• JULY 27, 2001

Carrier net profit fall 75%

Carrier Aircon, the air conditioners major, has reported yet another disappointing performance. Net pProfit in the first quarter of the current financial year has fallen by 74.9% to Rs 26 m on the back of a 4.1% drop in sales to Rs 1,450 m.

(Rs m)1QFY011QFY02Change
Sales 1,512 1,450 -4.1%
Other Income 3 24 763.0%
Expenditure 1,363 1,413 3.7%
Operating Profit (EBDIT) 149 37 -75.0%
Operating Profit Margin (%)9.9%2.6% 
Interest 11 12 14.9%
Depreciation 15 19 28.9%
Profit before Tax 127 31 -75.9%
Tax 25 5  
Profit after Tax/(Loss) 102 26 -74.9%
Net profit margin (%)6.7%1.8% 
No. of Shares (eoy) (m) 23.4 23.4  
Diluted number of shares 23.4 23.4  
Earnings per share (Rs)* 17.4 4.4  

Since the first quarter i.e. April-June 2001 is the peak season for air conditioner companies, sales tends to be on the higher side. However, Carrier seems to have failed to capitalise on its brand and the entry of multinationals has further alleviated the problems for the company. The margins in the first quarter have fallen drastically to 2.6% in 1QFY02 from 9.9% in the corresponding quarter of the previous year. Though raw material costs have come down by 2.3%, higher other expenses and rise in stock-in-trade have been the core reason behind this sharp fall. The company has changed its accounting policy by including float stock of compressors as stock-in-trade, which were treated as fixed assets.

Meanwhile, Carrier International Mauritius Limited, an indirect subsdiary of Carrier Corporation (USA), has made an open offer to the public to acquire the balance 49% of the paid-up capital of the company.

The scrip is currently trading at Rs 85 at a P/E multiple of 19.4x the annualised 1QFY02 earnings.

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