Tokyo Plast International Reports 73.5% Drop in Q1 Net Profit Despite Revenue Growth

Tokyo Plast International Ltd., a leading manufacturer of plastic thermoware products, has reported a significant decline in net profit for the first quarter, despite a modest increase in revenue.

Financial Performance

The company's unaudited financial results for the quarter reveal a mixed picture:

Tokyo Plast International's revenue from operations increased to ₹1,820.73 crore, up from ₹1,779.84 crore in the same quarter of the previous year, representing a modest growth of 2.2%. However, the company's net profit saw a sharp decline of 73.5%, falling to ₹10.14 crore from ₹38.26 crore year-over-year.

Factors Affecting Profitability

The significant drop in net profit despite revenue growth can be attributed to several factors:

1. Increased Costs: The cost of materials consumed rose to ₹1,032.76 crore, up from ₹641.13 crore in the same quarter last year, indicating a substantial increase in raw material costs.

2. Employee Expenses: Employee benefit expenses increased marginally to ₹379.98 crore from ₹349.77 crore in the corresponding quarter.

3. Finance Costs: The company experienced a notable rise in finance costs, which nearly doubled to ₹65.03 crore from ₹32.95 crore in the previous quarter.

Other Financial Highlights

• Other Income: The company reported a slight increase in other income, rising to ₹0.30 crore from ₹0.09 crore in the same quarter last year.
• Depreciation: Depreciation and amortization expenses increased to ₹76.97 crore from ₹72.03 crore year-over-year.
• Earnings Per Share (EPS): The basic and diluted EPS for the quarter stood at ₹0.11, down from ₹0.40 in the corresponding quarter of the previous year.

Outlook

As Tokyo Plast International navigates through these challenging times, investors and stakeholders will be keenly watching how the company addresses the rising costs and improves its profit margins in the coming quarters. The management's strategies to mitigate these challenges and capitalize on the revenue growth will be crucial for the company's financial performance in the future.

Tokyo Plast International continues to operate in the plastic thermoware products segment, and its ability to manage costs while maintaining revenue growth will be key to improving its financial performance in the upcoming quarters.