Capitaline

Results 03-Aug-24

Analysis

Savita Oil Technologies

Higher freight rates and softening raw material prices impacted profitability

Consolidated net sales (including other operating income) of Savita Oil Technologies has increased 3.82% to Rs 955.5 crore. The company reported double digit volume growth in transformer fluids and lubricant divisions in Q1’25. International Business was impacted by ongoing logistic challenges with severe container shortages and soaring freight rates.

Sales of Petroleum Products segment has gone up 3.73% to Rs 950.23 crore (accounting for 99.23% of total sales). Sales of Wind Power segment has gone down 10.34% to Rs 7.36 crore (accounting for 0.77% of total sales).

Profit before interest, tax and other unallocable items (PBIT) has slumped 31.44% to Rs 51.89 crore. PBIT of Petroleum Products segment fell 32.29% to Rs 48.71 crore (accounting for 93.86% of total PBIT). PBIT of Wind Power segment fell 15.17% to Rs 3.18 crore (accounting for 6.14% of total PBIT).

PBIT margin of Petroleum Products segment fell from 7.85% to 5.13%. PBIT margin of Wind Power segment fell from 45.72% to 43.26%. Overall PBIT margin fell from 8.19% to 5.42%.

Operating profit margin has declined from 7.50% to 4.94%, leading to 31.61% decline in operating profit to Rs 47.19 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 81.77% to 83.18%. Purchase of finished goods cost fell from 0.52% to 0.09%. Employee cost increased from 2.29% to 2.56%. Other expenses rose from 8.00% to 9.28%.

Other income fell 0.47% to Rs 17.01 crore. PBIDT fell 25.43% to Rs 64.2 crore. Provision for interest fell 16.90% to Rs 7.08 crore.

PBDT fell 26.36% to Rs 57.12 crore. Provision for depreciation rose 23.93% to Rs 5.8 crore.

Profit before tax down 29.59% to Rs 51.32 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 11.48 crore, compared to Rs 17.25 crore. Effective tax rate was 22.37% compared to 23.67%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company decreased 28.40% to Rs 39.84 crore.

Promoters’ stake was 68.92% as of 30 June 2024 ,compared to 71.92% as of 30 June 2023 .

The Board of Directors at its meeting held on 3rd August, 2024 has approved buyback of up to 540,000 equity shares (face value Rs. 2/- each) @ Rs.675/- per share aggregating to Rs.44.94 crores (inclusive of tax of Rs.8.49 crores).

Commenting on the performance Mr. Gautam N. Mehra, Chairman and Managing Director, said – "We are pleased to report a quarterly performance with a total income of Rs.973 crores, marking a 4% growth on a YoY basis. Overall sales volumes were steady for the quarter. We had healthy double-digit growth both in Transformer oil as well as Lubricating Oil divisions on a QoQ basis.

Some impact on profitability is a result of soaring freight and challenges in the international markets, softening raw material prices towards the end of the quarter and our continued investment in brand and marketing to support the launch of our new automative range.

We are seeing green shoots and positive responses to the launch of our revolutionary ester based lubricant series Ester5 across Retail, OEMs as well as Industrial customers. We remain steadfast in building Savsol Ester 5 as technology leader in the automotive lubricant market and continue to invest in our product, brand and the development of a wider range of ester molecules for varied advance applications to meet the growing demand both in India and the global market.”

Full year results analysis

Net sales (including other operating income) of Savita Oil Technologies has increased 3.04% to Rs 3740.85 crore. Sales of Petroleum Products segment has gone up 3.35% to Rs 3,726.36 crore (accounting for 99.12% of total sales). Sales of Wind Power segment has gone down 4.28% to Rs 33.00 crore (accounting for 0.88% of total sales).

Profit before interest, tax and other unallocable items (PBIT) has slumped 19.73% to Rs 281.93 crore. PBIT of Petroleum Products segment fell 20.71% to Rs 265.71 crore (accounting for 94.25% of total PBIT). PBIT of Wind Power segment rose 0.54% to Rs 16.22 crore (accounting for 5.75% of total PBIT).

PBIT margin of Petroleum Products segment fell from 9.29% to 7.13%. PBIT margin of Wind Power segment rose from 46.79% to 49.15%. Overall PBIT margin fell from 9.65% to 7.50%.

Operating profit margin has declined from 9.25% to 6.78%, leading to 24.53% decline in operating profit to Rs 253.45 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 76.55% to 82.45%. Purchase of finished goods cost fell from 4.23% to 0.29%. Employee cost increased from 2.13% to 2.26%. Other expenses rose from 7.94% to 8.24%.

Other income rose 210.55% to Rs 71.24 crore. PBIDT fell 9.50% to Rs 324.69 crore. Provision for interest rose 6.72% to Rs 37.79 crore. Loan funds declined from Rs 0.12 crore as of 31 March 2023 to Rs 0.07 crore as of 31 March 2024. Inventories rose to Rs 849.89 crore as of 31 March 2024 from Rs 828.66 crore as of 31 March 2023. Sundry debtors were higher at Rs 783.81 crore as of 31 March 2024 compared to Rs 749.88 crore as of 31 March 2023. Cash and bank balance rose to Rs 176.65 crore as of 31 March 2024 from Rs 59.04 crore as of 31 March 2023. Investments declined from Rs 325.71 crore as of 31 March 2023 to Rs 278.90 crore as of 31 March 2024.

PBDT fell 11.28% to Rs 286.9 crore. Provision for depreciation rose 12.48% to Rs 23.16 crore. Fixed assets increased to Rs 268.43 crore as of 31 March 2024 from Rs 198.56 crore as of 31 March 2023. Intangible assets declined from Rs 1.07 crore to Rs 1.05 crore.

Profit before tax down 12.89% to Rs 263.74 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 62.98 crore, compared to Rs 77.07 crore. Effective tax rate was 23.88% compared to 25.45%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company decreased 11.05% to Rs 200.76 crore.

Equity capital stood at Rs 13.82 crore as of 31 March 2024 to Rs 13.82 crore as of 31 March 2023. Per share face Value remained same at Rs 2.00.

Promoters’ stake was 68.92% as of 31 March 2024 ,compared to 71.92% as of 31 March 2023 .

Cash flow from operating activities has turned positive Rs 167.05 crore for year ended March 2024 from negative Rs 64.22 crore for year ended March 2023. Cash flow used in acquiring fixed assets during the year ended March 2024 stood at Rs 93.09 crore, compared to Rs 31.84 crore during the year ended March 2023. .

The scrip is currently trading at Rs 628

Savita Oil Technologies: Results
	2406 (03)	2306 (03)	Var.(%)	2403 (12)	2303 (12)	Var.(%)
Net Sales	955.5	920.32	4	3,740.85	3,630.44	3
OPM(%)	4.9%	7.5%		6.8%	9.3%
OP	47.19	69	-32	253.45	335.83	-25
Other Income	17.01	17.09	0	71.24	22.94	211
PBIDT	64.20	86.09	-25	324.69	358.77	-9
Interest	7.08	8.52	-17	37.79	35.41	7
PBDT	57.12	77.57	-26	286.90	323.36	-11
Depreciation	5.8	4.68	24	23.16	20.59	12
PBT	51.32	72.89	-30	263.74	302.77	-13
EO	0.00	0.00		0.00	0.00
PBT after EO	51.32	72.89	-30	263.74	302.77	-13
Total Tax	11.48	17.25	-33	62.98	77.07	-18
PAT	39.84	55.64	-28	200.76	225.70	-11
PPI	0.00	0.00		0.00	0.00
PAT after PPI	39.84	55.64	-28	200.76	225.70	-11
EPS*	#	#		29.1	32.7
* Annualized On Current Equity Of Rs 13.82 Crore of face value of Rs 2 each
#EPS not annualised due to seasonality of business, PPI: Prior Period Item
EO: Extraordinary Items, PL: Profit to Loss, LP: Loss to Profit
EPS Is Calculated After Excluding EO And Relevant Tax
Figures In Rs Crore
Source: Capitaline Database

Savita Oil Technologies : Consolidated Segment Results
	% of (Total)	2406 (03)	2306 (03)	Var.(%)	% of (Total)	2403 (12)	2303 (12)	Var.(%)
Sales
Petroleum Products	99	950.23	916.1	4	99	3,726.36	3,605.49	3
Wind Power	1	7.36	8.21	-10	1	33	34.48	-4
Total Reported Sales	100	957.59	924.31	4	100	3759.36	3639.97	3
PBIT
Petroleum Products	94	48.71	71.94	-32	94	265.71	335.11	-21
Wind Power	6	3.18	3.75	-15	6	16.22	16.13	PL
Total PBIT	100	51.89	75.69	-31	100	281.93	351.24	-20
Less : Interest		7.08	8.52	-17		37.78	35.41	7
Add: Other un-allcoable		6.51	5.72	14		19.6	-13.07	LP
PBT		51.32	72.89	-30		263.75	302.76	-13

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