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Tag: profit decline

  • Sambhaav Media’s Q2 shows revenue surge by three per cent

    Sambhaav Media’s Q2 shows revenue surge by three per cent

    Mumbai: Sambhaav Media Limited (SML) unveiled its Q2 FY25 financial results, revealing a mixed bag of growth and challenges. For the quarter ending 30 September 2024, the company recorded a standalone revenue of Rs 965.78 lakhs, marking a marginal increase of three per cent from Rs 940.78 lakhs in Q2 FY24. Consolidated revenue also rose to Rs 1,068.02 lakhs, showcasing a five per cent uptick from the prior year.

    However, profitability took a hit. Standalone net profit slumped to Rs 26.20 lakhs, a stark decline from Rs 35.25 lakhs in the same period last year. The consolidated loss widened, with the bottom line falling into the red at Rs -20.27 lakhs compared to a profit of Rs 14.75 lakhs in Q2 FY24.

    The media and allied business contributed Rs 776.81 lakhs to total revenue, supported by a seven per cent increase in advertising contracts. Technology and allied services added Rs 188.97 lakhs, displaying resilience despite global headwinds. The combined revenue from operations for the half-year stood at Rs 1,752.51 lakhs, up 6 per cent year-over-year, signalling stable demand for the company’s offerings.

    Total expenses for the quarter escalated by eight per cent, reaching Rs 979.77 lakhs on a standalone basis. Employee benefits saw a notable increase, rising by 12 per cent to Rs 88.23 lakhs, reflecting investments in talent retention. Broadcasting expenses grew by 9 per cent, primarily driven by higher content acquisition costs.

    Depreciation expenses rose slightly, while finance costs declined by four per cent, suggesting effective debt management. Despite these efforts, the operating profit margin narrowed significantly due to increased provisions for taxation and other operating expenses.

    SML faced higher tax provisions during Q2, which included deferred tax adjustments amounting to Rs 12.59 lakhs. Additionally, an exceptional loss of Rs 6.00 lakhs from discontinued operations impacted the consolidated bottom line. This stemmed from the strategic exit from GSRTC’s public entertainment contract, finalised last year, to optimise operational focus.

    The company continues to invest in technological innovation and content diversity, which are crucial for long-term growth. While profitability remains a concern, management expressed confidence in navigating these challenges through strategic cost management and revenue diversification.

    Key priorities for the coming quarters include addressing tax liabilities and optimising operational efficiency. As of 30 September 2024, the company’s consolidated net worth stood at Rs 8,553.14 lakhs, indicating a solid financial foundation to weather temporary setbacks.

  • ACC’s Q2 growth slows as rising costs slash profit by 39 per cent YoY

    ACC’s Q2 growth slows as rising costs slash profit by 39 per cent YoY

    Mumbai: In a world where owning a home is the ultimate badge of success, the foundation of that dream rests on cement. But what happens when the very industry that builds these aspirations feels the ground shifting beneath its feet?

    ACC Limited, a dominant player in the Indian cement industry, has reported its unaudited financial results for Q2 of FY25, revealing a story of modest growth tempered by significant cost pressures. Despite a 3.9 per cent year-on-year (YoY) increase in revenue, reaching Rs 4,607.98 crore, the company’s net profit after tax dropped sharply by 39 per cent, from Rs 384.29 crore in Q2 FY24 to Rs 233.87 crore this quarter.

    The company’s revenue from operations for the quarter ended 30 September 2024, stood at Rs 4,607.98 crore, an uptick from Rs 4,434.67 crore in the same period last year. This increase can be attributed to strong demand in key markets, especially for cement and ready-mix concrete, though the overall boost was muted compared to earlier quarters. On a half-yearly basis, the total income reached Rs 9,987.38 crore, showing a 0.7 per cent increase over the previous year’s Rs 9,921.88 crore.

    However, operational challenges have taken a toll. Total expenses climbed to Rs 4,443.76 crore, an increase from Rs 4,126.95 crore in Q2 FY24. Key contributors to this rise include a surge in power and fuel costs, which now stand at Rs 772.07 crore, and higher freight and forwarding expenses of Rs 948.95 crore, reflecting rising energy prices and logistical bottlenecks. The company’s cost of materials consumed also saw a notable increase of 17 per cent, indicating an inflationary impact on inputs.

    The jump in costs has had a cascading effect on profitability. ACC Limited’s operating performance further underscores the strain on profitability, with the Q2 FY25 operating EBITDA slipping to Rs 436 crore, translating to a margin of 9.5 per cent, down from Rs 549 crore and a 12.4 per cent margin in Q2 FY24. The half-year figures reveal a similar story, as the H1 FY25 operating EBITDA declined to Rs 1,115 crore with an 11.4 per cent margin, compared to Rs 1,320 crore and a 13.7 per cent margin in the same period last year. This drop reflects the growing cost pressures that continue to weigh on the company’s bottom line, and profit before tax (PBT) has declined significantly to Rs 318.20 crore, compared to Rs 515.58 crore in the previous year. The net profit margin also dropped, reflecting the difficulties in passing on cost increases to consumers amid intense competition.

    Depreciation and amortisation expenses rose to Rs 231.69 crore, while finance costs saw a minor increase, now at Rs 33.29 crore, indicating tighter control over financial liabilities but still exerting pressure on earnings.

    Despite the financial squeeze, ACC continues to prioritise long-term investments. Capital expenditures have been allocated toward upgrading existing facilities and exploring renewable energy sources to mitigate future energy cost risks. The company’s non-current assets, including property, plant, and equipment, stood at Rs 14,252.34 crore as of 30 September 2024.

    ACC is also grappling with external pressures. The ongoing litigation with the Competition Commission of India (CCI), which could result in penalties exceeding Rs 1,100 crore, adds a layer of uncertainty to its financial outlook. The company has set aside provisions for these risks, but the legal shadow continues to loom large.

    With an eye on stabilising costs and improving efficiencies, ACC will need to leverage its market position and operational agility to weather the ongoing financial headwinds. ACC Ltd, whole time director & CEO, Ajay Kapur said, “Our performance in Q2 reinforces our standing as a frontrunner in the cement industry. Our financial results this quarter – fuelled by higher volumes, cost optimisation, increasing efficiencies, and agility – build the momentum for our growth strategy for FY’25 and beyond. Our growth is being driven by robust demand for high-quality cement products across all markets, as well as our continuous efforts to optimise operations and lead on all ESG parameters. Our leadership status is highlighted in our drive for operational excellence supported by innovation, sustainability, and a customer-centric approach. We continue to deliver strong value for our stakeholders as we aim for sustained profitability through our competitive advantage.”

    Key Financial Highlights:

    •  Revenue from operations: Rs 4,607.98 crore (up 3.9 per cent YoY)

    •  Net profit after tax: Rs 233.87 crore (down 39 per cent YoY)

    •  Total income: Rs 9,987.38 crore (up 0.7 per cent YoY for H1)

    •  Power and fuel costs: Rs 772.07 crore (down 13 per cent QoQ)

    •  Freight and forwarding expenses: Rs 948.95 crore (down 13.5 per cent QoQ)

  • Mahindra Logistics’ Q2 FY25 shows revenue growth, but profit declines

    Mahindra Logistics’ Q2 FY25 shows revenue growth, but profit declines

    Mumbai: In the crowded lanes of India’s logistics market, even giants can stumble. Mahindra Logistics, a cornerstone of the Mahindra Group, seems to be navigating through a challenging terrain. Despite the conglomerate’s success across other sectors, the logistics arm is struggling to turn growth into profit. The unaudited consolidated results for Q2 FY25, ending 30 September 2024, reveal a dynamic yet troubled picture—while revenues surged, profit margins hit a roadblock, hinting at both promising opportunities and deep-rooted operational hurdles.

    The company reported a consolidated revenue from operations of Rs 1,521.10 crores for Q2 FY25, marking an 11 per cent increase from Rs 1,364.76 crores during the same quarter last year. This growth was primarily driven by strong performance in the supply chain management segment, which saw increased demand across industries. However, the company’s profit trajectory didn’t mirror this upward trend.

    Profitability took a significant hit, with a net loss of Rs 10.75 crores compared to a loss of Rs 15.93 crores in Q2 FY24. Despite efforts to improve operational efficiency, rising expenses eroded the gains from higher revenue. Operating costs surged by 12 per cent, reaching Rs 1,306.85 crores, driven by increased freight rates and employee expenses.

    Mahindra Logistics’ managing director & CEO, Rampraveen Swaminathan, acknowledged the challenges, stating, “While we are encouraged by the revenue growth, the increase in operating costs continues to be a headwind, impacting overall profitability.” The company also saw higher finance costs due to rising borrowing expenses, which climbed to Rs 19.12 crores, up from Rs 16.53 crores in the previous year.

    Further complicating the financial landscape, depreciation and amortisation expenses rose by 4 per cent, amounting to Rs 53.96 crores. Although Mahindra Logistics expanded its asset base to support growth, these costs weighed heavily on its bottom line.

    The balance sheet showed a marginal improvement in total assets, increasing to Rs 2,595.52 crores as of September 2024, compared to Rs 2,477.20 crores in March. Despite this, the company’s debt-to-equity ratio escalated from 0.56 to 0.87 over the past year, signalling a higher reliance on borrowings.

    In the face of these challenges, Mahindra Logistics continues to push forward, prioritising cost control and strategic investments. The management is optimistic about improving margins in the upcoming quarters, driven by initiatives to streamline operations and optimise its supply chain network.