Piramal Glass' focus on high-margin cosmetics, perfumery packaging to improve profitability

Piramal Glass supplies glass packaging products to cosmetics & perfumery, pharmaceuticals and food & beverages industries.

It has manufacturing facilities in Gujarat, India, USA and Sri Lanka and will grow its capacity by another 22% by the end of this fiscal.

FINANCIALS

The Ajay Piramal-owned company was making losses till FY09. But since then, it has shown a steady growth in its earnings. For FY11, net sales were Rs 1,218.5 crore (Rs 1,104 crore in FY10) and the net profit was Rs 103.4 crore (Rs 3 crore). Net sales have more than doubled in the last five years. The company did a rights issue in 2009, to reduce its debt.

The debt to equity ratio was 15.7 then and has come down to 2.4 currently. This reduction in debt helped to reduce the interest outgo. This along with increasing sales from the highmargin cosmetics and perfumery (C&P) segment were the main reasons for the company's turn around.

The C&P segment enjoys an operating margin of 30% against 22% for the pharma and F&B segments. Revenue share of the C&P category has grown from 35% in FY09 to almost 50% in FY11. As a result, the cash flow of the company has improved over the last two years.

Read more on the link below.

600450 Piramal Glass' focus on high-margin cosmetics, perfumery packaging to improve profitability glassonweb.com

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