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.
Gujarat Ambuja: Deferred taxes take a toll - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Aug 2, 2002

    Gujarat Ambuja: Deferred taxes take a toll

    Gujarat Ambuja, the cement major, prima facie, has announced poor results considering the company has reported a 1% rise in net profits. But a closer look will reveal that profits have actually gone up by 17% on a YoY basis if adjusted for deferred tax. The company has also reported a 9% growth in total revenues.

    (Rs m) 4QFY01 4QFY02 Change FY01 FY02 Change
    Net Sales 4,301 4,134 -3.9% 14,479 15,830 9.3%
    Other Income 41 30 -26.1% 147 216 47.1%
    Expenditure 2,948 3,063 3.9% 9,985 11,388 14.0%
    Operating Profit (EBDIT) 1,353 1,071 -20.8% 4,493 4,442 -1.1%
    Operating Profit Margin (%) 31.5% 25.9%   31.0% 28.1%  
    Interest 309 240 -22.2% 1,341 966 -27.9%
    Depreciation 310 368 18.8% 1,293 1,378 6.6%
    Profit before Tax 776 493 -36.4% 2,006 2,313 15.3%
    Extraordinary items 0 0     0 0
    Tax (73) (86) 18.6% (165) (448) -
    Profit after Tax/(Loss) 703 407 -42.1% 1,841 1,865 1.3%
    Net profit margin (%) 16.3% 9.9%   12.7% 11.8%  
    No. of Shares 147.0 147.0   147.0 147.0  
    Diluted Earnings per share* 19.1 11.1   12.5 12.7  
    P/E Ratio   15.1     13.2  
    (* annualised)            

    The company had a poor fourth quarter in FY02. The Company has reported a 3% drop in its topline while net profits have eroded by 42%. The poor results are a result of a 4% rise in total expenditure and a 19% increase in its depreciation expenses. The commisioning of a new plant in Chandrapur, Maharashtra has led to higher depreciation. The topline in the fourth quarter has seen a degrowth mainly on account of a 7% drop in realisations.

    For full year FY02, sales volume of the company has grown by 18%. Domestic sales of the company has risen by 13% while its export volumes have gone up by 42% . The total expenditure has gone up by 14% mainly on account of a 42% growth in its raw material costs. Inspite of a fall in realisation the company has been able to limit the fall in operating margins by way of higher operational efficiencies.The company has been able to further reduce its power, fuel and freight costs.

    GACL has been able to reduce its interest costs by a considerable 28% mainly by refinancing more expensive debt. The depreciation expenses of the company has gone up by 6.6% mainly on account of commissioning of the new Chandrapur plant. On a like to like basis, excluding the provision for deferred tax, the company has reported a 17% growth in net profits.

    GACL has announced the merger of Ambuja Cement Rajasthan Limited with itself as a measure to turnaround the ailing subsidiary. The company has also performed well in the month of July '02, posting a 69% increase in volumes, but it must be kept in mind that this growth has been on a smaller base and also the fact that new capacity at Chandrapur is likely to have contributed heavily to these volumes.

    The stock is currently trading at a price of Rs 167 a P/E multiple of 13x its annual FY02 earnings. FY02 had been a good year for the company as far as cement volumes are concerned. In the current year, also the company is likely to maintain healthy volumes. Realisations, however, are going to be affected on account of overcapacity. Having said that, GACL has sufficiently highlighted that it is still able to command better realisations compared to its peers.

    Going forward, in the short term, the company is likely to have a healthy topline growth. The bottomline will continue to remain under pressure due to poor realisations. In the long term, however the company will benefit the most as and when the demand and supply mismatch is rectified, which will significantly boost topline as well as bottomline.

     

     

    Equitymaster requests your view! Post a comment on "Gujarat Ambuja: Deferred taxes take a toll". Click here!

      
     

    More Views on News

    Ambuja Cement: Fall in Other Income Drag Bottomline Lower (Quarterly Results Update - Detailed)

    Aug 11, 2017

    While topline witnessed growth on the back of higher cement sale volumes, a 50.5% YoY fall in other income weighed on Ambuja's bottomline during the quarter ending June 2017.

    Ambuja Cem: Net Profits zoom up 361% YoY During Jan-March Quarter (Quarterly Results Update - Detailed)

    May 8, 2017

    Stock price jumps up on Ambuja-ACC merger talks...

    Ambuja Cem: Heavy Monsoon, Subdued Demand Hit Sales (Quarterly Results Update - Detailed)

    Nov 8, 2016

    Heavy monsoon and subdued demand impact Ambuja Cements' cement sales during the quarter ended September 2016.

    UltraTech: Post-Acquisition Cement Capacity Augmented to 93 MTPA (Quarterly Results Update - Detailed)

    Aug 11, 2017

    UltraTech Cement completed the acquisition of cement plants of Jaiprakash Associates Limited (JAL) and Jaypee Cement Corporation Limited (JCCL) during the quarter ended June 2017.

    ACC: Cementing Growth through Capacity Expansion and Favorable Sectoral Developments (Quarterly Results Update - Detailed)

    Jul 20, 2017

    Expanded capacity helped ACC strengthen its market presence in eastern region during the quarter ended June 2017.

    More Views on News

    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

    AMBUJA CEMENT SHARE PRICE


    Aug 18, 2017 (Close)

    TRACK AMBUJA CEMENT

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

    AMBUJA CEMENT 8-QTR ANALYSIS

    Detailed Quarterly Results With Charts

    COMPARE AMBUJA CEMENT WITH

    MARKET STATS