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D i s a p p o i n t i n g B r a z i l i a n o p e r a t i o n s …
Shree Renuka Sugars Ltd (SRSL) reported disappointing Q4FY12 results.
The company’s consolidated topline remained flat at | 2355.4 crore
against | 2484.5 crore in Q4SY10. Margins came in lower at 10.5%,
compared to 13.9% in Q4SY10, on the back of higher employee and
operating costs. The interest cost and depreciation also witnessed a
substantial jump of 63.6% YoY to | 192.5 crore and 53% YoY to | 225.1
crore, respectively. However, the noteworthy item in the company’s
Q4FY12 results was the accounting of the foreign exchange loss of |
569.8 crore. Consequently, the earnings were severely impacted and
SRSL reported a loss of | 615.8 crore against a profit of | 139.9 crore in
Q4SY10.
ƒ Standalone performance
SRSL’s standalone net sales for the quarter declined 22.1% to | 1145.8
crore vs. |1473.1 crore in Q4SY10. In spite of declining sales and lower
raw material costs, 82% of net sales compared to 88.8% in Q4SY10,
helped the margins to improve slightly. Margins in Q4FY12 stood at 2.5%
against 0.7% in Q4SY10. However, a higher interest cost of |40.9 crore
(~2x higher than Q4SY10) and the foreign exchange loss of |72.8 crore
dragged the bottomline of SRSL in Q4FY12, hence the company reported
a loss of |57.3 crore against a profit of |8.1 crore in Q4SY10.
V a l u a t i o n
We believe stock would languish for next 3-6 months due to overhang of
Brazilian operations. Though spinning off of the Brazilian co-generation
assets could bring some respite to the debt levels. However, huge debt
on the books keeps us cautious on company’s debt to equity levels. We
recommend our investors to avoid fresh buying until further clarity by the
company is received on reduction of the debt levels.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
D i s a p p o i n t i n g B r a z i l i a n o p e r a t i o n s …
Shree Renuka Sugars Ltd (SRSL) reported disappointing Q4FY12 results.
The company’s consolidated topline remained flat at | 2355.4 crore
against | 2484.5 crore in Q4SY10. Margins came in lower at 10.5%,
compared to 13.9% in Q4SY10, on the back of higher employee and
operating costs. The interest cost and depreciation also witnessed a
substantial jump of 63.6% YoY to | 192.5 crore and 53% YoY to | 225.1
crore, respectively. However, the noteworthy item in the company’s
Q4FY12 results was the accounting of the foreign exchange loss of |
569.8 crore. Consequently, the earnings were severely impacted and
SRSL reported a loss of | 615.8 crore against a profit of | 139.9 crore in
Q4SY10.
ƒ Standalone performance
SRSL’s standalone net sales for the quarter declined 22.1% to | 1145.8
crore vs. |1473.1 crore in Q4SY10. In spite of declining sales and lower
raw material costs, 82% of net sales compared to 88.8% in Q4SY10,
helped the margins to improve slightly. Margins in Q4FY12 stood at 2.5%
against 0.7% in Q4SY10. However, a higher interest cost of |40.9 crore
(~2x higher than Q4SY10) and the foreign exchange loss of |72.8 crore
dragged the bottomline of SRSL in Q4FY12, hence the company reported
a loss of |57.3 crore against a profit of |8.1 crore in Q4SY10.
V a l u a t i o n
We believe stock would languish for next 3-6 months due to overhang of
Brazilian operations. Though spinning off of the Brazilian co-generation
assets could bring some respite to the debt levels. However, huge debt
on the books keeps us cautious on company’s debt to equity levels. We
recommend our investors to avoid fresh buying until further clarity by the
company is received on reduction of the debt levels.
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