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BILT: Sales from pulp grow by 68% YoY
Nov 16, 2012

Ballarpur Industries (BILT) has announced its results for the first quarter financial year 2012-2013 (1QFY13). The company has reported a 10.7% YoY growth in sales and 4.8% YoY increase in net profits during 1QFY13. Here is our analysis of the results.

Performance summary
  • Topline grew by 10.7% YoY during 1QFY13.
  • BILT was able to control its operating expenditure which went up by 10% YoY.
  • Operating profits increased by 12.2% YoY with marginal increase in operating profit margins.
  • Despite higher depreciation (up by 26.3% YoY) and interest (up by 14% YoY), consolidated net profit managed to increase marginally by 4.8% YoY.

Standalone performance summary
(Rs m) 1QFY12 1QFY13 Change
Net sales 11,114 12,298 10.7%
Expenditure 9,066 10,000 10.3%
Operating profit (EBDITA) 2,048 2,298 12.2%
EBDITA margin (%) 18.4% 18.7%  
Other income - -  
Interest 653 745 14.0%
Depreciation & amortisation 891 1,125 26.3%
Profit before tax 504 428 -15.1%
Profit before tax margin (%) 4.5% 3.5%  
Exceptional items - -  
Tax 75 17 -77.9%
Profit after tax before minority 429 411 -4.1%
Share of minority 97 63  
Profit after tax  332 348 4.8%
Net profit margin (%) 3.0% 2.8%  
No. of shares (m)     655.5
Diluted earnings per share (Rs)*     1.7
P/E (x)     12.6
(*trailing twelve month earnings)

What has driven performance in 1QFY13?
  • Topline grew by 10.7% YoY during 1QFY13. Segment wise, pulp was the best performer. Revenues from the segment were up by 68% YoY. Revenues from paper products were up by 39% YoY. Paper and Others grew by 8% YoY and 11.9% YoY respectively.

  • Raw material consumption did not grow much and nor did the employee costs. BILT was thus able to control its operating expenditure which went up by 10% YoY.

  • Operating profits increased by 12.2% YoY with marginal increase in operating profit margins.

  • Segment wise, the operating profit margins were 9.7%, 4%, 12.9% and -4% for paper, paper products, pulp and others respectively.

  • Despite higher depreciation (up by 26.3% YoY) and interest (up by 14% YoY), consolidated net profit managed to increase marginally by 4.8% YoY.

  • Net profit margins witnessed a slight decline as compared to the same quarter last year.

  • The tax amount is net of MAT entitlement credit of the Company's subsidiary BILT Graphic Paper Products Limited.

    Segmental revenue snapshot
      1QFY12 1QFY13 Change
    Paper 8,820 9,536 8.1%
    PBIT margin (%) 9.3% 9.7%  
    Paper products & office supplies 915.1 1,273 39.1%
    PBIT margin (%) 6.0% 4.0%  
    Pulp 1052 1772 68.3%
    PBIT margin (%) 29.5% 12.9%  
    Others 313 350 11.9%
    PBIT margin (%) -4.0% -4.0%  
    Total 11,100 12,931 16.5%
    PBIT margin (%) 10.6% 9.7%  

    What to expect?
    BILT wants to focus on consolidating its leadership position in the paper sector. The recently commissioned Sabah facility is expected to resolve the pulp supply issue for the company. In order to build on its brand further, the company had recently undergone a huge expansion plan whereby it has expanded its capacities in both paper and pulp segments. It also ventured into the paper tissue business. At the current price of Rs 22, the stock is trading at a high price to earnings multiple of 12.6 times its trailing twelve month earnings. We maintain our negative view on the stock.

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