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Systematix Research Report
KPR Mill Ltd.'s revenue grew by 34.5% YoY and 36% QoQ to Rs 19.5 billion, surpassing our estimate of Rs 16.8 billion. Revenue in the sugar and ethanol division was up 152% YoY, with the textiles division posting 12% YoY growth.
Gross margin contracted 744 basis points YoY and 602 bps QoQ to 33.4%, mainly due to high-cost inventory and raw material price inflation. Ebitda rose 19% QoQ but fell by 5% YoY to Rs 3.2 billion, 15% below our estimate of Rs 3.8 billion. Ebitda margin contracted 234 bps QoQ and 675 bps YoY to 16.4% (our estimate 22.4%).
Profit after tax increased 20% QoQ, but fell 4.7% YoY to Rs 2.1 billion, and was below our estimate of Rs 2.4 billion. KPR Mill has liquidated its high-cost cotton inventory, and the current inventory is valued at Rs 62,000-63,000/candy. This should support margins in the coming quarters.
It has garment order book of Rs 10 billion, likely to be executed over four-five months. The commissioning of its new 120 thousand litres per day ethanol facility in October 2023 should increase KPR's total capacity to 480 klpd, resultantly driving profitability in the sugar division.
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