Half yearly performance

Sales was down by 39% to Rs 1262.50 crore and with 130 bps contraction in OPM to 15.3%, the operating profit was down by 44% to Rs 193.70 crore. After accounting for higher OI, lower interest and higher depreciation the PBT was down by 55% to Rs 106.84 crore. With taxation stand lower by 59% to Rs 28.63 crore, the PAT was down by 54% to Rs 78.21 crore. Eventually the net profit after MI was down by 54% to Rs 75.72 crore with MI was up by 17% to Rs 75.72 crore.

Other developments

The three foreign subsidiaries of the Group had financial years ending on December 31, whereas the parent company along with its domestic subsidiaries have the year end of March 31. During the previous year, such foreign subsidiaries had aligned their financial year end with that of the parent company for consolidation purposes, eliminating a 3 month time lag for incorporating the results of such foreign subsidiaries with the consolidated financial results of the Group. As a result of this change, the consolidated financial results for the year ended March 31, 2020 and half year ended September 30, 2019 also includes the financial results of such foreign subsidiaries for the period January 01, 2019 to March 31, 2019. This has resulted in increase in revenue from operations by Rs. 100.41 crores and reduction in profit after tax by Rs. 1.38 crores.

The Board at its meeting held today, declared an interim dividend of Rs. 1.30 per share (130 %) for the financial year 2020-21 and the same will be paid to the members/beneficial owners, whose name appear in the register of members / register of beneficial owners maintained by the Depositories as on the record date i.e. November 14, 2020.

Capex of Rs 121 crore for FY21

The Company proposes to spend about Rs. 150 Crores towards capital expenditure for the Financial Year 2021 as part of capacity expansion of existing lines of business. The Company has already incurred Rs. 63 Crores towards capital expenditure for the half-year ended September 30, 2020. The Company will be prudent about its capital expenditure program for the current Financial Year.

New unit at Sri City receives order from Europe

SEZ Sundram Fasteners Limited had set up a SEZ Unit at Sri City, Andhra Pradesh with an initial investment of Rs100 crore. The new Unit has received an order from a leading European manufacturer to manufacture and export high precision engineering components. The SEZ Unit is developing parts for hybrid Electric Vehicles which is expected to give further thrust for the export business of the Company.

Foray in to Aerospace and Defence Sectors

The Company proposes to de-risk its business model and shelter itself against the cyclical nature of the auto industry. The Company is focusing on non-auto segment such as aerospace and defence sectors. In order to further SFL's growth in non-auto segment, the Company incorporated a wholly-owned subsidiary named 'TVS Engineering Limited'. TVS Engineering Limited would manufacture wide spectrum of forged, machined parts, missile parts, precision machined parts, titanium and stainless steel fasteners, torsion bars, transmission parts and engine parts like con rods, crank shafts engine liners pumps & critical fasteners. The Company has earmarked Rs. 100 crores of its capacities for defence opportunities.

Ventures into plastic parts production

TVS Upasana Limited, a wholly-owned subsidiary of the Company has commenced a new Division at its Plant located at VallamVadagal, Sriperumbudur, Kancheepuram District with an investment of Rs. 17 Crores proposed to be spent over a period of next 3 years. The new Division has been set up to manufacture radiator cap cover, radiator cap housing, radiator cap lid and filter element parts. The products manufactured by the Company will be supplied to domestic as well as MNC customers.