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Swaraj Engines, part of Mahindra and Mahindra (M&M) group, achieved 19% growth in net profit to Rs 14 crore in Sep 2012 quarter aided by healthy operating performance and lower tax rate. The topline grew by 18% to Rs 121.76 crore on back of 12% growth in engine sales volume. Healthy sales, stable raw material costs and overall cost efficiency enabled 60 bps hike in operating profit margin (OPM). Thus the operating profit grew by 22% to Rs 18.65 crore. Flat other income and higher depreciation cost moderated the growth at PBT level.
Commenting on the performance, Bishwambhar Mishra, Vice Chairman of the company stated that, "considering the fact that SEL's (Swaraj engines) business is directly linked to the tractor industry, which is presently facing tough market conditions, SEL has performed admirably."
The company primarily sells engines to Swaraj Division of M&M and supplies high tech components to Swaraj Mazda.
Quarterly Performance
The operating income grew by healthy 18% to Rs 121.76 crore in Sep 2012 quarter aided by 12% growth in engine sales to 14389 units. The engine sales constitute 95% of its topline and are supplied to Mahindra & Mahindra's Swaraj tractor brand. The OPM grew by 60 bps to 15.3% aided by stable raw material costs and cost effectiveness. Thus the operating profit grew by 22% to Rs 18.65 crore. Raw material costs, as % to sales net stock adjusted, grew by meager 10 bps to 76% while other expenditure reduced by 60 bps to 4%. The staff cost was stable at 4%.
Flat other income and higher depreciation cost (up by 43%) limited the PBT growth to 18% to Rs 20.10 crore. The depreciation cost grew by notable 43% to Rs 1.40 crore while other income was flat at Rs 2.87 crore (against Rs 2.88 crore in Sep 2011 quarter). Only the interest cost reduced by 83% to Rs 0.02 crore. Nonetheless, 40 bps fall in effective tax rate lifted the net profit by 19% to Rs 14 crore.
Half Year Performance
In the half year ended Sep 2012, the topline grew by 12% to Rs 239.92 crore aided by 6% growth in engine sales volume to 28403 units. However the OPM fell by 20 bps to 15.3% on higher raw material costs. Thus the operating profit grew by limited 11% to Rs 36.68 crore. Marginal growth in other income and spike in depreciation cost (by 47%) constrained the PBT growth to 9% to Rs 39.80 crore. The net profit settled with 9% growth to Rs 27.70 crore post accounting 40 bps fall in tax rate.
- The promoters' shareholding stood unchanged at 50.6% as on 30th Sep 2012. None of the shares' held by promoters are pledged.
The scrip closed at Rs 420, up by 0.84% on BSE on 16th Oct 2012
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