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Results
11-Aug-23
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Analysis
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Frontier Springs
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Sales up 8%, net down 5%
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Standalone Net sales (including other operating income) of Frontier Springs for the quarter ended Jun 2023 has increased 7.69% to Rs 25.49 crore. Operating profit margin has declined from 14.36% to 13.65%, leading to 2.35% rise in operating profit to Rs 3.48 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 48.18% to 50.42%. Employee cost increased from 3.60% to 3.79%. Other expenses fell from 34.77% to 32.64%. Other income fell 64.29% to Rs 0.05 crore. PBIDT fell 0.28% to Rs 3.53 crore. Provision for interest fell 14.29% to Rs 0.06 crore. PBDT remained nil. Provision for depreciation rose 20.55% to Rs 0.88 crore. Profit before tax down 5.47% to Rs 2.59 crore. Provision for tax was expense of Rs 0.73 crore, compared to Rs 0.78 crore. Effective tax rate was 28.19% compared to 28.47%. Profit after tax fell 5.10% to Rs 1.86 crore. Commenting on the performance, Kapil Bhatia, Managing Director, said:
“I am delighted to share our Q1FY24 performance update, which showcases a promising
start to the year. The robust performance is visible across our business verticals - Coil Springs
and Forging.
However, a recent shift in the inspection policy by the Indian Railways did momentarily
affect our performance. With the inspection responsibilities now transitioning to private
parties, there was a brief adjustment period, resulting in delays in inspection and
subsequent recording of our revenues. This represents an impact of approximate 10% in our
reported top line and a consequent impact on profitability. We remain optimistic about
addressing this in the Q2FY24.
I am pleased to share with you that we are fully booked with orders for the year across
both Coil Springs and Forging business verticals, ensuring a clear trajectory of growth for
the year ahead. But what excites us more, is the launch of our Air Springs facility, which we
anticipate to be a significant growth engine for the future. As of now, we have
”Conditional Approvals" from RDSO that permit us to produce Air Springs for trial runs.
However, by Q2FY24, we anticipate approval as a ”Developmental Source", paving the
way for us to bid for 20% of all Air Springs tenders by the Indian Railways. On the successful
delivery of Air Springs for 500 coaches, our status will elevate to a ”Regular Source",
enabling us to bid for all related tenders. We target achieving this status by Q1FY25.
In anticipation of the opportunity ahead, we have established an additional shed
exclusively for Air Springs manufacturing using our internal accruals. This unit is on the verge
of initiating commercial production, post the necessary approvals, and will augment our
production capacity to ~500 Air Springs monthly.
The Indian Government`s unwavering focus on modernising the Indian Railways paints a
promising picture for our future prospects. While the contributions from Air Springs to our
financials will gain momentum from the next financial year, we are confident of achieving
a growth of 25%+ in the present year on the back of strong orders in Coil Springs and
Forgings. Furthermore, our new Air Springs product promises superior margins compared to
the traditional Coil Springs and Forging verticals. Once we achieve peak production
capacity, we envisage a 22%+ EBITDA margins for our Air Springs business.
In the last fiscal, profitability faced headwinds owing to fixed pricing contracts and sudden
price escalations in primary raw materials such as iron and steel. However, with raw
material prices now stabilising and contract prices holding firm, we foresee a positive
turnaround in profitability this year.
I thank our stakeholders for their continuous support and look forward to an exciting journey
ahead.”
Promoters’ stake was 51.76% as of 30 June 2023 ,compared to 51.76% as of 30 June 2022 . | Frontier Springs : Standalone Results | | Quarter ended | Year ended |
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| Particulars | 202306 | 202206 | Var.(%) | 202303 | 202203 | Var.(%) |
|---|
| Net Sales (including other operating income) | 25.49 | 23.67 | 7.69 | 107.36 | 83.66 | 28.33 | | OPM (%) | 13.65 | 14.36 | -71 bps | 11.79 | 14.61 | -281 bps | | OP | 3.48 | 3.40 | 2.35 | 12.66 | 12.22 | 3.60 | | Other Inc. | 0.05 | 0.14 | -64.29 | 0.64 | 0.98 | -34.69 | | PBIDT | 3.53 | 3.54 | -0.28 | 13.30 | 13.20 | 0.76 | | Interest | 0.06 | 0.07 | -14.29 | 0.33 | 0.28 | 17.86 | | PBDT | 3.47 | 3.47 | 0.00 | 12.97 | 12.92 | 0.39 | | Depreciation | 0.88 | 0.73 | 20.55 | 3.2 | 2.85 | 12.28 | | PBT | 2.59 | 2.74 | -5.47 | 9.77 | 10.07 | -2.98 | | PBT before EO | 2.59 | 2.74 | -5.47 | 9.77 | 10.07 | -2.98 | | EO Income | 0 | 0 | - | 0 | 0 | - | | PBT after EO | 2.59 | 2.74 | -5.47 | 9.77 | 10.07 | -2.98 | | Taxation | 0.73 | 0.78 | -6.41 | 2.53 | 2.56 | -1.17 | | PAT | 1.86 | 1.96 | -5.10 | 7.24 | 7.51 | -3.60 | | P/(L) from discontinued operations net of tax | 0 | 0 | - | 0 | 0 | - | | Net profit after discontinued operations | 1.86 | 1.96 | -5.10 | 7.24 | 7.51 | -3.60 | | EPS (Rs)* | 4.72 | 4.97 | -5.10 | 18.38 | 19.06 | -3.60 | | | * EPS is on current equity of Rs 3.94 crore, Face value of Rs 10, Excluding extraordinary items. | | # EPS is not annualised | | bps : Basis points | | EO : Extraordinary items | | Figures in Rs crore | | Source: Capitaline Corporate Database |
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