(Rs m) | 4QFY03 | 4QFY04 | Change | FY03 | FY04 | Change |
Net sales | 5,844 | 6,373 | 9.0% | 22,073 | 22,535 | 2.1% |
Other income | 229 | 422 | 84.3% | 780 | 1,159 | 48.7% |
Expenditure | 5,267 | 5,726 | 8.7% | 19,612 | 20,710 | 5.6% |
Operating profit (EBDITA) | 577 | 647 | 12.0% | 2,462 | 1,825 | -25.9% |
Operating profit margin (%) | 9.9% | 10.1% | 11.2% | 8.1% | ||
Interest | 194 | 155 | -20.0% | 1,004 | 691 | -31.2% |
Depreciation | 378 | 350 | -7.4% | 1,331 | 1,280 | -3.8% |
Profit before tax | 234 | 563 | 140.6% | 906 | 1,013 | 11.8% |
Extraordinary items | (25) | (61) | (134) | (162) | 20.7% | |
Tax | 27 | 56 | 105.6% | 70 | 85 | 20.7% |
Profit after tax/(loss) | 182 | 446 | 144.9% | 702 | 766 | 9.1% |
Net profit margin (%) | 3.1% | 7.0% | 3.2% | 3.4% | ||
No. of shares (m) | 93.4 | 93.4 | 93.4 | 93.4 | ||
Diluted earnings per share (Rs)* | 7.8 | 19.1 | 7.5 | 8.2 | ||
P/E ratio (x) | 14.3 | |||||
(* annualised) |
Textiles subdues growth: A marginal growth in the topline (up 2%) in FY04 was due to poor performance by the company's textile segment. As can be seen from the table below, revenues from this segment declined by 1% owing to lackluster demand in the global markets, which was prevalent in the first three-quarters of FY04. Total exports, as percentage of sales, stood at 19% for the year. However, due to revival of demand (especially denim) from the international markets during the last quarter, revenues of the textile segment grew by 9% during 4QFY04.
Revenues from the cement division grew by around 3% for the year and around 13% during the quarter. The outlook for cement segment remains positive because the demand supply gap in the country is narrowing, which will improve realisations. The government's thrust on infrastructure and strong demand from the housing sector will boost cement demand going forward. Whether Century will be the key beneficiary of the same remains to be seen owing to lack of economies of scale and much more focussed competitors with strong balance sheets.
Segmental results | 4QFY03 | 4QFY04 | Change | FY03 | FY04 | Change |
Textile revenues (Rs m) | 1,982 | 2,169 | 9.4% | 8,038 | 7,949 | -1.1% |
PBIT Margin (%) | 9.2% | 2.5% | 11.5% | 5.5% | ||
Cement revenue (Rs m) | 2,532 | 2,851 | 12.6% | 9,088 | 9,356 | 3.0% |
PBIT Margin (%) | 1.9% | 9.3% | 2.6% | 1.9% | ||
Paper business revenues (Rs m) | 905 | 962 | 6.3% | 3,352 | 3,634 | 8.4% |
PBIT Margin (%) | 12.5% | 12.7% | 14.8% | 16.8% |
Mixed performance at the operating level: Due to the lack of demand, realisations for denims and other textile products remained on the lower side. Firmness in cotton prices, both in the domestic and international markets, affected the margins adversely. While the paper business margins remained more or less stable during the quarter (more or less comparable with the likes of ITC's paper division margins), the cement division's margins increased sharply in FY04 (still significantly lower than competitors).
Extraordinary gains boost bottomline: Inspite of 26% fall in operating profits, net profits increased by around 9% during the year. This rise is due to higher other income during the year (up 49%), due to surplus on a sale of company's ship (Rs 85 m).