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BPL: Hampered by the slowdown

Nov 29, 2001

BPL Limited, the market leader in the CTV segment, continues to feel the heat due to stiff competition and a slowdown in the economy. Net profit for the first half of the current year has nosedived by 50% YoY to Rs 206 m.

(Rs m)1QFY021HFY02
Net Sales 3,003 6,296
Other Income (1) -
Expenditure 2,645 5,554
Operating Profit (EBDIT) 358 742
Operating Profit Margin (%)11.9%11.8%
Interest 175 359
Depreciation 73 160
Profit before Tax 110 223
Tax 8 17
Profit after Tax/(Loss) 102 206
Net profit margin (%)3.4%3.3%
No. of Shares (eoy) (m) 27.7 27.7
Diluted Earnings per share * 14.7 14.8
P/E  3.8
(* annualised)  

Total Income for the half year ended September 30, 2001 stood at Rs 6,295 m as against Rs 8,114 m compared with the corresponding of the previous year. Gross sales in 2QFY02 fell by 25% to Rs 3,414 m and is in line with the 1QFY02 performance. If one were to look at the 1QFY02 performance, turnover fell by 19% and was was lower on account of fall in sale of traded products namely, refrigerators and washing machines, aggregating Rs 450 m.

The company had also discontinued the sales of dry cell batteries and emergency lanterns, which are being sold directly by the subsidiary company, BPL Soft Energy Systems Limited. The turnover of dry cell batteries and emergency lanterns during the corresponding period of the previous year was Rs 110 m.

The company recorded export turnover of Rs 414 m with CTV exports registering a growth of 8%. The company had plans to double exports in the current financial year. However, given the slowdown in the global economy, it seems unlikely. The company is expected to report around 20% fall in profits and a 13%-14% fall in sales for FY02. Margins would continue to remain under pressure in light of the competitive nature of the industry.

BPL is currently trading at Rs 57on a P/E multiple of 3.8x annualised 1HFY02 earnings.

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