Swaraj Engines has reported sharp 31% jump in sales to Rs 292.28 crore led by sharp growth in volume for the quarter ended Sep 2020. Higher sales together with 20 bps expansion in operating profit margin to 13.7%, the operating profit was up by 33% to Rs 40 crore. Other income was down by 40% to Rs 2.08 crore and thus the PBIDT was up by 26% to Rs 42.08 crore. The PBT was up by 30% to Rs 36.44 crore as depreciation as % of sales stand lower. With taxation stand higher by 245% to Rs 9.32 crore, the PAT was eventually up by just 7% to Rs 27.12 crore.
- Sales for the period was higher by 31% to Rs 292.28 crore driven by higher volume. While the volume was up by 31% to 34489 numbers the per unit realization stood flat at Rs 84746.
- OPM expanded by marginal 20 bps to 13.7% thanks to lower staff and other expenses. While the material cost as % of sales was higher by 160 bps to 78.4%, the staff and OE was down by 100 bps and 70 bps respectively to 3.9% and 4%.
- Despite continued challenges on account of COVID 19, more so at suppliers' end with regard to production ramp up, the Company through its focused efforts on managing supply chain, could achieve full capacity utilization during the second quarter.
- Sharp jump in taxation (up 245% to Rs 9.32 crore) came on lower base. Sharp fall in taxation in corresponding previous period was largely as the company has opted to exercise the option permitted under section 115BAA of the Income-Tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance, 2019, Accordingly, the Company had recognized provision for Income Tax for the six months ended 30th September 2019 and re-measured its Deferred Tax Liability based on the rate prescribed in the said section. The full impact of this change has been recognized in the statement of Profit & Loss for the quarter ended 30th September 2019.
- Eventually the PAT was up by 7% to Rs 27.12 crore after accounting for higher taxation.
Half yearly performance
Sales for the period was down by 4% to Rs 409.27 crore. But with OPM contract by 50 bps, that together with lower sales, resulted in 8% fall in OP to RS 52.88 crore. The other income was down by 41% to Rs 4.14 crore and thus the PBIDT was down by 11% to Rs 57.02 crore. With interest stand lower by 100% to nil (from Rs 0.01 crore) and depreciation up by 2% to Rs 9.87 crore, the PBT was down by 13% to Rs 47.15 crore. With taxation up by 2% to Rs 12.19 crore, the fall at net profit was eventually stood at 17% to Rs 34.96 crore.
To expand capacity to cater to enhanced engine demand
Taking note of the expected enhanced engine demand in the coming years, the Board in its today's meeting also approved the engine capacity expansion plan from existing 1,35,000 units to 1,50,000 units per annum. The total projected outlay for the same would be financed through internal generations and surplus available with the Company.
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