Mcleod Russel India Ltd Research ReportQ4

Wage increase continues to dent profitability  McLeod Russel’s sales was flat for the quarter at | 377.9 crore (I-direct estimate | 391.4 crore) • On an annual basis, consolidated revenues increased 9.9% to | 2,055.3 crore, driven by a 5.8% increase in both volume & prices to 901 lakh kg and | 173/kg, respectively  EBITDA loss increased 25.2% during the quarter owing to higher other expenses, which increased 36.6% YoY. EBITDA loss for the quarter came in at | 267.9 crore against | 213.9 crore in Q4FY18. Employee cost increased 3.8% to | 190.2 crore. The company increased wages after renewing the wage contract for the next three years. We believe this would result in continuous increase in employee cost for the company  Interest cost was up 25.1% to | 49.3 crore during the quarter. Other income increased significantly from | 104.8 crore to | 152.5 crore during the quarter mainly on account of profit on sale of shares of the parent company held through a trust & higher dividend received from overseas subsidiaries