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Friday, May 23, 2008

CM ANALYSIS: Phoenix Lamps - Sparkling growth (Wednesday, May 21, 2008 14:29 Hrs IST)

Phoenix Lamps

Sparkling growth

For the quarter ended Mar'08 the net sales revenue of Phoenix Lamps stood at Rs 98.85 crore which was 39% higher as compared to corresponding period last year. The OPM Increased by sharply by 590 basis points to 20.5%. The resultant operating profit for the quarter under review stood at Rs 20.28 crore which was 96% higher on Y-o-Y basis. The ensuing PAT for the quarter under review stood at Rs 14.80 crore which was 52% higher on Y-o-Y basis.

Quarterly Analysis

For the quarter ended Mar'08 the net sales revenue of Phoenix Lamps stood at Rs 98.85 crore which was 39% higher as compared to corresponding period last year. The OPM Increased by sharply by 590 basis points to 20.5%. The resultant operating profit for the quarter under review stood at Rs 20.28 crore which was 96% higher on Y-o-Y basis.

The employee cost and other expenditure cost decreased (as % of sales net of stock adjustment) from 9.1% to 7.9% and from 20.2% to 16.8% respectively. The Cost of Consumption of Raw Materials increased (as % of sales net of stock adjustment) from 55.8% to 56.7%. During the quarter under review there was Purchase of traded goods was Rs 0.21 crore as compared nil during the corresponding previous quarter last year.

For the quarter ended Mar'08 other income of the company increased by 146% to Rs 1.84 crore. The ensuing PBIDT for the quarter ended Mar'08 was Rs 22.12 crore which was 100% higher as compared to the corresponding previous quarter last year. The Interest cost for the quarter ended Mar'08 stood at Rs 2.34 crore which was 39% higher when compared with corresponding period last year. The depreciation expenses for the quarter ended Mar'08 remained flat at Rs 2.76 crore.

The ensuing PBT for the quarter ended Mar'08 stood at Rs 17.02 crore which was 156% higher when compared with corresponding period last year. Provision for taxation (including current tax, deferred tax, fringe benefit tax, Mat Credit entitlement and Earlier period) for the quarter ended Mar'08 stood at Rs 2.21 crore (as against a Tax credit of Rs 3.10 crore during the corresponding period last year) resulting in a PAT of Rs 14.80 crore for the quarter ended Mar'08 as against Rs 9.75 crore in corresponding previous quarter last year, indicating a rise of 52%.

Year ended

For the year ended Mar'08 the net sales revenue of Phoenix Lamps stood at Rs 356.65 crore which was 28% higher as compared to corresponding period last year. The OPM Increased by by 230 basis points to 18.6%. The resultant operating profit for the year under review stood at Rs 66.43 crore which was 46% higher on Y-o-Y basis.

The employee cost and other expenditure cost decreased (as % of sales net of stock adjustment) from 8.9% to 7.8% and from 19.0% to 16.5% respectively. The Cost of Consumption of Raw Materials increased (as % of sales net of stock adjustment) from 55.5% to 57.8%.

For the year ended Mar'08 other income of the company increased by 38% to Rs 3.84 crore. The ensuing PBIDT for the quarter ended Mar'08 was Rs 70.27 crore which was 46% higher as compared to the corresponding previous quarter last year. The Interest cost for the year ended Mar'08 stood at Rs 7.15 crore which was 1% lower when compared with corresponding period last year. The depreciation expenses for the year ended Mar'08 stood at Rs 11.11 crore, which was 3% higher when compared with corresponding period last year.

The ensuing PBT for the year ended Mar'08 stood at Rs 52.00 crore which was 72% higher when compared with corresponding period last year. Provision for taxation (including current tax, deferred tax, fringe benefit tax, Mat Credit entitlement and Earlier period) for the year ended Mar'08 stood at Rs 3.93 crore (as compared to a Tax credit of Rs 2.43 crore during the corresponding period last year) resulting in a PAT of Rs 48.08 crore for the year ended Mar'08 as against Rs 32.64 crore in corresponding period last year, indicating a rise of 47%. During the year under review there was Prior Period Adjustments (Net) of Rs 0.07 crore when compared with Rs 1.16 crore during the corresponding period last year. The ensuing PBT after Prior Period Adjustments (Net) stood at Rs 48.00 crore as compared to Rs 31.47 crore during the corresponding period last year indicating a rise of 53%.

Highlights:

  • Company is riding high on the increased production with the start of the Haridwar facility.
    • Enters new strategic markets for auto exports
  • Better realizations through backward and forward integration
  • Company successfully implemented SAP ERP solution

Other highlights

With regard to auditor's observation regarding charging of Rs 8.718 crore to reserves and surplus of the company, this is charged so, as the same is being given to the employees as special incentive in recognition of their services.

The implementation of SAP ERP system has resulted in the change of valuation method for inventories other than finished goods from FIFO basis to transaction moving weighted average.The impact of such change is not significant.

The Company has adopted Accounting Standard 15 (Revised 2005) "Employee Benefit" during the year. In accordance with the revised accounting standard, the transitional liablity amounting to Rs 1.8627 crore has been deducted from opening balance of general reserve.

The Board of Directors of the Company at its meeting held on May 19, 2008, inter alia, have took the following new initiatives and approved the following:

1. Formation of a subsidiary Company in India with majority shareholding of Phoenix for the manufacture of Electronic Gears under Joint Venture with a Foreign Company.

2. Joint Venture in Kuwait for marketing / manufacture of CFL Lamps and Luminaries with majority shareholding of Phoenix.

The scrip is currently trading around Rs 167.75

 

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