NAVIN FLOURINE

This Gujarat based Arvind Mafatlal group company is one of the largest players in carbon credits. It posted a set of very muted numbers for Q2FY13. YoY, though this is seasonally the time when refrigerants business usually witnesses sluggish demand; but even after accounting for that, topline, slid 28% at Rs.138 crore. Of this, Rs.23 crore came in via sale of carbon credits, up 9% sequentially. But YoY, it fell sharply by 70%. Consequently, net profit for the quarter was at Rs.19 crore, down 68% (YoY). NPM has come down from 30.63% to 13.77%.

Looking ahead, revenue from carbon credits is expected to only come down further. As such QoQ, price has come down from Eur 3.7/CER to EUR 1.2/CER. And we could see a rush to sell some United Nations emission credits before they become almost worthless in 2013 and this prices are expected to hit record lows. Thus in H2FY13, prices will remain weak which in turn will affect overall margins. One can expect lower topline and bottomline in second half unless the company manages to ramp up volumes to such an extent that it offsets the lower prices.