 "S Chand and Company hits new low; stock tanks 83% against IPO price")
Shares of S Chand and Company tanked 14 per cent to Rs 116 on the BSE on Wednesday, after the company posted 48 per cent drop in consolidated net profit at Rs 172 crore in March quarter (Q4FY19) due to lower revenue and higher interest cost. It had reported a profit of Rs 330 crore in a year ago quarter.
The stock of textbook publisher was trading its lowest level since its listing on May 9, 2017 and has plunged 83 per cent as compared to its issue price of Rs 670.
The company’s total revenue from operations declined 31 per cent to Rs 449 crore against Rs 655 crore in the corresponding quarter of the previous fiscal. Ebitda (earnings before interest, taxes, depreciation and amortization) margin contracted to 41 per cent from 52 per cent in year ago quarter.
For entire financial year 2018-19 (FY19), S Chand and Company posted a net loss of Rs 67 crore, as against net profit of Rs 107 crore in FY18. Operational revenue declined 34 per cent to Rs 522 crore from Rs 794 crore in previous fiscal.
The management said lower sales offtake in distribution channel was in anticipation of the New Education Policy; the channel partners lowered their sales offtake so as to control the level of inventory with them. "The fiscal was an abnormal year for paper prices as consecutive price increase in paper by more than 15 per cent on a yearly basis," it added.
However, for FY20, the company target Ebitda/free cash flow generation ratio of 50 per cent. The higher Ebitda margin levels on back of cost savings driven from “S Chand 3.0” implementation.
The company sees itself well-positioned to benefit from the New Education Policy, which should be announced during FY20 leading to a period of strong & sustainable growth over the medium-term. "Given the uncertainty around the actual timing of the announcement, it would not be prudent to give revenue guidance for FY20 at this point of time," S Chand said in a recent note.
The stock of textbook publisher was trading its lowest level since its listing on May 9, 2017 and has plunged 83 per cent as compared to its issue price of Rs 670.
The company’s total revenue from operations declined 31 per cent to Rs 449 crore against Rs 655 crore in the corresponding quarter of the previous fiscal. Ebitda (earnings before interest, taxes, depreciation and amortization) margin contracted to 41 per cent from 52 per cent in year ago quarter.
For entire financial year 2018-19 (FY19), S Chand and Company posted a net loss of Rs 67 crore, as against net profit of Rs 107 crore in FY18. Operational revenue declined 34 per cent to Rs 522 crore from Rs 794 crore in previous fiscal.
The management said lower sales offtake in distribution channel was in anticipation of the New Education Policy; the channel partners lowered their sales offtake so as to control the level of inventory with them. "The fiscal was an abnormal year for paper prices as consecutive price increase in paper by more than 15 per cent on a yearly basis," it added.
However, for FY20, the company target Ebitda/free cash flow generation ratio of 50 per cent. The higher Ebitda margin levels on back of cost savings driven from “S Chand 3.0” implementation.
The company sees itself well-positioned to benefit from the New Education Policy, which should be announced during FY20 leading to a period of strong & sustainable growth over the medium-term. "Given the uncertainty around the actual timing of the announcement, it would not be prudent to give revenue guidance for FY20 at this point of time," S Chand said in a recent note.
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