|
For the Sep 10 quarter, Swaraj Engines – a part of Mahindra and Mahindra (M&M) group of companies, reported net profit growth of 13% to Rs 10.82 crore on overall poor performance though partially offset by crash in effective tax rate. The topline grew by 24% to Rs 86.20 crore on increased sales in engine and high tech components. However fall in OPM by 100 bps limited the growth in operating profit to 17% to Rs 15.01 crore. The profits were further affected by fall in other income and interest income though partially boosted by crash in effective tax rate.
The company primarily sales its engines to Punjab Tractors (part of M&M) and also supplies high tech components to Swaraj Mazda.
Quarterly Performance
The company's operating income grew by 24% to Rs 86.20 crore on increased engine dispatches to M&M – Swaraj Division and supply of high tech components to Swaraj Mazda. The engines sales volume increased by 17% to 11452 engines apparently being the company's highest quarterly sales volume ever. The operating profit margin (OPM) fell by 100 bps to 17.4% limiting the growth in operating profit to 17% to Rs 15.01 crore. In terms of cost, as % to sales net stock adjusted, raw material cost grew by 40 bps to 75%. Also the staff cost increased by 30 bps to 5%. Only other expenditure remained flat at 2%.
The company's PBT growth was constrained at 9% to Rs 15.80 crore on fall in both interest income and other income. The interest income reduced by 23% to Rs 1.38 crore while the other income crashed by 51% to Rs 0.51 crore. Saving grace was fall in depreciation cost by 8% to Rs 1.10 crore. Nevertheless, the net profit grew by 13% to Rs 10.82 crore on fall in effective tax rate by 260 bps.
Half Year Performance
The topline grew by 25% to Rs 171.10 crore in H1 FY 11. Fall in OPM by 80 bps to 17.4% constrained the growth in operating profit to 19% to Rs 29.84 crore. Further crash in other income (by 62% to Rs 1.09 crore) and in interest income (by 26% to Rs 2.67 crore) limited the PBT growth to 8% to Rs 31.45 crore. Thankfully fall in effective tax rate by 240 bps lifted the net profit by 12% to Rs 21.51 crore.
Expansion Plan
The company has set plan for expansion of installed capacity from 36000 engines/ annum to 60,000 engines per annum. Besides this, it plans additional investment towards engineering, research and quality edges. The total project would entail investment of around Rs 40 crore which would be funded through internal accruals.
The promoters' shareholding stood unchanged at 50.6% for the quarter ended Sep 10. None of the shares' held by promoters are pledged.
The Scrip is hovering at Rs 452.60 on BSE.
|