Sintex announced results post market hours, at 3:45 pm today. While revenues are up 25% to 1154 cr., the net profit has dropped 61% to just 38 cr. from 101 cr. Much of this loss was due to Foreign Currency Convertible Bonds (FCCBs) based losses. Companies that borrow through FCCBs (in foreign currency) have to make an allowance for the exchange rate changes. A fall in the rupee means they have to pay more in rupees than earlier and this is considered a loss.
At the current price of Rs. 115, the P/E comes to 8.1, which isn’t very expensive.
FCCBs: Sintex issued $225m of FCCBs in 2008, payable or convertable in 2013. The conversion price is Rs. 247, said their group president, Sunil Kanojia. The yield is 5.2% which means a total payment of $290M in 2013, which at today’s USD-INR price amounts to Rs. 1450 cr. Including this, their total debt is 2900 cr.… (Read On...)