Revenue in Q3 increased sharply by 43% to Rs407.93 crore, from Rs 285.32 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 third quarter ended Dec 2017 rose 180 bps to 10.8% due to decreased expenses on all fronts. Raw material cost (as a % to sales, net of stock) fell 130bps to 70.2%. Other expenses (% of sales net of stock) fell 40 bps at 12.3%. Employee expenses fell 15bps to 6.8%.

Thus the operating profitrose 73% to Rs44.09crore. Other income stood 75% higher at Rs1.45 crore. After 9% risein interest charges to Rs12 lakh and 18% rise in depreciation cost to Rs11.63 crore, the company's PBT more than doubled to Rs 33.79 crore. After 103% rise in tax provision to Rs 11.48 crore (52 bps drop in tax rate), net profit stood at Rs 22.31 crore, higher by 108%.

Half Year Performance:

Sales for first nine months ended Dec 17 rose 29% to Rs1050.29 crore.

The OPM during the first nine months ended Dec 2017 rose 120 bps to 10.6% due to decreased raw material and employee expenses. Raw material cost (as a % to sales, net of stock) fell 80 bps to 70.2%. Other expenses (% of sales net of stock) rose 17bps at 12.48%. Employee expenses fell 50 bps to 6.8%.

Thus the operating profit rose 46% to Rs111.7crore. Other income stood 6% higher at Rs4.28 crore. After 63% drop in interest charges to Rs36lakh and 8% rise in depreciation cost to Rs31.33 crore, the company's PBT rose 75% to Rs84.29 crore. After 73% rise in tax provision to Rs28.64 crore (50 bps drop in tax rate), net profit stood at Rs55.65 crore, higher by 76%.

Shares of Automotive Axles is currently trading 0.9% lower around Rs1772 at BSE on 14 Feb 2018, the following day after earnings were announced.