Established in 1993, GNA Axles is one of India's leading rear axle shafts manufacturer. Its products find applications across on-highway vehicles (LCV, MCV, HCV and buses, among others) and off -highway vehicles (agricultural tractors and machinery, forestry, construction equipment, defence and mining, among others). GNA Axles has a large variety of Axle Shafts ranging from 1.5kg to 65kg & capacity to produce upto 165kg producing about 2 million Axle Shafts annually.It also manufactures solid and hollow spindles used in assembling the axle for various vehicles and equipment.

Its products are widely used world over by the leading OEM manufacturers across USA, Sweden, Turkey, Brazil, Italy, Germany, Spain, Mexico, Japan, UK, France, China and Australia, among others. Besides, the company is also tier 1 suppliers to several Indian OEMs.

Quarter Performance:

The OPM during the third quarter ended December 2017 fell 30 bps to 16.1%due to increased raw materialexpenses. Raw material cost (as a % to sales, net of stock) rose 310 at 65.8% during Q3FY18. Other expenses (% of sales net of stock) fell 70 bps to 15.5%. Employee expenses fell 130bps to 4%.

Domestic sales during the quarter rose 32.8% to Rs 90.87 crore while export sales rose 34.6% to Rs 76.12 crore.

Thus the operating profit rose 38% to Rs26.86crore. Other income stood at Rs70 lakh, lower by 42%. PBIDT thus rose 31% to Rs 27.28 crore. After 3% rise in depreciation cost atRs6.19 crore and 43% drop in interest expense to Rs1.34crore, PBT rose 59% at Rs19.75 crore. After 65% risein tax provision (121 bps rise in tax rate) at Rs7.06 crore, net profit stood at Rs12.69crore against profit of Rs8.13crore in previous corresponding quarter, a rise of 56%.

Nine Month Performance:

For the nine months ended Dec 17, the company's topline grew 20% to Rs 465.61 crore.The OPM during 9MFY18 fell 60 bps to 15.8%due to increased raw material expenses. Raw material cost (as a % to sales, net of stock) rose 80 at 64.1% during 9MFY18. Other expenses (% of sales net of stock)rose 30 bps to 16.2%. Employee expenses fell 30 bps to 4.6%.

Thus the operating profit rose 16% to Rs73.5crore. Other income stood at Rs2.21 crore, higher by 59%. PBIDT thus rose 17% to Rs75.7 crore. After 3% rise in depreciation cost at Rs18.54 crore and 50% drop in interest expense to Rs5.24 crore, PBT rose 43% at Rs51.96 crore. After 37% rise in tax provision (150 bps drop in tax rate) at Rs17.52 crore, net profit stood at Rs34.44 crore against profit of Rs23.5 crore in previous corresponding period, a rise of 47%.

Shares of GNA Axles are currently trading 1.2% higher around Rs462.95 at BSE on 22 Jan 2018, the following trading day after earnings were announced.