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.
BPL Feeling the pinch - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Nov 10, 2000

    BPL Feeling the pinch

    BPL Limited, the flagship company of the BPL Group, is feeling the pinch of competition and slowdown in television sales in the current year. It has posted a 16% drop in net profits for the first half ended 30th September 2000.

    Though the company has posted an 18% growth in sales on QoQ basis (i.e. September ended quarter over quarter ended June 2000), on a YoY basis, sales have dipped by 6%. But operating margins have gone up by 70 basis points from 9.2% in 2QFY00 to 9.9% in 2QFY01. This, on the back of declining television and energy-cell prices, is a creditable performance.

    However, prospects are not promising given the fact that monsoons have not fared well. This would lead to a lower agriculture output, which in turn would affect consumer propensity to spend. The impact is already apparent from surveys conducted by various organisations, which indicates that television sales have dropped by 6%-7% in the first half of the current year.

    (Rs m) 1QFY01 2QFY01 Change
    Sales 3,721 4,404 18.4%
    Other Income - (7) -
    Expenditure 3,371 3,966 17.7%
    Operating Profit (EBDIT) 350 438 25.1%
    Operating Profit Margin (%) 9.4% 9.9%  
    Interest 79 111 40.5%
    Depreciation 66 79 19.7%
    Profit before Tax 205 241 17.6%
    Tax 15 19 26.7%
    Profit after Tax/(Loss) 190 222 16.8%
    Net profit margin (%) 5.1% 5.0%  
    Earnings per share* 18.6 21.7  

    Keeping these factors in mind, we expect the company to post marginal increase in sales and a drop in net profits in FY01. Rising input costs and competition are more likely to pressurize realisations in the second half of FY01. This will have an adverse impact on overall margins. Colour picture tubes prices, for instances, are expected to go up by 6% in the current year due to rise in glass shelve prices. Besides, advertisement expenditure as a percentage of sales is 3.3% (Rs 630 m). We expect this to go up to 4% in FY01 (Rs 800 m). This would further cramp margins.

    The stock is currently trading at Rs 142 at a P/E multiple of 6.5x the annualised 2QFY01 earnings.



    Equitymaster requests your view! Post a comment on "BPL Feeling the pinch". Click here!


    More Views on News

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

    Most Popular

    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.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    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.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    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


    Aug 21, 2017 (Close)


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