Results     10-Aug-22
Analysis
Gulshan Polyols
Expect EBITDA margin of 13-14% over FY 23-24
Gulshan Polyols standalone net sales increased 13.25% to Rs 270.18 crore in Q1FY23 compared to Q1FY22 backed by healthy growth across three segment. Sales of Mineral Processing segment has gone up 30.62% to Rs 24.30 crore (accounting for 8.99% of total sales).  Sales of Grain Processing segment has gone up 14.11% to Rs 200.58 crore (accounting for 74.24% of total sales).  Sales of Distillsry segment rose 2.98% to Rs 45.30 crore (accounting for 16.77% of total sales). 

Profit before interest, tax and other unallocable items (PBIT) has slumped 57.14% to Rs 15.20 crore.  PBIT of Mineral Processing segment rose 48.61% to Rs 3.68 crore (accounting for 24.24% of total PBIT).  PBIT of Grain Processing segment fell 54.96% to Rs 11.11 crore (accounting for 73.13% of total PBIT).  PBIT of Distillsry segment fell 95.19% to Rs 0.40 crore (accounting for 2.63% of total PBIT). 

PBIT margin of Mineral Processing segment rose from 13.33% to 15.16%.  PBIT margin of Grain Processing segment fell from 14.03% to 5.54%.  PBIT margin of Distillsry segment fell from 18.88% to 0.88%.  Overall PBIT margin fell from 14.87% to 5.62%. 

Operating profit margin has declined from 18.09% to 7.89%, leading to 50.59% decline in operating profit to Rs 21.32 crore primarily led by commodity cost headwinds faced by the industry on account of continued high inflation in the prices of basic raw materials, rice and maize. Further, global supply chain issues related to coal supply has also led to significant increase in power cost which impacted the margin. Raw material cost as a % of total sales (net of stock adjustments) increased from 49.60% to 58.16%.   Purchase of finished goods cost rose from 0.45% to 1.20%.   Employee cost decreased from 3.42% to 3.15%.   Other expenses rose from 28.61% to 29.62%.  

Other income up 14.63% to Rs 0.47 crore.  PBIDT fell 49.98% to Rs 21.79 crore.  Provision for interest up 32.93% to Rs 1.09 crore. 

PBDT fell 51.57% to Rs 20.7 crore.  Provision for depreciation down 6.74% to Rs 7.06 crore. 

Profit before tax down 61.22% to Rs 13.64 crore.  Provision for tax was expense of Rs 3.45 crore, compared to Rs 8.98 crore.  Effective tax rate was 25.29% compared to 25.53%.

Profit after tax fell 61.09% to Rs 10.19 crore. 

Promoters’ stake was 66.65% as of 30 June 2022 compared to 68.20% as of 30 June 2021. 

Commenting on the performance of Q1 FY23, Dr. Chandra Kumar Jain, Chairman and Managing Director, Gulshan Polyols Ltd. Said

“We are happy to share with you our financial and business performance for Q1 FY23, revenue from operations stood at Rs 270.18 crore showing a growth of 13.3% on YOY basis predominantly driven by good growth across our three business segment. We have managed to achieve good growth across all the three segment during the quarter.

In each of the segment we witnessed robust and satisfying demand. One of the key challenges faced by us during the quarter was the rising price of coal and other input costs. The global coal crisis has led to an increase in our power cost. Further, overall inflation headwinds impacted our basic raw material prices as well thereby putting stress on our EBITDA margins on a yearly basis. We expect the raw material related cost pressures to start easing out from third quarters onwards as we witness fresh harvesting of kharif crops and some respite in coal cost. Further, we continue to take steps in direction of sustaining and further improving our operating margins with operational efficiencies, capacity augmentation and upgradation in our Ethanol & Grain Processing segment.

Our grain processing segment is steadily recording an increased market share of our product offerings and increased utilization of our plant capacities. Specifically, our product, sorbitol (70%), maize starch and fructose syrup are market leaders and continue to show decent growth. We are continually adding newer products to market which are highly effective and efficient for their intended purposes. In view of robust demand and high product acceptance, we are on track of adding of around 20% capacities across facilities in this segment.

Our Ethanol manufacturing facility is running at an elevated capacity utilization of >100% owing to secular demand for ethanol as per the  government’s EBPP. We are also happy to share that we are on track in executing our capex plans for setting up of ethanol plant of 500 KLPD (expected to commence in FY23) and 250 KLPD (expected to commence in FY24) in Madhya Pradesh and Assam respectively. We envisage a capex of Rs 485 crore for the two facilities of which Rs 300 crore will be deployed in FY23 and the balance will be deployed by FY24. The Company has already entered in long term supply arrangement with OMCs for supply of ethanol from these plants after commercialization.

Our mineral processing segment despite being a stable business, continues to grow owing to our expertise in providing diversified and value-added solutions and services related to Wet Ground Calcium Carbonate (WGCC), Ground Calcium Carbonate (GCC) and on-site Precipitated Calcium Carbonate (PCC). The Contract with Meghna Pulp and Paper Mills Limited has helped us to establish a stronger foothold in the market.

Going ahead, our focus is to grow the EBITDA Margin by increasing contribution from higher margin products and by building cost efficiency through procurement and operational processes. Further, we will continue to broaden our product range by continually investing in value added products and R&D processes.

As we move forward in seizing the growth opportunities that lie ahead of us, we would like to thank our employees for their continuous efforts and our investors / stakeholders for their continued support and encouragement.”

Capex Updates

The company is undertaking a capex of Rs 4,85 crore for expanding capacities in the ethanol segment. Of this Rs 300 crore will be required to set up the 500 KLPD ethanol plant in the state of M.P. during FY23 and Rs 185 crore will be required for setting up 250 KLPD ethanol plant in the state of Assam over FY23 and FY24. The aforementioned capital expenditure is proceeding as planned.

In the grain processing segment, Company is expanding its aggregate capacities by around 20%. The budgeted capex for same is Rs 150 crore. The company is progressing well on the said capex.

Business Updates

The Oil Marketing Companies (OMCs) - HPCL, IOCL and BPCL have confirmed a six-month relief scheme from 1st June, 2022 to 30th November, 2022, to support the ethanol manufacturers challenged with high input cost, primarily on account of fuel and electricity. The relief is supportive of profit margins and reflects another show of positive intent of the OMCs to achieve objectives of ethanol blending program.

The company has signed a contract with Meghna Pulp & Paper Mills Limited for supplying GCC, GCC Coating plant, Vibrator Separating Machine with standard accessories and spare parts for USD 27,80,000. This will strengthen the Company’s position in the market.

Debt disbursed out of sanctioned amount of Rs 170 crore stands at Rs 46.9 crore. The major part of this was used for capex related to ethanol plant.

Guidance

Management is expecting a revenue of Rs 2300 crore by FY24 and Rs 28,00 crore by FY25, on back of significant capacity expansion in Ethanol segment.

The company is expected to have an EBITDA margin of around 13% to 14% over FY 23 & FY 24.

With the addition of capacities in the ethanol segment, the revenue mix will change. Currently, around 75% of the revenue is contributed by grain processing segment, about 18% from ethanol processing segment and balance 7% from mineral processing segment. After commissioning of new capacities, management is expecting around 50% revenue from ethanol segment and balance 50% from grain processing segment. The contribution from mineral processing segment will gradually decrease.

Full year results analysis

Net sales of Gulshan Polyols have increased 43.69% to Rs 1,100.73 crore.  Sales of Mineral Processing segment has gone up 1.86% to Rs 94.10 crore (accounting for 8.55% of total sales).  Sales of Grain Processing segment has gone up 49.62% to Rs 809.15 crore (accounting for 73.52% of total sales).  Sales of Ethanoi (Bio-Fuel)Distillery segment rose 48.68% to Rs 197.29 crore (accounting for 17.93% of total sales).

Operating profit margin has declined from 17.03% to 13.64%, leading to 15.10% rise in operating profit to Rs 150.12 crore.  Raw material cost as a % of total sales (net of stock adjustments) increased from 47.48% to 51.26%.   Purchase of finished goods cost rose from 0.62% to 0.85%.   Employee cost decreased from 3.78% to 3.30%.   Other expenses rose from 30.94% to 30.96%.  

Other income fell 21.46% to Rs 2.05 crore.  PBIDT rose 14.38% to Rs 152.17 crore.  Provision for interest fell 26.95% to Rs 4.96 crore.  Loan funds rose to Rs 111.96 crore as of 31 March 2022 from Rs 10.53 crore as of 31 March 2021.  Inventories rose to Rs 107.90 crore as of 31 March 2022 from Rs 90.45 crore as of 31 March 2021.  Sundry debtors were higher at Rs 119.62 crore as of 31 March 2022 compared to Rs 98.38 crore as of 31 March 2021.  Cash and bank balance rose to Rs 123.08 crore as of 31 March 2022 from Rs 19.93 crore as of 31 March 2021.  Investments rose to Rs 25.86 crore as of 31 March 2022 from Rs 0.90 crore as of 31 March 2021 . 

PBDT rose 16.60% to Rs 147.21 crore.  Provision for depreciation down 0.49% to Rs 32.41 crore.  Fixed assets increased to Rs 331.17 crore as of 31 March 2022 from Rs 246.62 crore as of 31 March 2021.  Intangible assets declined from Rs 0.09 crore to Rs 0.07 crore. 

Profit before interest, tax and other unallocable items (PBIT) has jumped 19.45% to Rs 118.73 crore.  PBIT of Mineral Processing segment fell 26.06% to Rs 12.79 crore (accounting for 10.77% of total PBIT).  PBIT of Grain Processing segment rose 22.77% to Rs 81.41 crore (accounting for 68.57% of total PBIT).  PBIT of Ethanoi (Bio-Fuel)Distillery segment rose 55.34% to Rs 24.53 crore (accounting for 20.66% of total PBIT). 

PBIT margin of Mineral Processing segment fell from 18.72% to 13.59%.  PBIT margin of Grain Processing segment fell from 12.26% to 10.06%.  PBIT margin of Ethanoi (Bio-Fuel)Distillery segment rose from 11.90% to 12.43%.  Overall PBIT margin fell from 12.98% to 10.79%. 

Profit before tax grew 22.54% to Rs 114.80 crore.  Provision for tax was expense of Rs 29.55 crore, compared to Rs 31.56 crore.  Effective tax rate was 25.74% compared to 33.69%.

Profit after tax rose 37.23% to Rs 85.25 crore. 

Equity capital increased from Rs 4.96 crore as of 31 March 2021 to Rs 5.20 crore as of 31 March 2022.  Per share face Value remained same at Rs 1.00. 

Promoters’ stake was 64.86% as of 31 March 2022 compared to 68.20% as of 31 March 2021. 

Cash flow from operating activities decreased to Rs 64.40 crore for year ended March 2022 from Rs 97.51 crore for year ended March 2021.  Cash flow used in acquiring fixed assets during the year ended March 2022 stood at Rs 117.02 crore, compared to Rs 14.65 crore during the year ended March 2021. 

The scrip is currently trading at Rs 240.

 

Gulshan Polyols : Standalone Results

Particulars

2206 (03)

2106 (03)

Var.(%)

2203 (12)

2103 (12)

Var.(%)

Net Sales

270.18

238.56

13

1100.73

766.03

44

OPM (%)

7.9

18.1

 

13.6

17.0

 

OP

21.32

43.15

-51

150.12

130.43

15

Other Inc.

0.47

0.41

15

2.05

2.61

-21

PBIDT

21.79

43.56

-50

152.17

133.04

14

Interest

1.09

0.82

33

4.96

6.79

-27

PBDT

20.7

42.74

-52

147.21

126.25

17

Depreciation

7.06

7.57

-7

32.41

32.57

0

PBT

13.64

35.17

-61

114.8

93.68

23

Taxation

3.45

8.98

-62

29.55

31.56

-6

PAT

10.19

26.19

-61

85.25

62.12

37

EPS (Rs)*

#

#

 

16.4

11.9

 

Notes

* EPS is on current equity of Rs 5.2 crore, Face value of Rs 1, Excluding extraordinary items.

# EPS is not annualised

bps : Basis points

EO : Extraordinary items

Figures in Rs crore

Source: Capitaline Corporate Database

 

 

Gulshan Polyols : Standalone Segment Results

 

% of (Total)

2206 (03)

2106 (03)

Var.(%)

% of (Total)

2203 (12)

2103 (12)

Var.(%)

Sales

Mineral Processing

9

24.3

18.6

31

9

94.1

92.37

2

Grain Processing

74

200.58

175.78

14

74

809.15

540.81

50

Distillery

17

45.3

43.99

3

18

197.29

132.7

49

Total Reported Sales

100

270.18

238.37

13

100

1,100.54

765.88

44

Less: Inter segment revenues

 

0

0

-

 

0

0

-

Net Sales

 

270.18

238.37

13

 

1,100.54

765.88

44

PBIT

Mineral Processing

24

3.68

2.48

49

11

12.79

17.29

-26

Grain Processing

73

11.11

24.67

-55

69

81.41

66.31

23

Distillery

3

0.4

8.3

-95

21

24.53

15.79

55

Total PBIT

100

15.2

35.45

-57

100

118.73

99.39

19

Less : Interest

 

1.09

0.82

33

 

4.96

6.79

-27

Add: Other un-allcoable

 

-0.47

0.53

PL

 

1.03

1.08

-4

PBT

 

13.64

35.17

-61

 

114.8

93.68

23

 

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 ( Corporate News - 12-Mar-24   17:12 )
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 ( Corporate News - 27-Oct-16   15:13 )
  Gulshan Polyols net profit rises 107.78% in the March 2013 quarter
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