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For the March 11 quarter, India Nippon Electricals' standalone net profit grew by marginal 8% to Rs 5.67 crore largely impacted by weak operating performance. The topline grew by 22% to Rs 57.33 crore. However crash in operating profit margin (OPM) by 240 bps constrained the growth in operating profit to meager 1% to Rs 6.69 crore. Nevertheless, the net profit received support from increase in other income and fall in effective tax rate.
India Nippon Electricals is joint venture between Lucas Indian Service, a wholly-owned subsidiary of Lucas-TVS and Kokusan Denki Co., Japan - a group company of Hitachi Japan. It manufactures entire range of 2/3 wheelers, digital and analog ignition products
Quarterly Performance
The standalone topline of electronic ignition system company grew by 22% to Rs 57.33 crore in March 2011 quarter. Increased staff cost led to 240 bps fall in OPM to 11.7%. Thus the operating profit growth was drastically constrained to flat 1% to Rs 6.69 crore. Staff cost, as % to sales net stock adjusted, grew by 260 bps to 12%. Also the other expenditure increased by 70bps to 10%. Only the raw material cost fell by 150 bps to 66%.
The PBT grew by 6% to Rs 7.05 crore on support from other income though limited by depreciation cost. The other income grew by whopping 77% to Rs 2.05 crore while the depreciation cost increased by notable 51% to Rs 1.65 crore. The interest cost was intact at Rs 0.04 crore. Nevertheless, fall in effective tax rate by 160 bps lifted the net profit by 8% to Rs 5.67 crore.
Annual Performance
In FY 11, the standalone operating income grew by healthy 35% to Rs 229.46 crore. With nil change in OPM at 14%, the operating profit grew by robust 35% to Rs 32.04 crore. Fall in other income by 4% to Rs 5.63 crore impacted the profit growth though it was partially compensated by marginal 16% growth in depreciation cost to Rs 4.15 crore and fall in interest cost by 6% to Rs 0.17 crore. The net profit settled with 28% growth to Rs 25.43 crore constrained by 100 bps hike in effective tax rate.
On consolidated basis, the operating income grew by robust 35% to Rs 229.42 crore while the net profit increased by 21% to Rs 21.58 crore.
Board of Directors have recommended final dividend of Rs 1 per share. Thus the total dividend including two interim dividends aggregating to Rs 8.50 per share is Rs 9.50 per share for FY 11.
The promoters' shareholding stands unchanged at 66.39% in March 2011. None of the shares' held by promoters are pledged.
The Scrip is hovering at Rs 268 on BSE.
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