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In the quarter ended Sep 10, Automotive Axles, rear axle assemblies' manufacturer, reported net profit growth of 36% to Rs 9.48 crore constrained by fall in profit margins. The net sales grew by impressive 75% to Rs 166.97 crore on back of growth across both domestic sales and exports. However crash in operating profit margin (OPM) by 380 bps limited the operating profit growth to 32% to Rs 19.56 crore. Further increase in interest cost, depreciation cost and effective tax rate and fall in other income limited the net profit growth.
Quarter Performance
The company's net sales grew by impressive 75% to Rs 166.97 crore in Sep 2010 quarter backed by growth across both markets. The domestic sales, that contributes 95% to total, grew by robust 72% to Rs 157.79 crore. Also the exports grew by whopping 135% to Rs 9.18 crore. However impressive sales did not get translated at operating level due to increased expenses. The OPM fell by 380 bps to 11.7% limiting the growth in operating profit to 32% to Rs 19.56 crore. In terms of cost, as % to sales net stock adjusted, raw material cost grew by 80 bps to 70%. Also the other expenditure increased by 300 bps to 11%. Only the staff cost slipped by 50 bps to 7%.
The PBT grew by limited 29% to Rs 13.18 crore on poor performance on non operating side. The interest cost spurted by whopping 124% to Rs 1.41 crore while the depreciation cost grew by 21% to Rs 5.28 crore. Also the other income fell by 27% to Rs 0.31 crore. Further increase in effective tax rate by 260 bps constrained the growth in PAT before PPA to 24% to Rs 9.50 crore. Saving grace was crash in PPA (tax pertaining to previous period) that lifted the net profit by healthy 36% to Rs 9.48 crore.
Annual Performance
In year ended Sep 2010, the topline grew by whopping 151% to Rs 669.73 crore driven by robust growth in both markets especially domestic. The domestic sales grew by whopping 159% to Rs 642.29 crore contributing 96% to total. The exports increased by robust 45% to Rs 27.44 crore. Increase in OPM by 90 bps to 13.2% lifted the operating profit by significant 168% to Rs 88.14 crore. Fall in interest cost and marginal increase in depreciation cost boosted the PBT before EO by whopping 409% to Rs 65.89 crore. The PAT before PPA surged by outstanding 452% to Rs 44.09 crore on 390 bps crash in effective tax rate and nil EO expense (against 0.27 crore in year ended Sep 09). However on accounting PPA, the net profit growth was constrained, though to substantial 356% to Rs 44.07 crore.
The Board of Directors have recommended final dividend of Rs 8.50 per equity share of Rs 10 each for year ended Sep 2010.
The promoter's % of share holding is constant at 71.04% as on quarter ended Sep ‘10. The promoters' have pledged ‘nil' shares of the company.
The scrip is trading at Rs 466 on BSE
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