Manufacturer and exporter of Industrial Chemicals Atul Ltd saw around 23 percent fall on net profit in fourth quarter. Gopi Kannan, President Finance, Atul Ltd said that it was on account of other expenses, which went up from Rs 59 crore to Rs 81 crore during the quarter.
He believes that the company is actually too small to be affected in a very big way on account of what is happening in Europe or US etc. He is very positive about the current year 13-14 and sees at least 12-15 percent growth in sales. He also hopes that the EPS (earning per share) will improve
Below is the verbatim transcript of his interview to CNBC-TV18
Q: Let me start with the net profit because quite clearly there is a bit of a drop that you have seen on net profit this time around – about 23 percent fall on net profit- can you explain the one offs which have impacted your numbers because sales have gone up 10 percent?
A: Year on year basis, the profits have gone up by 54 percent.
Q: On sequential numbers?
A: Sequential, in fourth quarter we have sold Rs 51 crore more, which is 12 percent higher than Q3 and the gross margins were a tad better in Q4. The net profit saw a decline mainly on account of, if one sees other expenses, they went up from Rs 59 crore to Rs 81 crore during the quarter – a growth of Rs 22 crore. This is what is affecting the net profit, the bottom-line. This Rs 22 crore included certain one time item, non-recurring item.
For example, we spent Rs 4 crore on registration because registration is compulsory for chemicals beyond a threshold level of each chemical. We earlier had registered for many products, but now we have done for more products, whose benefits will recur in future, does not relate to Q4. Then we took some decisions on non moving inventory at the fag end of Q4. So some provisioning is also there. There were some banking differences also due to certain errors in accounting; certain expenses of third quarter and second quarter got booked only in Q4.
Q: How do you expect things to pan out in the current quarter and current year – since you have been opening offices in several countries abroad? Do you see a growth in volume of business – can you give us some guidance on both the volume of business as well as margins?
A: Yes. We are quite positive about the current quarter. It will certainly be better than Q4 we hope. For the entire year also we see a growth. We are actually too small to be affected in a very big way on account of what is happening in Europe or US etc. Our exports were just Rs 1,000 crore a drop as far as international market is concerned.
We tell our people that we can always push these and if that does not happen it is only going to be due to internal factor. We are positive about the current year 13-14 and we do see volume growth and profit growth coming in.
Q: You ended the year with an earnings per share of Rs 45 against Rs 30- so that is a very smart growth for the full year. For FY14 what kind of EPS estimates can the market assume?
A: Very difficult to give a number and we never give any guidance in that sense. It ought to be better. We see at least 12-15 percent growth in sales and the EPS will improve