• OUTLOOK ARENA
  • VIEWS ON NEWS
  • JULY 27, 2000

Ingersoll Rand 1Q: Gas compressors selloff hits turnover

On the face of it, Ingersoll Rand (India) Ltd. has declared dismal results in 1QFY2001. The company's turnover has declined by a significant 41% compared to the corresponding quarter in FY2000 (i.e. 1QFY00).

But this decline in turnover is not because it faced difficult market conditions. But the decline in turnover is because the company sold off its gas compressor business during this quarter. As a result, its turnover declined, but so did its expenditure (down by 35%). This however, adversely affected its operating margins.

(Rs m) 1QFY00 1QFY01 Change
Sales 1,145 679 -40.6%
Other Income 32 46 43.6%
Expenditure 932 603 -35.3%
Operating Profit (EBDIT) 213 76 -64.1%
Operating Profit Margin (%) 18.6% 11.2%  
Interest 1 0 -85.7%
Depreciation 18 15 -13.6%
Profit before Tax 227 108 -52.5%
Other Adjustments   394  
Tax 81 24 -70.5%
Profit after Tax/(Loss) 145 478 228.7%
Net profit margin (%) 12.7% 12.3%  
No. of Shares (eoy) (m) 31.6 31.6 84.0
Earnings per share*      
*(annualised)     -42.2%

The sale of its gas compressor business, resulted in an extraordinary profit of Rs 441 m. Ingersoll paid off Rs 47 m as VRS expenses to trim its workforce. All this resulted in a 229% surge in its bottomline to Rs 478 m. But in real terms (i.e. including only operational profits) its net profit actually declined by 42% to Rs 84 m. However, its actual net profit margin (excluding profit on sale of gas compressors) saw a marginal decline.

All in all, the company did not perform badly in terms of operations. But now, since Ingersoll's major restructuring is now over, all eyes will be on its 2nd quarter performance.

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 (Research Analyst) bearing Registration No. INH000000537 (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, Canada or the European Union countries, 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 (Research Analyst)
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