GMM Pfaudler Q4 PAT slides 13% to 12 cr

The firm's net profit declined 13% to Rs 11.60 crore on 5.28% decline in net sales to Rs 131.78 crore in Q4 March 2020 over Q4 March 2019.

EBITDA improved 14% to Rs 22.5 crore in Q4 FY20 from Rs 19.8 crore in Q4 FY19. EBITDA margin stood at 17% in Q4 FY20, higher than 14% in Q4 FY19.

Net profit jumped 41% to Rs 71.1 crore on 18% increase in net sales to Rs 591.1 crore in the year ended March 2020 (FY20) over the year ended March 2019 (FY19). EBITDA improved to Rs 111.10 crore in FY20, up 44% versus Rs 77 crore in FY19. EBITDA margin improved to 19% in FY20 versus 15% in FY19.

Commenting on the company's performance for FY20, Tarak Patel, managing director said We are pleased to announce robust performance in the fiscal year despite external challenges imposed by the coronavirus outbreak. We have been relatively insulated from the current disruption as our order backlog continues to remain strong and we expect to recover the loss of production in the coming quarters. We expect increased activity in the pharma and chemical sectors resulting in an increased demand for our product and services."

"COVID-19 began impacting our normal business operations on 14th March 2020 by affecting our supply chain and our ability to ship ready equipment to our customers, our production eventually shut down completely on March 23rd, 2020. All in all, additional revenue that could have been recognized in the last quarter in a normal business environment is estimated to be Rs 300 million", the company said.

Meanwhile, the company has received an in principal approval from the board of directors and is in advanced discussions with Government of Telangana state to set up a greenfield facility in Hyderabad. The estimated cost of the said investment is Rs 50 crore and is being financed by the company's cash reserves.

The company has seen a steep increase in the demand for glass lined equipment over the last 18 months mainly driven by the Indian chemical (agrochemical & specialty) industry which continues to grow strongly. It expects the investment by the pharmaceutical industry to increase in the coming months.

"As the Hyderabad Pharma city will attract domestic and international pharma companies to put up bulk drug manufacturing in the manufacturing zone, our presence around Hyderabad would serve those industries well for the supply of glass lined equipment and other chemical processing equipment," the firm said.

GMM Pfaudler is a supplier of process equipment to the pharmaceutical and chemical industries. The company has a diversified product portfolio which includes mixing systems, filtration & drying equipment, engineered systems and heavy engineering equipment.

The scrip rose 2.64% to end at Rs 3892.75 on Friday. The stock has gained 10.5% in the past one month while the S&P BSE 500 index has lost 2.5% during the same period.

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