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IDBI Capital Report
Everest Kanto Cylinders Ltd.’s Q1 FY23 result was lower than our expectations. Its sales were below our estimate due to slower-than-expected offtake of compressed natural gas cylinders from the original equipment manufacturers.
Although sales grew by 13% YoY, it fell by 20% QoQ to Rs 3,805 million (our estimate Rs 4.9 billion). Ebitda stood at Rs 605 million (down 36% QoQ, down 32% YoY).
Everest Kanto Cylinders' Ebitda margin fell by 1,055 bps YoY to 16% on account of high cost inventories and sharp increase in other expenses. Net profit fell by 44% YoY at Rs 387 million.
Recently, sharp rise in CNG prices has led to slowdown in end markets (CNG car sales). Hence, we lower our FY23/24 sales forecasts by 12%/9%.
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