Sintex Q2: Analysts see 100% growth in PAT at Rs 77.7 cr

Plastic products manufacturer Sintex Industries is set to announce its second quarter results of financial year 2012-13 today. Analysts on an average expect the consolidated profit after tax to grow by 100 percent year-on-year and 66 percent quarter-on-quarter to Rs 77.7 crore in the quarter ended September 2012.

The reason behind huge growth is the low base in corresponding quarter of last fiscal. In second quarter of previous financial year, the company had incurred a forex loss of Rs 59.61 crore on its foreign currency convertible bonds (FCCBs); after adjusting for this loss, the PAT for last year was Rs 98.4 crore.

Forex losses on account of FCCBs for the April-June quarter of 2012 stood at Rs 28.9 crore; therefore adjusted PAT for the previous quarter was at Rs 75.7 crore.

Consolidated total income is expected to go down by 5 percent to Rs 1,099 crore from Rs 1,157 crore year-on-year while on QoQ basis it is seen going up by 2 percent.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to go down by 14 percent YoY and 1 percent QoQ to Rs 177 crore.

Consolidated operating profit margin is seen declining by 160 basis points year-on-year and 30 basis points quarter-on-quarter at 16.1% in the quarter ended September 2012.

Analysts expect muted performance for this quarter as well.

Monolithic business has been a drag on the company’s performance. Analysts expect pressures to continue in the monolithic and custom moulding business segments.

Sintex continues to face various problems at 7 out of 19 sites operational in its monolithic division while it has seen some improvement in approval process and expects full clarity on stalled sites by Q3FY13, say experts.

Impact of slowdown in US/EU markets is hurting its subsidiaries. Recently the management said they expect things should start looking up by Q3 and Q4 FY13 because of the sensitivity of the elections etc.

Analysts feel the performance of most other verticals like tanks, pre fabs, textiles etc is expected to remain stable. Textile business performance suffered in June quarter due to increase in chemicals & energy costs.

Clarity on FCCB funding remains the key issue for the company, say experts. Sintex has to redeem FCCBs worth USD 285 million in March 2013; out of which USD 110 million is unutilized.

Sintex plans to fund the balance with a mix of ECBs and internal accruals.

Q1FY13 results reasonable strong

The company had posted posted a healthy set of numbers after many quarters despite continued slowdown in two of its key business segments.