KANCHI KARPOORAM LTD Q2 FY 21 RESULTS REVIEW DT 19 11 20

 

KANCHI KARPOORAM LTD

Q2 FY 21 RESULTS REVIEW

DT 19 11 20

 

 

COMPANY OVERVIEW

Kanchi Karpooram Limited (KKL)a Public Limited Company which manufactures Camphor, its derivatives, Gum rosin, Value Added Resins and Fortified Rosin.

It is in this arena for more than a decade with a proven track record for quality, competitive price and timely supply of its products.

MANAGEMENT

Suresh V Shah            Managing Director

Dipesh S Jain       Whole Time Director

Arun V Shah                Whole time Director

Mr. S. Srinivasan,       Chairman, Non Executive& Independent Director

Products

Camphene,  Camphor, Dipentene, Double Distilled Turpentine, Ester Gum, Fortified Rosin, Gum Rosin, Isoborneol, Isobornyl Acetate, Pine Oil, Pine Pitch, Pine Tar (Natural), Sodium Acetate Trihydrate

CUSTOMERS

Manufacturers of -

TYREs, PAINT, PAPER, FRAGRANCE, Camphor tablets, Rubber etc

COMPETITORS :

Mangalam Organics Ltd (MP :427)(Sept 20 qtr sales :Rs.85 cr. NPT :14 cr)

Oriental Aromatics Lts (MP :492.15)(Sept 20 qtr sales :Rs.193 cr. NPT :33 cr)

kanchi Karpooram Ltd : (MP :420)(Sep 20 qtr sales :Rs.54 cr. NPT :19.45 cr)

 

EXPANSION UPDATE

Pursuant to our letter dated 12.02.2020 regarding the expansion plan, kindly be informed that the Company originally envisaged completing the expansion of its plant located in Kanchipuram, Tamilnadu  (Including construction  of building and commissioning of equipment  and  machinery)  by month of June 2020.

However,  due  to  the  COVID-19 epidemic  breakout  in  March2020 and  subsequent  lockdowns imposed by both  Central  and  State government,  the  work  has  come  to  a  total standstill. 

The company  is currently engaged  in  mobilizing the  workforce  in  the  upcoming months by  exercising careful and abundant caution. Considering  all  the  unforeseen  circumstances  the Company  is  planning  to  complete  the  entire project by December 2020. (LR DT 13.07.2020)

 

QUARTERLY RESULTS

Kanchi Karpooram (in Rs. Cr.)	sep'20	Jun '20	Mar '20	Dec '19	Sep '19	YOY	QOQ
Net Sales	54.34	24.44	39.34	43.2	64.9	-16.27	122.34
Net Profit	19.45	4.9	2.78	5.59	9.3	109.14	296.94
Equity Share Capital	4.36	4.36	4.26	4.26	4.26	2.35	0
Basic EPS	44.57	11.32	5.98	13.13	22.14	101.31	293.73
Raw Materials	20.82	11.16	22.35	34.74	42.03	-50.46	86.56
Increase/Decrease in Stocks	-0.17	3.41	8.79	-2.48	1.18	-114.41	-104.99
Employees Cost	5.35	1.89	1.98	1.53	5.55	-3.6	183.07
depreciation	0.31	0.3	0.21	0.36	0.35	-11.43	3.33
Other Expenses	2.29	1.37	2.2	2.56	2.76	-17.03	67.15
Total Expenditure	28.65	18	35	36	51	-43.82	59.17
EBIT		6	4	6	13	-100	-100
P/L Before Other Inc. , Int., Excpt. Items & Tax	25.95	6.54	3.81	6.5	12.94	100.54	296.79
Other Income	0.26	0.31	0.42	0.04	0.31	-16.13	-16.13
P/L Before Int., Excpt. Items & Tax		6.63	4.23	6.54	13.34	-100	-100
Interest	0.05	0.09	0.27	0.11	0.4	-87.5	-44.44
P/L Before Tax		6.54	3.96	6.43	12.94	-100	-100
Tax	6.5	1.64	1.17	0.83	3.63	79.06	296.34

 

MP  448              

PE   9.92                    

VOLUME 30000                 

52 Wk L/H     125 499 ONLY ON BSE

TECHNICAL RATING

ALL VERY BULLISH

Annual RESULTS	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
Sales	202	187	114	58	56
Net Profit	25	28	15	3	0
Other Income	0	0	0	0	0
Total Income	203	188	115	59	56
Total Expenditure	167	144	90	52	53
EBIT	36	44	24	6	2
Interest	0	2	1	1	1
Tax	9	12	7	1	0

 

CASH FLOWS	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
Operating Activities	30	24	2	0	5
Investing Activities	-8	-5	-6	-3	-1
Financing Activities	1	-21	5	3	-4
Others	0	0	0	0	0
Net Cash Flow	23	-1	1	0	0

 

CASH FLOWS
	HY1FY21	HY1 FY20
OPERATING	30.88	30.04
INVESTING	-26.19	-6.5
FINANCING	1.36	-0.13
CASH AT YR BEGINNING	23.4	0
END	29.46	23.4

 

Per Share Ratios	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
Basic EPS (Rs.)	61.39	68.21	36.65	7.32	1.91
Diluted Eps (Rs.)	59.45	68.21	36.65	7.32	1.91
Book Value [Excl. Reval Reserve]/Share (Rs.)	217.63	157.95	86.43	51.65	17.83
Dividend/Share (Rs.)	3	2	2	1.5	1.5
Face Value	10	10	10	10	10
Margin Ratios	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
Gross Profit Margin (%)	18.38	23.97	22.12	12.26	5.37
Operating Margin (%)	17.76	23.46	21.39	11.18	4.7
Net Profit Margin (%)	12.78	15.04	13.24	5.17	1.39
Return Ratios	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
Return on Networth / Equity (%)	27.99	42.74	42.4	14.17	10.69
ROCE (%)	38.34	66.19	67.86	29.94	10.49
Return On Assets (%)	26.42	33.88	22.93	6.99	3.23
Leverage Ratios	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
Debt to Equity (x)	0	0	0.65	0.81	1.86
Interest Coverage Ratios (%)	41.1	15.74	16.89	3.52	1.8
Valuation Ratios	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
P/E (x)	0	0	0	0	0
P/B (x)	0.8	1.99	2.32	1.11	1.11
EV/EBITDA (x)	1.35	2.88	4.11	5.44	6.64
P/S (x)	0.37	0.7	0.73	0.4	0.14
Growth Ratios	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
3 Yr CAGR Sales (%)	51.23	49.27	29.45	1.2	3.36
3 Yr CAGR Net Profit (%)	104.6	229.57	287.94	3.92	-15.3

 

HISTORICAL PRICES
3YR	126.85
2YR	561.7
1YR	285
3MON	339
1MON	360.95
1WEEK	384.3
NOW	447.85

 

Type	Dividend%	Ex-Dividend date
Final	10	Sep 17, 2020
Interim	20	Mar 19, 2020
Final	20	Aug 29, 2019
Final	20	Sep 18, 2018
Final	15	Sep 19, 2017

 

Share Holding Pattern in (%)
Standalone	May-20	Apr-20	Mar-20	Dec-19
Promoters	46.68	45.36	45.32	44.96
Pledged	0	0	0	0
FII/FPI	0	0	0	0
Total DII	11.24	11.25	11.3	11.36
Fin.Insts	0.01	0.01	0.01	0.17
Insurance Co	0	0	0	0
MF	0.05	0.06	0.06	0.06
Others DIIs	11.18	11.18	11.23	11.13
Others	42.08	43.4	43.39	43.69
Total	100	100.01	100.01	100.01

 

 

STRENGTHS

Growth in Net Profit with increasing Profit Margin (QoQ)

Company with Low Debt

Strong cash generating ability from core business - Improving Cash Flow from operation for last 2 years

Book Value per share Improving for last 2 years

Company with Zero Promoter Pledge

Near 52 Week High

Stock gained more than 20% in one month

Strong Momentum: Price above short, medium and long term moving averages

WEAKNESSES

Companies with growing costs YoY for long term projects  

 

ANNUAL REPORT 2019-20 EXTRACTS

MANAGEMENT DISCUSSION AND ANALYSIS REPORT.

Industry structure and developments :

The Camphor industry is sustaining its growth and is expected to continue in the same pattern. The positive outlook is the increase in demand for Camphor. Your Company’s geographical location is a positive factor in the Camphor market. In today’s competitive operation the focus need to be on reduction of Cost.

Therefore by exercising the degree of attention your Company has bettered in the year under review and look forward for the same in the forthcoming years.

Opportunities and Threats:

Your Company is experiencing a potential growth in sales in the past due to the factors that location of the plant and quality of the product. This is expected to continue in the forthcoming years.

Since the main raw material required is imported, the price factor and the exchange variation may have adverse effect. However, the Company prices its products with due consideration of both the factors

Product -wise Performance:

The main product, namely Camphor is having a progressive sales year after year so as other by-products.

Outlook :

Your Company has a substantial growth potential in terms of marketing of its products which has been so far progressive in the past and the Company looks forward for the same in the years to come.

Risks and Concerns

General risks:

The Foreign Exchange fluctuations may have adverse effects due as your Company imports huge raw materials.

Operational risks:

Price of the main raw material may have an adverse effect if the demand and supply gap is widen.

Financial risks:

Your Company needs to import raw materials at appropriate time, which warrants sizable works capital with a conscious approach to the degree of risk in terms of procurement of raw material keeping in view of the finance available.

Regulatory and Legal risks:

The Company is exposed to environmental regulations. The Company has adequate system and controls to mitigate various risks.

Risk management:

The Company's risk management is based on various risks and proper risks assessment and strategic measures by continuous monitoring the procedural establishment for this purpose which are in line with normal industrial practice

Discussion on financial performance :

with respect to operational performance

Your Company has increased the volume in sales, hence a better performance compared to the previous year. Your Company exercises stringent cost control factors and quality control measures so as to sustain consistent in performance.

The Company has achieved a turnover of Rs.20368.81 lakhs as compared to Rs. 18838.86 lakhs and has profit after tax Rs. 2594.63 lakhs as compared to Rs.2811.34 lakhs profit in the previous year.

 

PARTICULARS            2019-2020    2018-2019

A: Profitability ratios:

Operating Profit Margin      18%       20%

Net Profit Margin                13%       15%

Return on Equity                28%       43%

B. Ratio for Assessing Financial Health

Capital Turnover Ratio 2.19       2.84

Fixed Assets Turnover Ratio7.50      7.57

Inventory Turnover Ratio   5.79       5.16

Debtors Turnover Ratio             15.59     14.94

Operating Profit Margin Ratio    82%       80%

D: Earnings and dividend ratio

Dividend percentage                 20%       20%

Earnings per Share                   60.92     68.21

P/E Ratio                                  2.86       4.61

Book Value Per share                217.64   67.52

 

Reason for Increase / Decrease in Key Financial Ratios:

i.  Decrease in Return on Equity (ROE):  Since there is a reduction in Profit and also there is an increase in Paid-up Share capital, ROE is reduced.

ii.  Decrease in Gross Profit & Net Profit Ratio:    The Prices during the year under review vis.a.vis sale price of camphor is reduced and import price of main Raw material has increased. This had an impact on the Profit margin. The contribution from other Finished goods also has reduced, which also had an impact on EPS.

iii.  Decrease in Capital Turnover Ratio:    Consequent to reduction of sale price of camphor, a major sale component in turnover, there is a reduction in turnover. Also, the paid-up share capital has increased.

iv.  Fixed Assets Turnover Ratio    The investment in Fixed Asset has gone up by 4.89%, whereas the turnover has reduced by 8% (due to reduction in sale price), there is a reduction in the ratio.

v.  Inventory Turnover Ratio    The company has exercised precautionary measures in procurement of imported raw material, thus there is a reduction in holding level of inventories. However, the company ensured minimum stock levels for its uninterrupted production.

vi.  Debtors Turnover Ratio    The company has phased out the credit facilities from the bank to bring it to Zero level, by ensuring prompt payment from Debtors