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  • 04 Feb 2022
  • ICICIdirect Research

GNL REGISTERS MIXED SET OF NUMBERS

GRINDWELL - 1831 Change: 7.75 (0.43 %)

News: Revenues came in at Rs.501.9 crore, which registered growth of 9.7% YoY and declined marginally by 2.1% on QoQ basis, crossing pre-pandemic levels. primarily aided by strong performance in Abrasives, Ceramics & plastic segment. Revenue contribution from Abrasives, ceramics & IT Services stood at ~56%, ~35.2% & ~6.5%, respectively. Abrasive segment revenue grew by 6.8% to Rs.283.4 crore YoY, Ceramics and plastic segment grew by 13.8% to Rs.176.5 crore, YoY while IT Services segment grew marginally by 0.2% to Rs.32.5 crore, YoY. Abrasive segment registered EBIT margin of 12.3% (Vs. 13.5% in Q3FY21). While EBIT margins for Ceramics and plastic segment reported to 22.1% (Vs. 24.1% in Q3FY21) and for IT Services segment EBIT margin stood at 29.2% (Vs. 31.2%, YoY). Overall, EBITDA margins came in at 17.9% (Vs. 21.4% Q3FY21) and declined by 184bps on QoQ basis. PAT grew by 5.5% to Rs.69.6 crore, YoY, partly aided by higher other income which grew by 247.7% to Rs.17.2 crore, on YoY basis

Views: Overall GNL has registered mixed set of numbers with reasonable revenue growth while margin blip owing to higher commodity prices. Going forward, accelerated growth in plastics segment expected to continue owing to niche value added products in life sciences and focus on export of niche high value products. Also, a revival in industrial/automotive, engineering activities would gradually provide further growth opportunities for abrasive, ceramics segments driving the overall performance in long term.

Impact: Neutral