Hit Kit Global Solutions Ltd. :532359-IN: Earnings Analysis: Q3, 2017 By the Numbers : March 22, 2017

Hit Kit Global Solutions Ltd. reports financial results for the quarter ended December 31, 2016.

We analyze the earnings along side the following peers of Hit Kit Global Solutions Ltd. – Buderim Group Limited and Berg Earth Co., Ltd. (BUG-AU and 1383-JP) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of INR 0.86 million, Net Earnings of INR 0.02 million.
  • Gross margins widened from 24.58% to 37.66% compared to the same period last year, operating (EBITDA) margins now 4.68% from 1.79%.
  • Earnings growth from operating margin improvements as well as one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2016-12-31 2016-09-30 2016-06-30 2016-03-31 2015-12-31
Relevant Numbers (Quarterly)
Revenues (mil) 0.86 0.95 0.65 0.96 1.06
Revenue Growth (%YOY) -19.49 -27.81 -83.35 52.56 119.42
Earnings (mil) 0.02 0.02 0.04 -0.01 0.02
Earnings Growth (%YOY) 0 127.16 -65.71 96.31 111.36
Net Margin (%) 1.75 2.33 5.55 -0.94 1.41
EPS 0 0 0 -0 0
Return on Equity (%) 0.06 0.09 0.15 -0.04 0.06
Return on Assets (%) 0.06 0.09 0.15 -0.04 0.06

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Market Share Versus Profits

Revenues History
Earnings History

532359-IN‘s change in revenue this period compared to the same period last year of -19.49% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that 532359-IN is holding onto its market share. Also, for comparison purposes, revenues changed by -9.52% and earnings by -31.82% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s earnings growth was influenced by year-on-year improvement in gross margins from 24.58% to 37.66% as well as better cost controls. As a result, operating margins (EBITDA margins) rose from 1.79% to 4.68% compared to the same period last year. For comparison, gross margins were 29.95% and EBITDA margins were 2.65% in the last reporting period.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Margins

The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating (EBIT) margins from 1.51% to 4.44% and (2) one-time items. The company’s pretax margins are now 1.75% compared to 1.41% for the same period last year.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

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Company Profile

Hit Kit Global Solutions Ltd. retails farms and vegetable products in India. It operates through following segments: Retail Business and Software Business. The Retail Business segment focuses on retail vegetable business. The Software Business segment renders E-Horoscope reports in regional languages to its customers through mobile counters. The company was founded on December 6, 1988 and is headquartered in Mumbai, India.

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