Pearl Global Industries Ltd Q4 FY15 Results – Strong Growth in Revenues & Profits01-Jul-2014
-Q4 FY15 Revenues Increase by 36.2% to Rs. 3,339.9 mn on QoQ basis
-Q4 FY15 EBIDTA Increase by 53.5% to Rs. 202.4 mn on QoQ basis
-Q4 FY15 PAT Increase by 57.5% to Rs. 110.7 mn on QoQ basis
-Dividend Recommendation at Rs. 2.25 per Share (Dividend Payout of 23.3% of Reported PAT)
The total income from operations during Q4FY15 grew 36.2% QoQ to Rs. 3,440 million. Q4FY15 EBITDA grew 53.5% QoQ to Rs. 202 million with an EBITDA margin of 6.1%. Q4FY15 PAT grew 57.5% QoQ to Rs. 111 million with a PAT margin of 3.3%.The total income from operations during FY15 was Rs. 10,237 million. FY15 EBITDA was Rs. 496 million with an EBITDA margin of 4.8%. FY15 PAT stood at Rs. 251 million with a PAT margin of 2.4%.
The growth is mainly driven by higher capacity utilisation resulting into improved operating leverage and increased operating efficiency and productivity. The Company sees improved visibility on business front through its robust order book and expects to sustain growth along with improved margins over comings quarters. Company also is undergoing capacity expansion in South India. The new facilities are expected to be instrumental in helping the company raise its cumulative production capacity by about 7% to 5.35 million pieces per month, through the addition of 1,250 machines to reach a total of 9,750 machines.
The Bangalore Facility with 400 machines has already become operational and the rest 850 machines at the Chennai facility would become operational during FY16.With South India fast emerging as the new garment-manufacturing hub of India, the proposed capacity expansion is expected to help Pearl Global to reduce its geographic concentration risk by diversifying operations across North and South India.
The company is hopeful that this capacity increase, along with future ones, will significantly improve its industry ranking within the top 7 manufacturers out of India. With this capacity enhancement, the company is poised to be a leading player amidst the exclusive club of market peers within the garment manufacturing space.
Global market trends are in favour of such a move by Pearl Global. With China's advantage in the garment business gradually eroding due to escalating wages and overheads, apparel manufacturing units in South Asia stand to gain from a natural shift of business towards them. This provides India a good business opportunity to improve its share of the global garment manufacturing business. Currently, India exports 25-30% of the textile goods to the global market and enjoys only 3.7% of the global apparel exports market share.