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.
Indian Rayon: Stagnant revenue growth - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Oct 31, 2001

    Indian Rayon: Stagnant revenue growth

    Indian Rayon, a diversified major under the Aditya Birla Group, has reported a 33% rise in profits and a marginal rise in operating margins for the second quarter ended September 30, 2001. Bottomline growth was primarily led by higher other income and a sharp fall in interest costs.

    (Rs m) 2QFY01 2QFY02 Change 1HFY01 1HFY02 Change
    Sales 3,634 3,631 -0.1% 6,828 7,053 3.3%
    Other Income 68 86 27.4% 159 160 0.7%
    Expenditure 3,137 3,129 -0.3% 5,935 6,118 3.1%
    Operating Profit (EBDIT) 497 502 1.1% 893 935 4.7%
    Operating Profit Margin (%) 13.7% 13.8%   13.1% 13.3%  
    Interest 202 155 -23.4% 401 315 -21.4%
    Depreciation 176 184 4.2% 359 367 2.3%
    Profit before Tax 186 250 34.3% 292 413 41.4%
    Extraordinary item - -        
    Tax 72 99 36.6% 103 163 58.2%
    Profit after Tax/(Loss) 114 151 32.9% 189 250 32.2%
    Net profit margin (%) 3.1% 4.2%   2.8% 3.5%  
    Number of shares 59.9 59.9   59.9 59.9  
    Diluted Earnings per share* 7.6 10.1   6.3 8.4  

    Sales have stagnated and the reason could be the mature nature of other divisions of the company viz. Viscose Filament Yarn and textiles. Other interest areas like insulators and carbon black are also not doing well in light of slower power reforms and sluggish auto demand in the current year. Much of the growth is estimated to have been aided by the garments division, which has been growing at a rate of 15%. Other income has also increased significantly as this includes insurance claims to be received to the extent of Rs 32.5 m as a result of fire in one of its godowns.

    The company has increased its stake in PSI Data Systems to 70.3%. It acquired a 50.3% stake in PSI from Groupe Bull of France at a price of Rs 186 per share, which was further increased through an open offer in the current quarter. This was the third diversification of the company in the last two years after garments and insurance.

    One of the key reasons for this sharp rise in profits is a 23% fall in interest costs to Rs 155 m in 2QFY02. Though this was partially offset by higher tax outflow, the net impact has been favorable to the company. The company has paid off some of the debt over the past twelve months.

    The scrip is currently trading at Rs 72 on a P/E multiple of 8.6x annualised 1HFY02 earnings. The diversified nature of the company has been the key cause for concern and this reflects in its valuations also. The Aditya Birla Group seems to be using Indian Rayon as a vehicle for diversification in light of the cash rich nature of the company.



    Equitymaster requests your view! Post a comment on "Indian Rayon: Stagnant revenue growth". Click here!


    More Views on News

    Sorry! There are no related views on news for this company/sector.

    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...

    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


    Jul 4, 2017 (Close)


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



    Detailed Quarterly Results With Charts