Nov 3, 2000|
Cadbury's fantastic 3Q performance
Improved operating margins helped Chocolate King Cadbury to record a growth of 32% in profits for the third quarter ended September 2000. Excluding the adjustment for VRS expenditure profits have increased by 26%.
|Operating Profit (EBDIT)
|Operating Profit Margin (%)
|Profit before Tax
|Profit after Tax/(Loss)
|Net profit margin (%)
|No. of Shares (eoy) (m)
|Diluted number of shares (m)
|Diluted Earnings per share*
|P/E (at current price)
Cost control initiatives taken by the company and better efficiencies resulted in improvement in profit margins. Raw material cost of the company increased by mere 2% due to low cocoa prices. Cocoa account for around 48% of total raw material cost of the company. However, higher sales promotion expenses, 12% of sales in 3QFY01 (10% as on December 1999) slowed down the profit growth of the company. But it has actually helped Cadbury in maintaining topline growth in the scenario of increasing challenges in the market.
At the current market price of Rs 613 Cadbury is trading at a P/E multiple of 31 times its 3QFY01 annualised earnings and 41 times its FY01 annualised earnings. The company has a market cap to sales ratio of 3.8 times which is comparatively higher than its peers in the industry. Our projections are in line with the company's performance during the 9 months ended September 2000.
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