Everest Industries Q4 results: Sales down 3.18%, profit drops 58%

On May 22, 2024, Everest Industries announced its Q4 and full-year results. The performance was mixed, showing both positive quarterly improvements and notable yearly declines.

Despite these challenges, Everest Industries has recommended a final dividend. To know more about the Everest Industries Q4 results performance, continue reading.

Company profile

Everest Industries Limited, established in 1934, is a prominent player in the Indian manufacturing sector. It is renowned for providing a wide range of construction solutions. The company primarily manufactures asbestos cement (AC) roofing, which has been a staple in the industry for decades.

In recent years, Everest Industries has diversified its portfolio to include non-asbestos products. These include roofing sheets, flooring, cladding, and various types of boards. Everest also specialises in pre-engineered buildings (PEBs). The company handles the design, manufacture, and erection of these structures, providing a comprehensive solution to its clients. 

Everest Industries operates through two main business segments: The building products segment and the steel buildings segment. In the March quarter of FY2024, the building products category brought in almost 67% of the overall revenue. The steel buildings segment, on the other hand, is around 33% of the total revenue. 

The company operates through eight manufacturing plants located across India. This extensive network ensures wide reach and accessibility to its products, contributing to its strong market presence.

The shareholding pattern of Everest Industries as of March 2024 shows that 50.25% of the company’s shares are held by promoters. Institutional investors and the general public own the remaining shares.

Everest Industries Q4 results analysis

In the fourth quarter of FY24, Everest Industries reported a decline in net sales. Sales decreased by 3.18% to ₹432.11 crore, down from ₹446.30 crore in the same quarter of the previous year. 

Comparing quarter to quarter, there were some positive changes. Revenue from operations increased by 22.90%, from ₹351.59 crore in Q3 FY24 to ₹432.1 crore in Q4 FY24. This indicates a recovery in sales compared to the previous quarter. However, year-on-year comparisons show a more challenging picture.

Net profit for the quarter also saw a significant drop. It declined by 58.02%, from ₹12.96 crore in Q4 FY23 to ₹5.44 crore in Q4 FY24. However, the quarter-on-quarter growth indicates some positive momentum, with a 570.37% increase.

The company’s EBITDA also showed a downward trend. It stood at ₹16.16 crore for March 2024, reflecting a 46.13% decrease from ₹30 crore in March 2023. This decline in EBITDA highlights the pressure on the company’s operational efficiency.

Earnings per Share (EPS) experienced a notable decrease. The EPS dropped from ₹8.23 in March 2023 to ₹3.45 in March 2024. This reduction in EPS underscores the impact on shareholder returns due to lower profitability.

Source: Everest Industries Financial Results Q4FY24

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Dividend details

In its recent meeting, the board of Everest Industries recommended a final dividend for the financial year ending March 31, 2024. The proposed dividend is ₹2.50 per equity share. The face value of each equity share is ₹10.

The company’s shareholders must approve this recommendation at the next annual general meeting (AGM). If approved, the dividend will be distributed within 30 days from the date of the AGM. This timely payout ensures shareholders receive their returns promptly.

Annual earnings

Here are the results of the FY 2024:

Source: Everest Industries Financial Results Q4FY24

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Everest Industries share price performance

Everest Industries’ share price has shown notable movements over the past year. As of May 28, 2024, the share price stands at ₹1104.85. 

Over the past year, the share price has gained 36.87%. 

Looking at a longer-term perspective, the five-year performance is even more significant. The Everest Industries share has gained 146.99% over this period.

Strength & weakness

Strengths:

• Established market position: With 85 years of experience, Everest Industries dominates the domestic AC roofing market. It has a strong distribution network of 7,000 retail outlets and 32 sales depots across India.
• Diversified revenue mix: The building products segment contributed 67% of revenue in the first nine months of FY24. This diversification stabilises revenue streams.
• Healthy financial profile: The company has a net worth of over ₹575 crore and a debt-free capital structure for most of FY24. Liquid funds and partially unutilised bank limits support liquidity.

Weakness:

• Dependence on rural spending: Demand relies heavily on rural household construction and industrial investment, making the company vulnerable to economic fluctuations and competition from galvanised iron sheets.
• Raw material price volatility: Prices of asbestos and steel impact margins significantly. Limited ability to pass on cost increases affects profitability.
• Regulatory risks: Potential bans on asbestos in key markets and changes in regulations pose significant risks to the company’s operations and profitability.

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Bottomline

Everest Industries faces both opportunities and challenges in the current market landscape. The company’s established market position, diversified revenue mix, and strong financial profile offer solid foundations for future growth. 

However, reliance on rural spending, raw material price volatility, and regulatory risks pose ongoing challenges. Investors should weigh these factors carefully, considering both the potential for recovery and the hurdles that may impact future performance.