Companias
HINDALCO INDUSTRIES
Mixed Results
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Hindalco posted a splendid financial performance during 2004-05. Its net sales surged by 53 per cent to Rs 9,523 crore and net profit rose by 58 per cent to Rs 1,329 crore as compared to 2003-04. The aluminium business accounted for 55 per cent of the total revenues and the copper business contributed 45 per cent. The company recorded its highest production across all products of aluminium and its foreign exchange earnings rose by 101 per cent to Rs 2,607 crore during the year under review.
The Abu Dhabi National Foodstuff Company has signed an agreement with Hindalco to produce the Wrap ‘n’ Roll brand of aluminium foil rolls for distribution with the UAE. Hindalco recently acquired the assets of Hyderabad-based Pennar Aluminium Company (Palco) for an undisclosed amount from the Asset Reconstruction Company. Palco has its factory in Nagpur, with an installed capacity of 30,000 tonne per annum (TPA) of aluminium rolled products and 14,000 TPA of conductor rods. Hindalco has undertaken various expansion plans. It is expanding the refinery capacity at Muri from 1,10,000 TPA to 4,50,000 TPA. The work has already been initiated and is likely to be commissioned by 2007. The company has entered into a memorandum of understanding with the government of Orissa and Jharkhand to set up an aluminium complex with captive power plants as well.
Hindalco has raised its basic selling price of aluminium by Rs 6,000 per tonne (about 6 per cent), its second revision from January 2006 due to volatile metal prices at the London Metal Exchange. A rise in the price of alumina, one of the key elements in the production of aluminium, and the surge in demand for aluminium have forced aluminium companies to raise their prices.
Hindalco experienced mixed financial results for the first three quarters of 2005-06. For the quarter ended June 2005, its net sales went up by 7 per cent to Rs 2,207 crore over the corresponding period a year ago and net profit rose by 38 per cent to Rs 325 crore. Aluminium production rose considerably but copper production suffered due to shutdown of the Dahej plant on account of heavy rainfall in Gujarat. During July-September 2005, the company’s net sales increased by 8 per cent to Rs 2,661 crore over the same period of the previous year. However, net profit declined by 7 per cent to Rs 276 crore. Despite, a 15 per cent rise in net sales to Rs 2,873 crore for the quarter ended December 2005, the company’s net profit dipped by 13 per cent to Rs 300 crore over the corresponding period of the previous year.
m SHRENUJ AND COMPANY
Glittering Performance
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During 2004-05, Shrenuj registered a healthy financial performance. Net sales rose by 19.5 per cent to Rs 489 crore and net profit increased by 27 per cent to Rs 11 crore over 2003-04. The company’s foreign exchange earnings jumped by 12 per cent to Rs 450 crore over the same period of the previous year. On a consolidated basis, Shrenuj Group recorded a sales revenue of Rs 558.3 crore during 2004-05, showing a growth of 20.7 per cent while net profit grew by 55 per cent to Rs 12.1 crore over 2003-04.
Shrenuj is widening its horizon with a focus on regions such as China and west Asia that are showing signs of faster growth. The company has decided to invest in shares of Shrenuj UK; a subsidiary company registered in UK, worth up to 2.5 million euro, for business development and to explore the overseas market. It has also decided to form overseas subsidiaries in US, Mauritius and Dubai for business expansion and development purposes. In the domestic market, it has launched the diamond brand, Sveni, with a focus on young middle and upper middle class women. The company has launched ‘Fiana’, a new branded jewellery collection in France with a local partner, under the promotional programme of Diamond Trading Corporation (DTC).
Shrenuj posted healthy results for the first three quarters of 2005-06. During April-June 2005, despite a decline in net sales of 0.8 per cent to Rs 104.5 crore, the company’s net profit went up by 0.9 per cent to Rs 2.1 crore. For the quarter ended September 2005, its sales revenues increased by 6.8 per cent to Rs 142 crore and net profit jumped up by 58 per cent to Rs 3.2 crore, over the same period a year ago. During October-December 2005, the company’s sales revenues posted a 15 per cent rise at Rs 140.8 crore and net profit grew by 33 per cent to Rs 4.3 crore, over the corresponding period of the previous year.
m CLARIANT INDIA
Market Leader
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Economic and Political Weekly February 18, 2006
The Week’s Companies namely, chemicals and dyes and (Rs lakh) masterbatches, which cater to the require-
Hindalco Shrenuj and Clariant India Company Financial Indicators 2004-05 2003-04 2004-05 2003-04 2004-05 2003-04
| Income/Appropriations | |||||
|---|---|---|---|---|---|
| 1 Net sales 952325 | 620835 | 48945 | 40974 | 33210 | 31676 |
| 2 Value of production 977890 | 631029 | 49065 | 40633 | 33319 | 31696 |
| 3 Other income 20781 | 16039 | 0 | 10 | 655 | 1138 |
| 4 Total income 998671 | 647068 | 49065 | 40644 | 33974 | 32834 |
| 5 Raw materials/stores and spares/ | |||||
| power and fuel consumed 643524 | 421815 | 40064 | 33268 | 8074 | 6548 |
| 6 Other manufacturing expenses 10194 | 2487 | 2490 | 2140 | 16865 | 17382 |
| 7 Remuneration to employees 41263 | 23706 | 727 | 552 | 2296 | 2146 |
| 8 Other expenses 57169 | 33469 | 2186 | 1579 | 3416 | 3292 |
| 9 Depreciation 46326 | 31745 | 259 | 206 | 594 | 526 |
| 10 Gross profit 200195 | 133846 | 3340 | 2898 | 2728 | 2940 |
| 11 Interest 16996 | 17715 | 1608 | 1678 | -18 | -103 |
| 12 Operating profit 183199 | 116131 | 1732 | 1220 | 2746 | 3043 |
| 13 Non-operating surplus/deficit 7219 | 8436 | 0 | 7 | 78 | 11 |
| 14 Profit before tax 190418 | 124567 | 1732 | 1227 | 2825 | 3054 |
| 15 Tax provisions 57483 | 40674 | 616 | 351 | 973 | 970 |
| 16 Profit after tax 132936 | 83893 | 1117 | 876 | 1852 | 2085 |
| 17 Dividends (includes tax on dist profit) 18556 | 15258 | 327 | 273 | 1312 | 1312 |
| 18 Retained profits 114380 | 68634 | 790 | 603 | 540 | 773 |
| Liabilities/assets | |||||
| 19 Paid-up capital 9278 | 9248 | 1091 | 1091 | 1193 | 1193 |
| 20 Reserves and surplus 757380 | 676542 | 10306 | 9567 | 8846 | 8484 |
| 21 Long-term loan 242142 | 207374 | 134 | 23 | 0 | 0 |
| 22 Short-term loan 137858 | 49085 | 25593 | 22823 | 747 | 885 |
| (i) of which, bank borrowings 133781 | 33380 | 25459 | 22256 | 747 | 885 |
| 23 Gross fixed assets 1009577 | 712616 | 6313 | 4992 | 6615 | 6409 |
| 24 Accumulated depreciation 306934 | 191828 | 872 | 678 | 4340 | 3925 |
| 25 Inventories 237452 | 119134 | 20226 | 15990 | 3996 | 3648 |
| 26 Total assets/liabilities 1510508 | 1147134 | 42942 | 37448 | 17962 | 17243 |
| Miscellaneous items | |||||
| 27 Excise duty 95717 | 61151 | 0 | 0 | 2826 | 2325 |
| 28 Gross value added 268714 | 174210 | 4348 | 3662 | 5194 | 4832 |
| 29 Total foreign exchange earnings 260738 | 129510 | 45018 | 40223 | 6969 | 9736 |
| 30 Total foreign exchange outgo 390930 | 251213 | 34389 | 30671 | 5337 | 4052 |
| Key financial and performance ratios | |||||
| 31 Turnover ratio (sales to total assets) 0.8 | 0.6 | 1.2 | 1.2 | 2.0 | 2.0 |
| 32 Gross value added to gross | |||||
| fixed assets (%) 31.2 | 25.6 | 76.9 | 75.7 | 79.8 | 81.8 |
| 33 Return on investment (gross profit | |||||
| to total assets) (%) 15.1 | 12.3 | 8.3 | 8.6 | 15.5 | 17.4 |
| 34 Gross profit to sales | |||||
| (gross margin) (%) 21.0 | 21.6 | 6.8 | 7.1 | 8.2 | 9.3 |
| 35 Operating profit to sales (%) 19.2 | 18.7 | 3.5 | 3.0 | 8.3 | 9.6 |
| 36 Profit before tax to sales (%) 20.0 | 20.1 | 3.5 | 3.0 | 8.5 | 9.6 |
| 37 Tax provisions to profit before tax (%) 30.2 | 32.7 | 35.5 | 28.6 | 34.4 | 31.7 |
| 38 Profit after tax to net worth | |||||
| (return on equity) (%) 18.3 | 12.9 | 10.1 | 8.7 | 18.8 | 22.2 |
| 39 Dividend (%) 171.5 | 143.9 | 25.8 | 21.8 | 95.1 | 95.9 |
| 40 Earnings per share (Rs) 143.3 | 90.7 | 10.2 | 8.0 | 15.5 | 17.5 |
| 41 Book value per share (Rs) 826.3 | 741.5 | 104.5 | 97.7 | 84.2 | 81.1 |
| 42 P/E ratio (multiple) 12.7 | 17.6 | 6.5 | 5.7 | 16.5 | 9.4 |
| 43 Debt-equity ratio (adjusted for | |||||
| revaluation) 0.50 | 0.37 | 2.26 | 2.14 | 0.07 | 0.09 |
| 44 Short-term bank borrowings | |||||
| to inventories (%) 56.3 | 28.0 | 125.9 | 139.2 | 18.7 | 24.3 |
| 45 Sundry creditors to sundry | |||||
| debtors (%) 185.1 | 135.4 | 30.3 | 23.4 | 123.8 | 111.2 |
| 46 Total remuneration to employees | |||||
| to value added (%) 15.4 | 13.6 | 16.7 | 15.1 | 44.2 | 44.4 |
| 47 Total remunerations to employees | |||||
| to value of production (%) 4.2 | 3.8 | 1.5 | 1.4 | 6.9 | 6.8 |
| 48 Gross fixed assets formation | |||||
| (% growth) 41.7 | 10.1 | 26.5 | 6.6 | 3.2 | 18.5 |
| 49 Growth in inventories (%) 99.3 | 18.9 | 26.5 | 8.9 | 9.5 | -0.6 |
ments of the textile, paper and leather industries. In fact, it is the market leader in textile chemicals and leather dyes. The masterbatches segment deals with colour and additive concentrates and special mixtures of these compounds for use in automobiles, textiles and technical fibres, electronic and electrical devices, home appliances, toys, medical devices sporting goods, etc.
During 2004-05, despite a 4.8 per cent rise over 2003-04 in net sales to Rs 332 crore, CIL suffered in profitability by 11 per cent with profits at Rs 18 crore. Of total net sales, domestic sales contributed 79 per cent and export share stood at 21 per cent. The dyes and chemical segment recorded a 3.9 per cent rise in sales to Rs 319 crore and the masterbatches segment registered a growth of 38 per cent to Rs 12.7 crore, over the corresponding period a year ago. The dyes and chemicals segment contributed 96 per cent to net sales and the remaining 4 per cent was added by masterbatches segment.
Clariant India has decided to merge five of its group companies in India, becoming thereby a single entity, subject to all the requisite statutory and regulatory approvals by RBI, SEBI, the individual boards and shareholders. BTP India and the two subsidiaries of Colour-Chemicals, namely, Vanavil Dyes and Chemicals and Kundalika Investments will also be merged with Clariant India.
For the first three quarters of 2005-06, Clariant India reported a satisfactory financial performance. For the first six months, April-September 2005, its net sales increasedby 13.3 per cent to Rs 182.8 crore over the same period a year ago and net profit rose by 28 per cent to Rs 12.9 crore. The dyes and chemical segment’s sales revenue increased by 12 per cent to Rs 175 crore and masterbatches revenue grew by 41 per cent to Rs 7.6 crore for the first six months of 2005-06. For the quarter ended December 2005, the company’s net sales stood at Rs 100 crore, up by 7.7 per cent over the corresponding period of the previous year and net profit recorded a rise of 61.3 per cent to Rs 6.6 crore. The sales revenue of the dyes and chemicals segment has moved up by 6.8 per cent to Rs 95 crore over the same period of the previous year and masterbatches revenue grew by 28.6 per cent
Note: P/E multiples are the latest with corresponding last year’s figures.
to Rs 4.8 crore.
m Economic and Political Weekly February 18, 2006
