Meghmani Organics Ltd. |Q2FY15 Result Update | Above expectation performance; Maintain BUY with target price of Rs.34… :: IndiaNivesh

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 MOL’s Q2FY15 result was above our estimates on all fronts. Revenue went up
17.4% Y/Y to Rs.3,826 mn (v/s INSPL Est. Rs.3,640 mn). The revenue growth
was driven by Basic Chemicals (47.0% Y/Y), Agrochemicals (30.7% Y/Y), and
Pigment (+8.2% Y/Y) segments, partially offset by 24.6% Y/Y decline in others
revenue.

 Depreciation during the quarter declined to Rs.156 mn from Rs.193 mn in
Q2FY14 on back change in depreciation policy from straight-line to written
down method. The change in the depreciation was due to comply with the
new accounting standards. The company reported other income of Rs.9mn
(v/s Rs.6 mn in Q2FY14). Interest rate during the quarter stood at Rs.197 mn
(v/s Rs.158 mn in Q2FY14). Tax rate stood at 19.8% (v/s 48.5% in Q2FY14)
leading to tax outgo of Rs.43 mn (v/s Rs.95 mn in Q2FY14). During the quarter,
the company reported the negative minority interest of Rs.75mn (v/s +Rs.17
mn in Q2FY14). The negative minority interest was due to the declaration of
dividend by Meghmani Finechem Ltd (subsidiary-52%) in 1HFY15.
 Adjusting the minority benefit, Adj.PAT stood at Rs.100 mn (v/s Rs.84 mn in
Q2FY14), which is largely in-line with our estimate.

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