HSIL Limited, India’s leading packaging and building products manufacturing company, has announced its financial results for the third quarter ended on December 31, 2020.
Total income for the third quarter of FY2021 was Rs 548 crore compared to Rs 494 crore in the same quarter last year, a growth of 10.8 percent on a Y-o-Y basis. Despite the ongoing Covid-19 crisis, sales rebounded successively in the third quarter driven by improved average realizations, improved product mix, and a strong recovery in volumes underpinned by robust demand from the alcoholic beverage industry. Packaging products reported revenue from operations of Rs 361 crore, a growth of 15.2 percent on a Y-o-Y basis while building products reported revenue from operations of Rs 179 crore, a growth of 29.8 percent on a Y-o-Y basis.
HSIL reported an EBITDA of Rs101 crore with EBITDA margins improving to 18.4 percent as compared to 15.0 percent in Q3FY2020. The margin improvement was driven by improved capacity utilization levels coupled with optimized sourcing of key raw materials. Adjusted PAT margins were 6.6 percent in Q3 FY2021 as compared to 3.2 percent in Q3 FY2020 and 5.0 percent in Q2 FY2021. The income tax writebacks of Rs 14.7 crore in Q2 FY2021 resulted in higher profit after tax during that period.
During the quarter, company also completed the buy-back of 7.59 million shares for an amount aggregating to Rs 63.9 crore. The company has utilized 91.32 percent of the maximum buy back size excluding the transaction costs, as per regulatory provisions.
In packaging products, sales recovered very well with volumes driven largely by the beer, food & beverage industry. Due to optimized sourcing of key raw materials and higher capacity utilization, EBIT margins improved to 17.6 percent in Q3 FY2021 from 14.2 percent in Q3 FY2020. During the quarter, 46 new products were developed, and 13 new products were also commercialized. In building products, post Covid-19 lockdowns, all the plants are now operational and the capacity utilization levels have improved sequentially.
HSIL maintained its focus on packaging products business and the segment saw sales volumes growth during the quarter, reflecting consumers’ preference for quality and sustainable packaging alternatives. The company also aligned its operations to navigate successfully in the challenging environment and was able to generate strong results with the expectation of benefiting from operational efficiencies and cost reduction efforts in the longer run.
Commenting on the quarterly results, Sandip Somany, Vice Chairman and Managing Director, HSIL Limited, said, “For the quarter under review, HSIL Limited has delivered excellent results on the back of higher capacity utilization, operational efficiency, and cost optimization measures resulting in resilient margins. Our glass business continues to accelerate, while building products division reported another strong quarter of sustained growth.”
Given the strong demand and better opportunities in the glass packaging market, the company plans to invest Rs 220 crore to manufacture high margin specialty glass with a manufacturing capacity of 150 tonnes per day which will be completed within the next 15 months.