Sintex Inds

Sintex Industries is a market leader in plastics and niche textile products in India, makes innovative building plastic products, custom mouldings and textiles. Plastics segment accounts for 90% of consolidated revenues, with balance from textiles. For Q1Fy15, the company posted a good set of numbers based on operational performance. Consolidated net sales for the quarter came in at Rs.134 crore, up19% (YoY) and it ended the quarter with a net profit at Rs.61 crore, up 33% (YoY) though down 62% sequentially. But QoQ too it’s a strong performance given the fact that bottomline in Q4 was higher on account of lower tax and much higher other income. This Q1, the company also had a forex loss of Rs.4 crore. YoY, its interest cost atv Rs.65 crore is up 51% (YoY) though down 39% (QoQ). Tax outgo for the quarter is up 25% (YoY) and up 47% (QoQ).

All the segments of the company have shown good growth, with revenue from plastics segment rising 13% (YoY), textiles rising 39% and infrastructure, which is affordable housing and EPC contract business rose by a smart 84%. EBITDA margin for the quarter rose by a good 110 bps at 15.4%. The company is putting up a spinning unit, with 1 lakh spindles and is expected to go on stream by March 2015 with the balance 2 lakh spindles to be commissioned by Sept’15. The only concern with the company is the debt – at end of FY14, net debt was around Rs.3700 crore and this ongoing spindle project is likely to add another Rs.1200-1300 crore by Sept 2015. The positive here, the spinning business will start generating revenue from FY15, while the focus on improving its working capital in monolithic business continues.