Revenue in Q2 increased sharply by 53% to Rs 349.6 crore, from Rs 228.1 crore in previous corresponding quarter.

Established in 1981, Automotive Axles is a joint venture of Kalyani Group and Meritor Inc., USA. It manufactures drive axles, non-drive axles, front steer axles, specialty & defence axles and drum & disc brakes, and provides these products to major domestic and global manufacturers of trucks & buses.

Quarter Performance

The OPM during the second quarter ended Sept 2017 rose 60 bps to 11.2% due to decreased employee expenses. Raw material cost (as a % to sales, net of stock) rose 210bps to 69.9%. Other expenses (% of sales net of stock) fell 10 bps at 12.2%. Employee expenses fell 240bps to 6.5%.

Thus the operating profitrose 62% to Rs39.25crore. Other income stood 118% higher at Rs1.61 crore. After 78% dropin interest charges to Rs11 lakh and 1% rise in depreciation cost to Rs9.79 crore, the company's PBT more than doubled to Rs 30.96 crore. After 105% rise in tax provision to Rs 10.51 crore (70 bps drop in tax rate), net profit stood at Rs 20.45 crore, higher by 111%.

Half Year Performance:

Sales for first half ended Sept 17 rose 22% to Rs642.36 crore.

The OPM during the first half ended Sept 2017 rose 90 bps to 10.5% due to decreased raw material and employee expenses. Raw material cost (as a % to sales, net of stock) fell 60bps to 70.2%. Other expenses (% of sales net of stock) rose 50 bps at 12.6%. Employee expenses fell 80 bps to 6.7%.

Thus the operating profit rose 33% to Rs67.6crore. Other income stood 6% higher at Rs2.82 crore. After 72% drop in interest charges to Rs24 lakh and 2% rise in depreciation cost to Rs19.7 crore, the company's PBT rose 59% to Rs50.5 crore. After 57% rise in tax provision to Rs 17.16 crore (50 bps drop in tax rate), net profit stood at Rs33.34 crore, higher by 60%.

Shares of Automotive Axles is currently trading around Rs1200 at BSE.