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Munjal Showa reported very strong earnings for the fourth quarter ended Mar 2018. On a 17% topline growth, the company registered 131%risein net profit. Strong performance at the operational level coupled with higher other income pulled up the bottomline.
Established in 1985, in technical and financial collaboration with Showa Corporation of Japan, Munjal Showa is among the pioneering global leaders in the manufacture of shock absorbers.
Munjal Showa products serve as original equipment to a wide range of Maruti Suzuki upper end cars and export models, Honda City car, complete range of Hero Honda Motorcycles, Kawasaki Bajaj Motorcycles, and Hero range of mini-motorcycles and mopeds and Honda Motorcycles and Scooters India (Pvt) Limited. In over a decade the Company's state-of-the-art Shock Absorbers, Front Fork, Struts and Window Balancers/Gas Springs have become symbols of reliability and quality for popular two and four wheeled vehicles.
Quarterly Performance:
For thefourth quarter ended Mar 18, the company has reported 17% increase in the total income from operations at Rs 419.19crore. The raw material cost as % of sales net of stock adjustments fell 140 bps to 72.3%. The other expenses (as % of sales net of stock adjustments) fell 110 bps to 11.16%. Employee cost rose 16 bps to 7.65%. Resultantly, operating margins jumped 240 bps to 8.8% leading to 60% rise in operating profit to Rs36.69 crore.
With 134% risein other income to Rs 6.57crore (vis a vis Rs 2.81 crore), PBIDT increased by 68% to Rs 43.26crore. The company's interest cost stood at Rs 5 lakh and depreciation charges fell 8% to Rs 6.69 crore. Thus, profit before tax increased by 97% to Rs 36.56 crore. After 30% risein tax provision at Rs 7.94 crore, (1120 bps dropin tax rate), the company's net profit rose 131% at Rs 28.62crore.
FY 18 performance:
For the full year ended March 2018, Munjal Showa's topline registered 8% growth to Rs 1581.42 crore. OPM rose 40 bps to 7.2% leading to 14% rise in operating profits at Rs 113.1 crore. The raw material cost as % of sales net of stock adjustments rose 23 bps to 73.59%. The other expenses (as % of sales net of stock adjustments) fell 56bps to 11.37%. Employee cost was steady at 7.9%.
With 18% rise in other income to Rs 20.68 crore (vis a vis Rs 17.59 crore), PBIDT increased by 14% to Rs 133.8crore. The company's interest cost stood at Rs 15 lakh vis a vis Rs 5 lakh and depreciation charges fell 3% to Rs 28.24 crore. Thus, profit before tax increased by 20% to Rs 105.4 crore. After 2% risein tax provision at Rs 27.88 crore, (452 bps dropin tax rate), the company's net profit rose 28% to Rs 77.52crore.
Shares of Munjal Showa are currently trading around Rs 237 at BSE
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