During the September quarter, Sintex Industries Ltd benefited from lower input costs in its plastics business, but its product prices declined too, affecting turnover growth. The plastics business grew in volume terms, but falling commodity prices hit realizations. Both its key businesses—plastics which contributed 86% to its consolidated Rs3,060 crore turnover and textiles which contributed 12%—reported declines in sales.
Sintex’s consolidated operating income fell by 2.5% to Rs715 crore in the September quarter, over the previous corresponding period.
Raw material consumption declined by 0.2%, indicating that input costs did not decline as much as revenues did. But it reined in other expenditure and retained operating profit margin at the 18.2% mark. If net profit declined by a steep 22%, it was due to a 78% decline in other income and an 18% increase in depreciation, which was offset by a 16% reduction in interest costs.
The textile division’s sales fell by 14% to Rs76 crore during the quarter. Its segment profit (after depreciation but before interest and tax) fell a steep 80% to Rs2.9 crore.
The plastics division’s sales were just 1% lower at Rs639 crore, while its segment profit was down by 11%. The sub-segments of building material sales grew by 1.2% while custom moulding’s revenues was unchanged. Both sub-segments have done better versus the June quarter, and if the trend continues, will perhaps see an improved performance in the second half. The share price is up by 8.4% over a month ago and fell by just 1.4% on Monday to Rs249, not reacting to the sharp drop in its reported net profit.
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