Piramal Glass, a cosmetics and perfumes glass manufacturing major reported over two-fold jump in consolidated net profit to Rs 25.77 crore for the first quarter ended June 30, 2013, helped by forex gains.
Consolidated net sales of the company grew by 11.25 percent to Rs 428.10 crore from Rs 384.80 crore during the same period of previous fiscal.
The company earned foreign exchange gain of Rs 22.7 crore as against Rs 7.4 crore in a year ago period.
Other income shot up to Rs 13.05 crore. "In Sri-Lanka we have a land parcel of about 20 acres, where we had our plant earlier. The income from first parcel of land sale was booked in this quarter. The entire other income of Rs 13.05 crore came from land sale in Sri-Lanka," Mr. Chunduru Srinivas, President M&A and Investor Relations at Piramal Glass told in an exclusive interview to moneycontrol.com.
Forex Gain
"Piramal Glass is a net exporter from India. Export contributes 75 percent to total revenues while domestic contributes 25 percent. We have annual sales worth USD 80 million from exports (net of imports). A part of this amount is hedged, while the remaining is not hedged," said Srinivas.
Loans
The interest cost was down 11 percent in this quarter. "It was primarily because we have US denominated loans. Also we repaid some loan amount in this quarter. The company will use the free cash flow to pare debt in the coming quarters. The total outstanding loan book is about Rs 1350 crore," said Srinivas.
Energy cost
"The energy cost is paid in dollars. Last year average price per unit of energy was about USD 10/mmbtu. In this quarter the cost has shot up to approximately USD 11.2/mmbtu," added Srinivas.
Raw material cost
"Soda ash, one of the major raw materials is imported in dollars. Also prices of quartz moved up in this quarter. The raw material cost could marginally go up in the coming quarters," clarified Srinivas.
Demand scenario
"The challenges prevail in all the three segments going ahead. In domestic market, there is oversupply in past 18 months since many new capacities have come on-stream. Globally, there is a slowdown in cosmetics and perfumes as new perfume launches have slowed down. Historically, we have registered 25-30 percent growth in cosmetics and perfumes but it looks very challenging to persist the same growth rate in FY14," concluded Srinivas.
