Monolithic biz, MTM loss drag Sintex Q1 cons net down 51%
Sintex Industries' consolidated net profit for the first quarter slumped more-than-expected 51% year-on-year to Rs 47 crore due to a drop in sales and mark-to-market (MTM) loss. The company's monolithic business also continues to be a drag due to tough business environment.
July 13, 2012 / 17:28 IST
Moneycontrol Bureau
Sintex Industries' consolidated net profit for the first quarter slumped more-than-expected 51% year-on-year to Rs 47 crore due to a drop in sales and mark-to-market (MTM) loss. The company's monolithic business also continues to be a drag due to tough business environment.Consolidated net sales of the company, which makes plastic products like water tanks and textiles, were, however, down lower-than-expected 3% from a year ago to Rs 1,076.4 crore.Analysts on average had expected Sintex to report net profit of Rs 62 crore on revenue of Rs 977 crore, according to a CNBC-TV18 poll. "Its been a quarter of consolidation as we experience changing dynamics in the external environment...The external environment is not very conducive for monolithic business growing aggressively, we are looking at site wise issues and improve efficiencies at all levels. It will take couple of quarters before it comes back on growth trajectory," said Amit Patel, MD.During the quarter, Sintex had a foreign exchange loss of Rs 29 crore on long term foreign currency monetary items.It also had a lower other income of Rs 4.2 crore, compared with Rs 17 crore other income in the year ago quarter.In its key segments, sales from textiles rose to Rs 110 crore from Rs 109 crore in the year ago quarter. Sales of building materials were Rs 451.5 crore, down 5% and custom molding sales fell 2% to Rs 515.4 crore."The building material business is largely dominated by prefabricated structures and monolithic construction. The current slowdown in government activity has impacted the monolithic segment, couple of sites going slow on execution has impacted the margins as well as growth in the segment," the company said.Sintex's overall operating profit margin declined to 16.4% from 17%.Further, Sintex said, due to the recessionary conditions prevailing in the Euro zone, global subsidiaries are facing slower growth, which has led to lower utilizations.It said, "consistent efforts" are on to increase utilization across geographies and so the business is expected to stabilise from the second quarter.Sintex shares closed up 3% at Rs 66.60 on NSE on Friday. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
