BackUnited Phosphorus Q2 net halves, shares fall
United Phosphorus Q2 net halves, shares fall
PremiumMumbai: Higher interest costs and foreign exchange losses halved the September-quarter profit of United Phosphorus despite a substantial surge in sales.
Shares of the agro-chemicals maker fell nearly 6% on the quarterly numbers.
The Mumbai-based company’s consolidated net profit fell to ₹ 569.5 million against ₹ 115 crore over the same period last year.
The consolidated sales jumped 40.5% on-year to ₹ 1,721 crore it said.
The chemical maker’s interest and finance cost, which includes the forex losses, nearly tripled to ₹ 192 crore in the quarter, while it also reported one-time loss of ₹ 143.5 million, it said.
“Other than the forex losses, results are exceptionally good. Sales have surged and EBITDA at 325 crore (Rs 325 billion), is above expectations," Tarun Surana, analyst at Sunidhi Securities & Finance, told Reuters over the telephone.
The healthy growth trend is expected to continue for the company, Surana said, who has a ‘buy´ rating on the stock with a target price of ₹ 204 for FY13.
“Forex loss is just a technical aspect and it would eventually get reversed later," another fertiliser analyst with a Mumbai-based brokerage said.
“With rising crop acreage and a better winter season ahead, the growth momentum looks good for the firm."
Area under summer-sown crops in India rose to 105.66 million hectares as on 7 October, compared to 102.85 million hectares a year ago, data from the federal farm ministry showed.
At 1:26pm, shares of United Phosphorus, which have shed more than 9% in value in the last 6 months, were trading at ₹ 140.05, down 3.71% in a choppy Mumbai market .
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