X

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.
Kodak: Turbulent times - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Aug 2, 2001

    Kodak: Turbulent times

    Kodak India's sorry story continues. The company has reported a 75.4% drop in net profits on the back of a sharp fall in operating margins for the second quarter ended 30th June 2001.

    (Rs m) 2QFY01 2QFY02 Change 1HFY01 1HFY02 Change
    Sales 1,779 2,017 13.4% 3,483 3,706 6.4%
    Other Income 13 4 -66.1% 28 9 -68.3%
    Expenditure 1,548 1,927 24.5% 2,988 3,546 18.7%
    Operating Profit (EBDIT) 232 89 -61.4% 495 160 -67.8%
    Operating Profit Margin (%) 13.0% 4.4%   14.2% 4.3%  
    Interest 8 4 -53.6% 19 8 -55.1%
    Depreciation 33 22 -35.0% 79 41 -47.5%
    Profit before Tax 203 68 -66.4% 425 119 -72.1%
    Extraordinary item (10) (13) 25.0% (20) (13) -37.5%
    Tax 90 30 -66.2% 182 50 -72.3%
    Profit after Tax/(Loss) 103 25 -75.4% 223 56 -75.0%
    Net profit margin (%) 5.8% 1.3%   6.4% 1.5%  
    No. of Shares (eoy) (m) 11.2 11.2   11.2 11.2  
    Diluted number of shares 11.2 11.2   11.2 11.2  
    Earnings per share (Rs)* 36.7 9.0   39.9 10.0  
    (* annualised)            

    Though sales have increased by 13.4% in 2QFY02, margins have taken a pounding. The reasons are multi-fold. The company had set up a film roll manufacturing plant in Nepal in FY00 to prevent the profitability from taking a hit whenever rupee depreciates (the company earlier used to import film roll and as a result rupee depreciation was affecting margins). However, Kodak did not obtain the certificate of origin from the Nepal government in time and as a result it continues to import. Therefore, margins continue to remain strained on account of higher raw material costs, exchange fluctuations, hike in customs duty on film rolls, change in product mix and subdued demand scenario in the economy.

    However, Kodak has managed reduce its interest and depreciation charges both in the second quarter as well as in the first half, which has prevented the bottomline from a huge drop. Net profit for the first half of the current financial year has fallen by 75% to Rs 56 m.

    The bourses have reacted very sharply to the recent trends and this is apparent from the fact that the scrip has come off almost 71% in the last seven months. Kodak is currently trading at Rs 168 at a P/E multiple of 16.8x the annualised 2QFY02 earnings. The growth prospects predominantly lie in obtaining the certificate of origin for Nepal operations. However, the recent political unrest in Nepal has further alleviated problems for the company.

     

     

    Equitymaster requests your view! Post a comment on "Kodak: Turbulent times". Click here!

      
     

    More Views on News

    Sorry! There are no related views on news for this company/sector.

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    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

    TRACK KODAK INDIA

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

    MARKET STATS