| Moser Baer Q2 net drops 87% |
| BS Reporter / Mumbai October 27, 2007 |
| A slump in the optical storage market due to oversupply, coupled with start-up costs associated with its foray into the entertainment business, sharply affected the perfomance of optical storage media major Moser Baer for the second quarter ending 30 September, 2007. It reported a steep decline of 87% in its net profit (PAT) which stood at Rs 3.30 crore as compared to Rs 26 crore in the corresponding quarter of the previous financial year. Its total income too saw a dip of about 4% to stand at Rs 490.30 crore against Rs 513.30 crore in the same quarter of the previous financial year. Sequentially (compared to the trailing quarter), the company witnessed a 65% decline in PAT from Rs 9.60 crore in the previous quarter. For the same time period, the company reported a 2% decline in total income from Rs 500.30 crore. Explaining the reason for the dip in margins, Avinash Vashist, chairman and CEO, Tholons Advisory, opined: "The entertainment business does not play on any of the strengths that the company has. The industry is also confused about the strategy of the company in this area, as it is currently a loss-making proposition." Ratul Puri, executive director, Moser Baer India, however, is confident that the Photovoltaic and Entertainment businesses will add $140 (around Rs 560 crore) to 160 million (around Rs 640 crore) to consolidated revenues during the year. "The optical media performance has been affected by one-time factors during the quarter," he said, adding "this business will continue to grow at a compounded annual growth rate (CAGR) of 20-25 per cent over the next three years and also be significantly free cash accretive in future". Yogesh Mathur, CFO, Moser Baer, corroborated: " Despite short-term aberrations, the media business margins remain stable helped by cost efficiencies and benefits from duty refund. Long-term media industry variables remain positive with the business remaining significantly cashflow accretive." On the photovoltaic front, both analysts and Moser Baer agree that business will be good. Moser Baer |
