Very good results posted for Jun’22 quarter with a growing topline and a stable profit which was a fraction short of 12 Cr that I expected.
Following are some observations that I noticed:
a. 4 Cr CAPEX last financial year on machineries seems to have started yielding results which are way more than its CAGR from Mutual Funds. Dollar strength also must have had its role for increase in sales.
b. Operating returns continues to be maintained at healthy rate of 34%. Could be again a mix of reasons like Dollar strength result in net currency gains, company being able to pass on the impact on input cost fluctuations, manufacturing efficiencies due to machineries upgrade.
c. 1.11 Cr Other income for Jun’22 cannot be compared with 10.16 reported for FY22 which included 7.64 Cr gains on redemption of Mutual Funds. On QoQ / YoY basis.
d. 8.29 Cr Mutual Funds notional loss for Q1 (not counted for PAT) has more than reversed at its current NAV (assuming the units held as of 31st Mar are not sold) with effective gains of 3 Cr.
e. Q1 profits historically have been lower than remaining quarters of the year. On this basis, we can expect current year’s profits exceeding TTM net profit of 42.2 Cr. Recession scenarios playing in Europe / US can only stand in the way of this.
With general market already in a buoyant mood, we can expect the stock price continuing its catch up action with stronger results.
Disc: Invested
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