Operational cost
Persistenly high inflation sustained
a high cost environment – primarily
fuel and energy costs – and adversely
impacted business profitability.
Operational expenses grew 23%
from
`
11,286.30 million in 2011-12
to
`
13,879.33 million in 2012-13.
This increase was primarily due to the
power and fuel cost which grew 46%
from
`
2,106.80 million in 2011-12
to
`
3,065.98 million in 2012-13. The
Company’s Sikandrabad unit was hit by
a significant increase in power tariff by
the Uttar Pradesh Government.
Employee costs increased from
`
1,071.85 million in 2011-12 to
`
1,364.02 million in 2012-13 due to
an increase in the team size to meet
the needs of an expanding operational
scale and annual increments and
performance incentives.
Margins
Despite external adversities, EBIDTA
grew 19% from
`
2,076.73 million
in 2011-12 to
`
2,476.87 million in
2012-13. The EBIDTA margin declined
marginally by 45 bps from 15.83%
in 2011-12 to 15.38% in 2012-13 -
the downward slide arrested by the
Company’s focus on value-added
tiles and cost optimisation initiatives.
However, the net margin increased 32
bps from 6.17% to 6.49% over the
same period primarily due to interest
cost reduction consequent to astute
funds management by the Company.
Interest
Despite a high interest rate regime
prevailing during most part of 2012-13
and an increase in the consolidated
debt portfolio as on March 31, 2013,
the Company’s interest liability
decreased from
`
485.11 million in
2011-12 to
`
453.53 million in
2012-13.
The achievement was primarily due to
the Company’s ability to arrest losses
due to foreign currency fluctuation
on account of tile imports. Superior
negotiations based on the strength of
the financial statements and business
strategy facilitated in a more than 100
bps decrease in the average interest
rate for the Company. The interest
cover (depicts the Company’s interest
servicing ability) strengthened from
3.47x in 2011-12 to 4.48x in 2012-13.
Taxation
Provision for current tax stood at
`
498.78 million in 2012-13 against
`
380.56 million in 2011-12 – a 31%
increase – in line with a similar increase
in the Profit before tax. The average tax
was 31.63% in 2012-13.
Ploughback
The Company maintained a prudent
balance between rewarding
shareholders and retaining funds to
be progressively utilised for growth-
intensive initiatives. While the
dividend payout increased 20% over
the previous, the Company ploughed
`
788.56 million into the business in
2012-13. The Company plans to utilise
these funds for organic and inorganic
plans and to de-leverage the balance
sheet.
B) Balance Sheet
Capital employed
Capital employed in the business
increased 23% from
`
6,318.51
million in 2011-12 to
`
7,741.90
million in 2012-13 as the Company
acquired facilities to establish a
pan-India manufacturing presence.
Superior business management,
Interest cover
(x)
2008-09
1.22
2009-10
2.37
2010-11
3.97
2011-12
3.47
2012-13
4.48
Ploughback
(
`
million)
2008-09 71.78
2009-10
272.71
2010-11 435.16
2011-12
595.03
2012-13
788.56
Dividend payout incl dividend tax
(
`
million)
2008-09 17.22
2009-10
85.80
2010-11
171.04
2011-12
213.80
2012-13
256.56
36
Kajaria Ceramics Limited
Annual Report
2012-13
25
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