Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2019 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.
G E Shipping: Other income spoils the show - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

G E Shipping: Other income spoils the show

Aug 14, 2014

G E Shipping has announced its June quarter results. The company has reported a 10% YoY growth in consolidated topline while the bottomline has fallen 9% YoY. Here is our analysis of the results

Performance summary
  • Consolidated topline grows by 9% on a YoY basis
  • Operating margins slip marginally on the back of jump in fuel costs
  • Fall in other income earned by 47% leads to a 9% fall in profits on a YoY basis
  • Standalone bottomline falls 38% YoY on the back of a 6% growth in topline

  Consolidated Standalone
(Rs m) 1QFY14 1QFY15 Change 1QFY14 1QFY15 Change
Net sales 7,364 8,082 9.7% 3,621 3,851 6.3%
Expenditure 3,955 4,375 10.6% 2,523 2,756 9.2%
Operating profit (EBDITA) 3,410 3,707 8.7% 1,099 1,095 -0.3%
EBDITA margin (%) 46.3% 45.9%   30.3% 28.4%  
Other income 1,830 979 -46.5% 1,861 1,089 -41.4%
Interest (net) 915 754 -17.7% 541 471 -12.9%
Depreciation 1,580 1,470 -7.0% 898 771 -14.2%
Profit before tax 2,744 2,462 -10.3% 1,520 942 -38.0%
Extraordinary items - 44   - 44  
Tax 294 277   100 110 10.0%
Profit after tax/(loss)  2,450 2,229 -9.0% 1,420 876 -38.3%
Minority Interest - -   - -  
Net profit after minority interest 2,450 2,229 -9.0% 1,420 876 -38.3%
Net profit margin (%) 33.3% 27.6%   39.2% 22.8%  
No. of shares (m) 152.3 150.8   152.3 150.8  
Diluted earnings per share (Rs)*   36.6        
Price to earnings ratio (x)*   9.9        
(* on trailing twelve months earnings)

What has driven performance in 1QFY15?
  • It is the offshore business again that came to the company's rescue during the quarter as segmental revenues were seen higher by 7% YoY during the quarter. Shipping business on the other hand continued to suffer from pressure on freight rates amidst excess supply in the market and hence witnessed an 8% YoY fall in the same period. The fact that there was 88% fall in profits earned from foreign currency transactions also did not help matters. The poor performance of the shipping business can also be seen in the steep 37% fall in segmental EBIT as opposed to same quarter last year.

    Segmental break up...
    Segment 1QFY14 1QFY15 Change
    Revenues 5,494 5,059 -7.9%
    PBIT 1,688 1,058 -37.3%
    PBIT margin 30.7% 20.9%  
    Revenues 4,061 4,351 7.1%
    PBIT 1,971 2,201 11.7%
    PBIT margin 48.5% 50.6%  

  • As far as operating margins are concerned, they came in lower by 0.4% during the quarter, mainly on account of a 22% jump in cost of fuel, oil and water.

  • Profitability was significantly impacted by the 47% fall in other income, leading to a 9% fall in net profits on a consolidated basis during the quarter.
What to expect?
At the current price of Rs 360, the stock trades at a trailing twelve month earnings of close to 10 times on a consolidated basis. We are in the process of reviewing our assumptions to arrive at the FY17 estimates for the stock.

To Read the Full Story, Subscribe or Sign In
To Read the Full Story, Subscribe or Sign In

Get the Indian Stock Market's
Most Profitable Ideas

How To Beat Sensex Guide 2019
Get our special report, How to Beat Sensex Nearly 3X Now!
We will never sell or rent your email id.
Please read our Terms


Aug 19, 2019 11:55 AM


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