National Foods: bucking the national trend

The numbers just keep getting prettier and prettier for National Foods as the spice king adds another notch to its belt at the close of FY13.
Closing the second year running with record earnings, the Company saw its top line witness a 19.2 percent accretion and Company sources report that growth has mainly been volumetric instead of simply being price-led.
This surge in net sales has largely been led by growth at home; however, export figures are not far behind, say Company sources. At the nine-month mark, the firms total dispatches to markets in the Middle East, Europe and America accounted for 10 percent of the total revenues and the fourth quarter saw another round of double digit growth in these numbers.
The formation of a whollyowned subsidiary of the firm in Dubai can be credited for this growth as improved distribution and channel management synergies came into work during the second half of FY13.
Formed specifically to help enhance the Companys reach into the GCC region, which represents the juiciest portion of the untapped international demand, Nationals newly formulated export model has been hard at work this year.
Margins during the period also remained intact, with gross margins in a number of key product categories including recipe mixes, sauces and pickles having improved year on year.
Talking to BR Research, Farhan Abdul Latif, Nationals CFO said the improved chili crop during FY13 was a major factor buttressing these margins. "Since Chili is the raw material with the largest contribution to Nationals product line, its production and prices in any given year affect our end prices the most. But the improved harvests this year offset the inflation-led movement in prices of some of the other raw materials," he said.
On the whole, Nationals strong performance during the year was an example of the whole being greater than the sum of its parts. A containment of fixed costs, improved working capital management that kept the financial charges in check and an intensive focus on rationalizing the marketing expenditure during the year were just some of the tricks that National had up its sleeves.
Going forward, the firms commitment to streamline while diversifying at the same time is what will help them battle the incoming demons of food inflation and a whittled down consumer purchasing power.

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NATIONAL FOODS LIMITED

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Rs (mn)                                    FY12       FY13        chg

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Sales                                     7,169      8,546        19%

Cost of sales                             4,837      5,588        16%

Gross profit                              2,331      2,957        27%

Gross profit margin                      32.51%     34.60%   2.09 ppt

Distribution & other selling expense      1,187      1,624        37%

Administrative expenses                     204        264        29%

Finance cost                                 71         75         6%

NPAT                                        583        673        15%

EPS (Rs)                                  14.07      16.25

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GULISTAN SPINNING MILLS LIMITED

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Rs(mn)                         9M-FY13    9M-FY12        Chg

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Sales                              524       1227       -57%

Cost of sales                      569       1084       -47%

(Loss) / Gross profit              -45        144      -132%

(Loss) / Operating profit          -87         95          -

(Loss) / Profit before tax         -98        -28       249%

(Loss) / Profit after tax          -89        -30       195%

EPS (Rs)                         -6.05      -2.05

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GULISTAN TEXTILE MILLS LIMITED

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Rs(mn)                       9M-FY13    9M-FY12      Chg

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Sales                           2011       5522     -64%

Cost of sales                   2585       4971     -48%

(Loss) / Gross profit           -574        550        -

(Loss) / Operating profit       -674        357        -

(Loss) / Profit before tax      -965       -341     183%

(Loss) / Profit after tax       -941       -413     128%

EPS (Rs)                      -49.57     -21.77

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IBL HEALTHCARE LIMITED

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Rs(mn)                    FY13    FY12      Chg

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Sales                      864     723      19%

Cost of sales              629     506      24%

Gross profit               235     218       8%

Other Operating income       9       4      99%

Profit before tax          122      88      39%

Profit after tax           101      78      28%

EPS (Rs)                  5.03    3.92

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ITTEHAD CHEMICALS LIMITED

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Rs(mn)                    FY13    FY12     Chg

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Sales                     4278    4004      7%

Cost of sales             3413    3202      7%

Gross profit               865     802      8%

Other income                21      13     62%

Operating profit           453     430      5%

Profit before tax          333     228     46%

Profit after tax           295     160     84%

EPS (Rs)                  8.18    4.44

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