Shankara Building Products surges 20% on good operational performance in Q4

The company's consolidated profit before tax more-than-doubled to Rs 14.8 crore for the March quarter against Rs 3.6 crore in the year-ago quarter.

Shares of Shankara Building Products were locked in the upper circuit of 20 per cent at Rs 364 on the BSE on Thursday in an otherwise weak market after the company reported a more than double consolidated profit before tax (PBT) at Rs 14.8 crore for the March quarter (Q4FY20). It had a PBT of Rs 3.6 crore in the year-ago quarter.

The company’s EBITDA (earnings before interest, taxes, depreciation, and amortisation) for the quarter rose 74.3 per cent year-on-year (YoY) to Rs 27.1 crore from Rs 15.5 crore in previous year quarter. EBITDA margin improved 146 basis points (bps) to 4.06 per cent from 2.60 per cent during the quarter. Total income from operations grew 11.6 per cent at Rs 667 crore on YoY basis.

Currently, the company has 115 stores. It has shut five stores in Kunnamangalam, Calicut; Mancheryal, Telangana; Medavakkam and KK Nagar, Chennai, and Marathahalli, Bangalore during the quarter. The company has also put on hold the fresh capex projects and said the only ongoing necessary capex is being completed.

The management said it is very difficult to assess the future outlook at this stage as the company is not yet past the Covid-19 crisis. However, given the trend of operations in May 2020, the management is confident that the company will tide this situation in the ensuing months and the entity's going concern status will not be affected.

“While the optical profit & loss picture is healthy, the balance sheet remains a concern for the company with net debt plus acceptances up quarter-on-quarter (QoQ) by Rs 64 crore. The receivables days at 60 have also shot up from 48 days in FY19. Key monitorable ahead would be Covid impact commentary and balance sheet improvement plan execution,” ICICI Securities said.

The trading volumes on the counter jumped more than four-fold today, with a combined 490,000 shares changing hands till 12:09 pm. There were pending buy orders for around 90,000 shares on the BSE and NSE, the exchange data shows.