Pioneer reports 49% increased revenues for 9M FY22

Pioneer Embroideries Limited (PEL), one of the key players in the Specialized Polyester Filament Yarn (SPFY) and Embroidery & Laces in India, reported a mixed set of numbers for its Q3 & 9M of FY22.

Key Financial & Operational Highlights for the 9M FY22:

Total Income for 9M FY22 increased by 49% to ₹ 2,189 mn. While SPFY business contributed ₹ 1,908 mn, with a growth of 46% YoY, the Embroidery & Laces business contributed ₹ 280 mn, clocking an increase of 68% YoY.

For 9M FY22, the Domestic business of SPFY grew by 69% to ₹ 1,661 mn and accounted for about 87% of the sales, as the share of Exports came down from 23% to 13% on a comparative basis. Despite weaker margins and higher tax outgo in the current quarter, PEL's EBIDTA was 18% higher, and PAT was 12% higher over the corresponding previous 9M period.

Finance cost for the 9M FY22 was reduced to ₹ 21 mn from ₹ 35 mn YoY.

Key Financial & Operational Highlights for the Q3 FY22:

Total Income for Q3 FY22, at about ₹ 760 mn, remained unchanged over Q2 FY22. While SPFY business contributed ₹ 629 mn (Q2: ₹ 663 mn), Embroidery & Laces business contributed ₹ 131 mn (Q2: ₹ 102 mn). While overall exports remained unchanged at about ₹ 102 mn, the share of SPFY in overall exports was lower as compared to Q2 FY22.

The EBITDA for Q3 FY22 was at ₹ 69 mn (Q2: ₹ 78 mn), as margins came down from 10.2% to 9.1% during the quarter under reporting. As a result, Profit Before Tax for Q3 FY22 was lower by about 21% at ₹ 41 mn (Q2: ₹ 51 mn).

The impact on margins in Q3 FY22 was primarily on account of higher raw material prices in the dominant SPFY business of the Company. The average crude price was around US$ 80, mainly following the geopolitical developments such as the Russian-Ukraine tensions, and this led to an increase in the raw material cost in Q3 FY22. SPFY exports also experienced a slowdown in the current quarter, as the Covid resurgence in overseas markets affected demand. Though the domestic demand in SPFY did help in essentially maintaining turnover levels, the margins remained lower due to higher raw material and logistics costs.

Providing more insights into the Company's performance, Mr Harsh Vardhan Bassi, Managing Director, Pioneer Embroideries Limited, said, "Higher crude prices and lower export demand did play spoilsport, and the numbers appear more affected, since the corresponding previous quarter, Q3 FY2021, had witnessed an extraordinary performance. In that particular quarter, there was a noticeable pent-up demand in both exports and domestic markets post-Covid initial wave, and raw material price movement were benign, resulting in almost 16% EBIDTA margins.

We are confident that our continued focus on maximising EBIDTA levels even in a challenging environment will hold us in good stead and would positively enhance our performance as the disrupting factors even out in the coming quarters."

Shares of Pioneer Embroideries Limited was last trading in BSE at Rs. 62.90 as compared to the previous close of Rs. 63.60. The total number of shares traded during the day was 22514 in over 790 trades.

The stock hit an intraday high of Rs. 65.65 and intraday low of 62.60. The net turnover during the day was Rs. 1444392.00.

Source : Equity Bulls

Keywords

PioneerEmbroideries INE156C01018 SpecializedPolyesterFilamentYarn Embroidery Laces Q3FY22 9MFY22