MIRC Electronics, the manufacturers of the Onida brand of colour televisions (CTVs), has reported a 7% fall in sales for the second quarter ended September 30, 2001. Thought net profit for 2QFY02 seems to have fallen by 17.3%, if one were to adjust for the other income component, profits have actually risen in the second quarter.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (m)
Diluted Earnings per share*
Fall in sales in 2QFY02 is more pronounced than the first quarter. Reportedly, the company has lost market share in the CTV segment, where it derives more than 93% of its revenues. During the first four months of the current year, MIRC's market share had fallen to 10.1% as compared to 11.3% in the corresponding period last year. Margins in 2QFY02 has gone up by 100 basis points due to a fall in material costs. Other income in 2QFY01 includes Rs 45 m towards remission of sales tax loan liability. If one were to exclude for this in both the quarters, net profit has gone up 114.7% in 2QFY02.
First half snapshot…
MIRC is expect to report a rise in sales in 3Q & 4QFY02 on the back of favorable agricultural output and higher sales in the festive season. The industry already had shown signs of revival with sale of colour television (CTVs) increasing in July and August by 18% and 21% respectively compared with the corresponding period of the previous year. CETMA, the representative organisation of the durable industry, expects a 5% growth in durable sector for the current year. As per CMIE, CTV production between April '01 to August '01 has increased marginally by 1.8% to 0.9 m units. Though the fiscal could witness higher volume growth, value growth seems unlikely as CTV prices have already fallen by around 10% in 1HFY02 due to a sluggish demand scenario. Given the state of the economy and the competitive nature of the industry, pricing pressure is expected to remain in 2HFY02.
The scrip is currently trading at Rs 167 on a P/E multiple of 11.6x annualised 1HFY02 earnings. The stock was trading at Rs 500 levels in May 2001 and the slowdown has resulted in a sharp correction on the bourses.
More Views on News
Sorry! There are no related views on news for this company/sector.
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: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407