Huhtamaki India (509820) Q4 2021 earnings summary

Executive summary

• Revenue from operations rose 6.6% YoY to Rs. 26,252.8m, while EBITDA before exceptional items fell 51.0% to Rs. 1,184.0m; FY21 net loss was Rs. 226.9m.

• Performance was pressured by raw-material inflation, volatile demand and a Rs. 309.8m one-time VRS charge; Project Parivartan targets cost transformation, improved pricing and better-quality growth.

Financial highlights

• Net sales were Rs. 25,708.6m vs Rs. 24,188.0m in 2020; pre-exceptional, pre-tax result was a Rs. 5.9m loss vs Rs. 1,175.9m profit.

• Revenue from operations was Rs. 26,252.8m vs Rs. 24,627.0m; EBITDA before exceptional items was Rs. 1,184.0m vs Rs. 2,416.4m.

• PAT was a Rs. 226.9m loss vs Rs. 959.9m profit; EPS was Rs. (3.00) including exceptional items and Rs. 1.10 excluding them, vs Rs. 12.71 in 2020.

• The Rs. 309.8m exceptional expense covered VRS payouts to 102 employees at the Thane plant; adjusted for this item, pre-tax result was a Rs. 5.9m loss.

• Operating cash flow was negative Rs. 276.7m after exceptional items, versus positive Rs. 1,693.4m in 2020; working capital absorbed cash amid higher receivables and inventory.

Outlook and guidance

• FY22 priorities: reduce waste through TPM, optimise manufacturing footprint and productivity, improve raw-material buying and S&OP, advance transformation, and use digitalisation and analytics.

• Commercial priorities include competitive pricing, redefining sales strategy, commercialising innovations and advancing sustainable packaging; no quantified financial guidance is stated.