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For the quarter ended Mar ‘09, Swaraj engines recorded impressive growth of 39% in its topline to Rs 49.89 crore. Owing to spike in raw material cost, its OPM declined by 340 bps constraining the operating profit growth to 14% to Rs 7.76 crore. Its PBT increased by 25% to Rs 8.31 crore courtesy 108% surge in its interest income and flat 1% growth in its depreciation cost. Further, on account of decline in its effective tax rate, the net profit was boosted by 33% to Rs 5.71 crore.
Swaraj Engines is a joint venture between Punjab Tractors (PTL) and Kirloskar Oil Engines (KOEL). The company's in-principal business is to manufacture engines for PTL (now taken over by M&M). Swaraj Engines has also been a supplier of hi-tech engine components to Swaraj Mazda.
Quarter Performance
In the quarter ended Mar '09, the company's topline reported robust growth of 39% to Rs 49.89 crore. However its operating profit margin (OPM) crashed by 340 bps to 15.6% thanks to spurt in its raw material cost. Thus it restricted the growth in its operating profit to 14% to Rs 7.76 crore. In terms of cost, as % to sales net stock adjusted, its raw material cost grew by 220 bps to 74%. Also its staff cost and other expenditure grew by 70 bps to 6% and 40 bps to 3% respectively.
It reported nil other income in quarter ended Mar '09 against Rs 0.18 crore in quarter ended Mar'08. Thus it limited the growth in its PBDIT to 11% to Rs 7.76 crore. As a boon, significant surge in its interest income and flat depreciation cost boosted the PBT by 25% to Rs 8.31 crore. Its interest income surged by whopping 108% to Rs 1.73 crore. Its depreciation cost inched by 1% to Rs 1.18 crore. Owing to decline in its effective tax rate by 430 bps, its net profit was lifted by 33% to Rs 5.71 crore.
Annual Performance
In the year ended Mar '09, the company's topline surged by impressive 66% to Rs 208.17 crore owing to increased engine supplies to Swaraj Tractors. On account of high raw material cost, its OPM crashed by 320 bps to 15.3% constraining the growth in its operating profit to 37% to Rs 31.87 crore. Further its other income slipped by 6% to Rs 0.17 crore. Its PBT surged by robust 46% to Rs 32.22 crore thanks to robust growth in its interest income and meager growth in its depreciation cost. Its interest income surged by 49% to Rs 4.87 crore. Its depreciation cost inched marginally by 2% to Rs 4.69 crore. Its net profit for the year ended Mar '09 spurted by robust 48% to Rs 21.28 crore courtesy decline in its effective tax rate by 90 bps to 34%.
The Board of Directors recommended equity dividend of Rs 5 per share in FY09.
The promoters' shareholding stands unchanged at 50.6% as on 31st Mar '09.
Currently the stock is trading around Rs 128.
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