HEG Announces Quarterly Results (1QFY20); Net Profit Down 69.6%

Wed, 21 Aug

HEG has announced its results for the quarter ended June 2019. Here is a detailed performance review of the same:

HEG Quarterly Financials

No. of Mths Qtr. Ending		3 Jun-18*	3 Mar-19*	3 Jun-19*	QoQ Change	YoY Change
Net Sales	Rs m	15,874	13,467	8,165	-39.4%	-48.6%
Other income	Rs m	80	423	392	-7.4%	392.6%
Turnover	Rs m	15,953	13,889	8,557	-38.4%	-46.4%
Expenses	Rs m	3,994	5,587	4,687	-16.1%	17.4%
Gross profit	Rs m	11,880	7,880	3,478	-55.9%	-70.7%
Depreciation	Rs m	176	182	177	-2.6%	0.9%
Interest	Rs m	17	59	93	57.8%	431.6%
Profit before tax	Rs m	11,766	8,062	3,600	-55.3%	-69.4%
Tax	Rs m	4,063	2,818	1,256	-55.4%	-69.1%
Profit after tax	Rs m	7,703	5,244	2,344	-55.3%	-69.6%
Gross profit margin	%	74.8	58.5	42.6
Effective tax rate	%	34.5	35.0	34.9
Net profit margin	%	48.3	37.8	27.4

Year-on-Year Performance:

• The company's operating income during the quarter fell 48.6% on a year-on-year (YoY) basis. The expenses were up by 17.4% YoY during the same period.
• The company's operating profit declined by 70.7% YoY during the quarter. Consequently, operating profit margins witnessed a decline and stood at 42.6% in 1QFY20 as against 74.8% in 1QFY19.
• Depreciation charges increased by 0.9% and finance costs increased by 431.6% YoY, respectively.
• Other income increased by 392.6% YoY during the quarter.
• Net profit for the quarter declined by 69.6% YoY. Net profit margins during the quarter declined from 48.3% in 1QFY19 to 27.4% in 1QFY20.

Quarter-on-Quarter Performance:

• The company's operating income during the quarter fell 39.4% on a quarter-on-quarter (QoQ) basis. The expenses were down by 16.1% QoQ during the same period.
• The company's operating profit declined by 55.9% QoQ during the quarter. Consequently, operating profit margins witnessed a decline and stood at 42.6% in 1QFY20 as against 58.5% in 4QFY19.
• Net profit for the quarter declined by 55.3% QoQ, while net profit margins declined from 37.8% in 4QFY19 to 27.4% in 1QFY20.

To see how HEG has performed over the last eight quarters,please visit here.

HEG Share Price Performance

Over the last one year,HEG share price has moved down from Rs 4,184.2 to Rs 973.8, registering a Loss of Rs 3,210.4 or around 76.7%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 16,933.1 (down 0.5%). Over the last one year it has moved down from 18,572.4 to 16,933.1, a gain of 1,639 points (down 8.8%).

Overall, the S&P BSE SENSEX is down 2.4% over the year.

Current Valuations

At the current price of Rs 973.8, the price to earnings (P/E) ratio of HEG stands at 1.7 times its trailing twelve months earnings, while its price to book value (P/BV) ratio stands at 1.1 times.