Nicholas: PBT zooms on merger effect - Views on News from Equitymaster

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Nicholas: PBT zooms on merger effect

Oct 24, 2001

Nicholas Piramal India has posted a 68% jump in revenues and a 101% jump in PBT for the quarter ended September 30, 2001. However, this is after taking into consideration the scheme of arrangement with Rhone-Poulenc India, and hence the results are not comparable.

(Rs m) 2QFY01 2QFY02 Change H1FY01 H1FY02 % Change
Sales 1,442 2,419 67.8% 2,661 3,692 38.8%
Other Income 20 181 828.7% 31 204 550.6%
Expenditure 1,210 2,056 70.0% 2,202 3,100 40.8%
Operating Profit (EBDIT) 232 363 56.4% 459 592 29.0%
Operating Profit Margin (%) 16.1% 15.0%   17.2% 16.0%  
Interest 4 71 1773.7% 44 106 143.4%
Depreciation 33 42 24.3% 67 78 17.6%
Profit before Tax 214 432 101.3% 380 612 61.0%
Other Adjustments - 165   - 192  
Tax 30 126 321.5% 44 138 214.2%
Profit after Tax/(Loss) 185 141 -23.7% 336 283 -15.9%
Net profit margin (%) 12.8% 5.8%   12.6% 7.7%  
No. of Shares (eoy) (m) 34.9 38.0   34.9 38.0  
Diluted Earnings per share 21.2 14.8   19.3 14.9  
P/E (at current price)   14.9     14.8  

The company recorded a 110 basis point decline in operating margins. However, a huge savings in interest cost resulted in a sharp rise in PBT. During the current quarter, the company incurred VRS and restructuring costs of Rs 165 m. The costs for on-going VRS and restructuring exercise at its Bhandup plant would be accounted in the coming quarters. Tax provision leapfrogged due to new accounting policy on deffered taxation. Further, the tax rebate hirtherto available to the company for its plant in backward area was no longer available. The increase in share capital is on account of shares issued to shareholders of Rhone-Poulenc India as per the scheme of arrangement.

At the current market price of Rs 221, the stock is trading at 15x annualised earnings for 1HFY02.


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