12.9  

    The company has picked up a 50% stake in Brown & Co, a Sri Lankan based paint company. Snowcem would be providing technical assistance for the manufacture of the company's products in Sri Lanka in the company's brand, which would be marketed in Sri Lanka and SAARC nations. Besides, the company would also be exporting raw materials to Sri Lanka. This move is expected to add Rs 100 m to Rs 200 m to the revenues of Snowcem India Limited. But even here, the company would be facing stiff competition from Delmege Forsyth Paints, the company recently acquired by Asian Paints (International) Limited and supposedly with a good market share in Sri Lanka.

    The stock is currently trading at Rs 64 at a P/E multiple of 4.9x on the annualised first quarter FY01 earnings.



    Equitymaster requests your view! Post a comment on "Snowcem's sales up 52% but margins decline". Click here!


    More Views on News

    Asian Paints: Destocking Ahead of GST Impair Sales Volumes (Quarterly Results Update - Detailed)

    Aug 17, 2017

    Asian Paints registers 20.1% YoY decline in profits during 1QFY18 with low single-digit volume growth in the decorative paints segment.

    Asian Paints: Good Performance Across Segments (Quarterly Results Update - Detailed)

    May 18, 2017

    Asian Paints registers 10.4% YoY growth in profits during 4QFY17 with double-digit volume growth in the decorative segment.

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

    Aug 16, 2017

    The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    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: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms