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Everest Kanto Cylinder Ltd.’s Q2 FY23 result was lower than our expectations. Its sales fell by 11% QoQ to Rs 3,397 million mainly led by weak demand and rising competition.
Nevertheless, Industrial segment reported stable performance which supported the topline from further downfall.
Ebitda stood at Rs 359 million (down 41% QoQ, down 68% YoY) and Ebitda margin contracted 1,590 bps YoY to 11% on account of lower topline growth and negative operating leverage.
Everest Kanto Cylinder’ net profit fell by 74% YoY at Rs 185 million. Sharp rise in prices of compressed natural gas across India has led to lower demand for CNG vehicles.
Hence, we lower our FY23/24 sales forecasts by 12%/9%. Our FY23/24 Ebitda forecast stand lower by 29%/26%.
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