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Indal: OPM inches up

Nov 1, 2000

Indian Aluminium has reported a 33% rise in turnover for the quarter ended 30th September 2000. The company has logged in a rise in operating margins as sales growth continued to outpace expenditure. Overall profit growth has been suppressed mainly on account of the rise in extraordinary expenditure.

(Rs m) 2QFY00 2QFY01 Change
Net Sales 2,501 3,327 33.0%
Other Income 25 26 5.3%
Expenditure 2,006 2,646 31.9%
Operating Profit (EBDIT) 495 681 37.6%
Operating Profit Margin (%) 19.8% 20.5%  
Interest 89 99 10.5%
Depreciation 133 162 21.7%
Profit before Tax 297 446 50.1%
Other Adjustments (20) (51)  
Tax 47 110 135.0%
Profit after Tax/(Loss) 231 285 23.7%
Net profit margin (%) 10.0% 10.1%  
No. of Shares (eoy) 71.1 71.1  
Diluted Earnings per share* 13.0 16.1 23.7%
P/e ratio 6.9 5.6  

The company’s chemical, metal, extrusions and sheet businesses continued to perform well in the quarter. However the foil and packaging business suffered on account of fierce price competition.

We have projected a full year growth of 22% in revenues and 49% in profits. We may need to take a relook at our bottomline forecast in view of the rise in extraordinary expenses (a part of which is a one time cost). Also with alumina prices remaining below the US$ 180 mark, margins too could come under pressure (as costs rise on account of the rise in petroleum prices).

At its current price of Rs 89. the stock trades at a P/e multiple of 5.6x on annualised 2QFY01 earnings.

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