DSIJ Mindshare

3M India posts 40% growth in Q4

3M India, a maker of adhesives, car polishes and the ubiquitous Stick-Ons, has reported 40.3 per cent growth in net profit to Rs 58.41 crore in Q4FY16 as against Rs 41.63 crore in Q4FY15 owing to strong operating profit.

Operating income of the company has grown by 15.63 per cent to Rs 552.1 crore as against Rs 477.44 crore in the corresponding quarter of previous fiscal. Operating profit (EBITDA) has grown by 42.5 per cent to Rs 99.33 crore along with EBITDA margin, which has expanded by 339 bps Y-o-Y to 17.99 per cent in Q4FY16 against 14.6 per cent in Q4FY15; whereas 50bps expansion seen on Q-o-Q basis.

Industrial and Safety & Graphics are two heavy weighted segments which contribute around 40.77 and 25.70 per cent respectively towards the total income. These two segments' revenue has grown by 18.36 and 129.5 per cent respectively. EBIT (Earnings Before Interest and Taxes) level of the Industrial segment has grown by 18.36 per cent to Rs 39.64 crore (accounting to 45.60 per cent of total EBIT); and Safety & Graphics has grown by 129.5 per cent to Rs 13.85 crore (accounting to 15.92 per cent of total EBIT).

For the entire period of FY16, the company’s net profit has grown by 85.5 per cent to Rs 200.93 crore as against Rs 108.34 crore in the same period last fiscal. Total income has grown by 14.27 per cent to Rs 2,102.3 crore as against 1,840.3 crore in the same period of the previous year. Operating income has grown by 68.30 per cent to Rs 341.9 crore along with EBITDA margin expanding by 522 bps to 16.26 per cent.

Parent 3M owns 75 per cent stake in 3M India. On valuation front, the stock is currently available at 70.82 times of price to earnings ratio with an earning of Rs 178.6 per share in FY16. Today, stock price closed lower by Rs 454.90 or 3.45 per cent at Rs 12720.10 per share.

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