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MPS: Other income cushion - Views on News from Equitymaster
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MPS: Other income cushion
Nov 23, 2015

MPS Ltd has announced the results for second quarter of financial year 2015-2016 (2QFY16). The company has reported around 12.9% YoY growth in sales, while net profits have grown by 24% YoY during the quarter.

Performance summary

  • Sales increase by 12.9% YoY during 2QFY16. The dollar revenues were up 5% YoY. The forex gains adjusted against revenue was up 12% YoY.
  • Operating profits dropped by 6% YoY during the quarter.
  • Net profits, however, were higher by 24% due to higher other income.
  • Pursuant to the QIP, the number of equity shares increased by 1.79 m. The money raised from QIP (about Rs 1.5 bn) will be used to fund inorganic growth, strategic initiatives, general & corporate purpose etc.
  • The company has zero debt and cash equivalents of Rs 1.85 bn inclusive of the money raised via QIP which is parked in liquid investments temporarily.
  • It declared interim dividend of Rs 7 per share.
(Rs m) 2QFY15 2QFY16 Change 1HFY15 1HFY16 Change
Net sales 556 627 12.9% 1,058 1,231 16.4%
Expenditure 336 421 25.3% 642 794 23.7%
Operating profit (EBDITA) 220 206 -6.1% 416 437 5.1%
Operating profit margin (%) 39.5% 32.9%   39.3% 35.5%  
Depreciation 15 10 -33.3% 31 21 -32.3%
EBIT 205 196 -4.1% 385 416 8.2%
EBIT margin (%) 36.8% 31.3%   36.4% 33.8%  
Interest 0 0 0.0% 0 0 0.0%
Other income 10 70 582.4% 22 73 237.5%
Profit before tax 215 266 23.7% 406 489 20.4%
Exceptional items - -   77 -  
Tax 74 91 23.0% 167 169 1.2%
Profit after tax/(loss) 141 175 24.1% 316 320 1.2%
Net profit margin (%) 25.3% 27.9%   29.9% 26.0%  
No. of shares (m)         18.6  
Fully diluted EPS (Rs)*         37.9  
P/E (x)*         21.0  

*Based on trailing 12-months earnings

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