Stock Update: Sintex

Sintex has come out with a decent set of results for FY2015. 

FY2015 Results (Consolidated)

Sales : 7006.6 cr (up 20%)

PAT : 528.8 cr (up 45%)

EPS (Diluted) : 13.5

Building materials grew 16% yoy (from 2734 cr to 3176 cr)
Custom moulding grew 21% yoy (from 2566 cr to 3107 cr)
Textile grew 33% yoy (from 546 cr to 724 cr)

The company also announced that it had won a large government order for rural RO water shelter enclosure and healthcare centre from couple of states.

The company will add about 1 lakh spindles by Sep 2015 and 2.2 lakhs by Mar'16 bringing the total spindle capacity to 3.2 lakh spindles. Overall the company plans to increase total spindle capacity to around 10 lakhs but that depends on capacity utilization of the initial setup. Company expects operating margins from the textile division to improve by 0.5%  with economies of scale coming in with new capacities getting on-stream.

In building product segment, new products in segments of environment & clean fuels, cold chains and warehouses are driving growth along with education and healthcare sectors. The company has received fresh orders in Prefab segment from new territories and for new product ranges. The company is the only company in India to get government approval for prefabricated biogas plants.

Custom moulding did very well both in India and Europe and is likely to continue with good performance with a pickup in industrial activity.

Of the total US $ 120 M FCCB conversion, only US $ 17 M is yet remaining to be converted, which will happen in Q1 FY'16.

High debt and low promoter holding (and promoter pledging of shares) remains a risk and creates an overhang on the stock.

Overall, it is an interesting stock to keep a watch on.