Pennar Industries Ltd.|Q2FY15 Result Update :: India Nivesh

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Pennar Industries reported robust performance for Q2FY15. Company’s financial
performance was in-line with our estimates. Except steel products which remained
flat, all other segments of the company grew in the range of 8.4% to 88.8%. Led
by strong growth in systems/projects and PEBS business, top-line of the company
increased by 21.4% to Rs 2,892 mn. (vs our estimate of Rs 2,873 mn). On back of
margin expansion across segments EBITDA margin of the company increased by
56 bps to 8.4% (Same as our estimate). Tubes and Industrial components segments
EBITDA margin grew by 187 bps and 212 bps, respectively. EBITDA of the company
jumped by 30.1% to Rs 243 mn (vs our estimate of Rs 241 mn). Higher effective
tax rate (50.9%) for the quarter caused company net profit to grew at a lower
rate than EBITDA growth. As per company’s management higher tax rate in the
current quarter is mainly due to one off deferred taxes and effective tax rate is
likely to return to normal rate in coming quarters.Net profit of the company grew
at 8% to Rs 64 mn (vs our estimate of Rs 65 mn).
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