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.
KSB Pumps: Valves segment leads the way - 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?  

KSB Pumps: Valves segment leads the way
Aug 3, 2010

KSB Pumps declared its 2QCY10 results. The company has reported 9% YoY growth in sales while its net profits have fallen 8.3% year on year. Here is our analysis of the results.

Performance summary
  • Sales grow by 9% YoY during 2QCY10 (December ending fiscal). Growth during the quarter led by the valves segment which saw sales grow by 54% YoY.
  • Operating margins contract by 4.9% YoY during the quarter on the back of a rise in raw material costs as also the cost of traded goods (all as a percentage of sales).
  • Net profits fall by 8.3% YoY during the quarter, with contraction in operating margins and a rise in depreciation costs being the main reasons for this.


Financial performance snapshot
(Rs m) 2QCY09 2QCY10 Change 1HCY09 1HCY10 Change
Sales 1,383 1,505 8.9% 2,725 2,881 5.7%
Expenditure 1,129 1,303 15.4% 2,245 2,472 10.1%
Operating profit (EBDITA) 254 203 -20.3% 480 409 -14.7%
Operating profit margin (%) 18.4% 13.5%   17.6% 14.2%  
Other income 44 70 58.0% 68 92 36.5%
Interest 8 1 -88.5% 14 3 -81.3%
Depreciation 42 52 22.0% 82 100 21.8%
Profit before tax 248 220 -11.5% 451 399 -11.5%
Tax 75 61 -18.7% 143 123 -14.0%
Profit after tax/(loss) 173 159 -8.3% 308 276 -10.4%
Net profit margin (%) 12.5% 10.5%   11.3% 9.6%  
No. of shares       17.4 17.4  
Diluted earnings per share (Rs)*         36.2  
P/E ratio (x)*         15.5  
* On a trailing 12 months basis

What has driven performance in 2QCY10?
  • KSP Pumps witnessed its net sales growth by 9% YoY during 2QCY10. This was led by the company's valves business which reported a growth of 54% YoY. The pumps segment on the other hand, which contributed to almost 79% of the companyís topline during the quarter saw a more modest sales growth of 3% YoY.

  • KSBís operating margins contracted by 4.9% during 2QCY10. This fall was due to higher raw material costs, employee costs and higher cost of traded goods. Based on segments, it was the pump segment that saw a drastic fall in margins during the quarter from 18% EBIT margins during 2QCY09 to 13.3% in 2QCY10. The valve segment though saw a 0.5% expansion in EBIT margins during this same period.

  • On the back of the fall in operating margins and higher depreciation expenses, KSB recorded an 8.3% YoY fall in its bottomline during 2QCY10.

What to expect?
At the current price of Rs 561, the stock is trading at a multiple of 9.2 times our estimated CY12 earnings. We have a positive view on the stock at current levels.

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

KSB PUMPS SHARE PRICE


Feb 16, 2018 (Close)

TRACK KSB PUMPS

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

KSB PUMPS 8-QTR ANALYSIS

COMPARE KSB PUMPS WITH

MARKET STATS