Himatsingka Seide

Himatsingka Seide, a home textile major, reported good set of numbers, with topline growth of 17% QoQ  and ~5% YoY, at Rs. 532 crores.Led by higher topline and better margins EBITDA rose 39% on YoY basis, with margin expansion of over 700 bps. PAT nearly doubled in Q2 as well, at Rs. 42 crores v/s Rs. 23 crores, resulting in EPS of Rs. 4.22 for Q2 and Rs. 8.73 for H1, which itself 86% of entire FY15 EPS of Rs. 9.69. In Q1 as well, PAT was seen nearly doubling to Rs. 40 crores.

The company’s efforts to improve margins are paying off well, led by increasing utilisation, recently availed Merchandise Exports from India Scheme (MEIS) benefits of 2% of revenue, stable cotton prices as compared to last year, and changed supplier working capital terms. However, margin declined on sequential basis due to higher operating costs. However, it will be interesting to see how numbers look like from Q1 FY17, when benefit of lower base effect will not be available.