Honeywell Automation India has registered 13% fall in sales for the quarter ended Mar 2020 to Rs 704.26 crore. But with OPM expand by 290 bps to 18.3%, the operating profit was up by 3% to Rs 128.55 crore. After accounting for higher other income (up 125% to Rs 33.72 crore), the PBIDT was up by 16% to Rs 162.27 crore. With interest cost stand lower by 56% to Rs 1.52 crore, the PBDT was up by 18% to Rs 160.75 crore. With depreciation stand higher by 175% to Rs 11.81 crore, the PBT was up by 13% to Rs 148.94 crore. However gained by lower tax incidence with tax rate down at 25.4% (compared to 36.1%) the PAT jumped up by 32% to Rs 111.14 crore.
- Sales were lower by 13% to Rs 704.26 crore. The value of production for the quarter was down by 13% to Rs 713.84 crore. Sales lower than value of production means build-up of inventory, which will get liquidated in coming quarters.
- Operating profit margin expanded by sharp 290 bps to 18.3% and this can be attributed to lower material cost. Material cost (including cost of traded goods) as proportion to sales net of stocks was lower by 570 bps to 46.7%. But the cost of staff and OE was up by 100 bps (to 19%) and 190 bps (to 16.2%) respectively. Thus gained by higher margin the operating profit was up by modest 3% to Rs 128.55 crore.
- After accounting for higher other income, lower interest and higher depreciation, the growth at PBT was 13% to Rs 148.94 crore.
- Taxation in absolute term was down by 21% to Rs 37.80 crore and thus gained by lower tax incidence, the PAT jumped up by 32% to Rs 111.14 crore.
Effective April 1, 2019, the Company has adopted Ind AS 116 Leases and applied the standard to all lease contracts existing on that date using the modified retrospective method, recognizing the cumulative effect of initially applying this standard as an adjustment to right-of-use asset as on April 1, 2019. Accordingly comparatives for the year ending March 31, 2019 are not retrospectively adjusted or restated. Further transition adjustments, if any, arising from refinements or authoritative interpretation guidance are recognized prospectively.
Yearly performance
Sales was up by 4% to Rs 3290.01 crore and that together with 340 bps expansion in OPM to 19.3% has resulted in 26% jump in operating profit to Rs 636.35 crore. After accounting for higher other income (up 38% to Rs 97.65 crore) as well as higher interest (up 97% to Rs 6.87 crore) and higher depreciation (up 155% to Rs 40.58 crore), the PBT was up by 24% to Rs 686.55 crore. The taxation was flat at Rs 195.07 crore, the PAT was up by 37% to Rs 491.48 crore.
Other developments
The Board of Directors have recommended dividend of Rs. 75 per equity share for the financial year ended March 31, 2020 (previous year ended March 31, 2019: Rs. 45 per equity share) for approval of shareholders. The face value of the equity share is Rs. 10 each.
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