Currently catering to a wide spectrum of automotive and non-automotive cable requirements, Suprajit Engineering has cemented itself as India's largest manufacturer of automotive cables.

Automobile cables account for about the major chunk of its revenues; with speedometers and the others accounting for the rest.

December 2013 quarter results – Consolidated sales rise 30% and PAT grows 47%

Despite adverse market conditions, for the quarter ended December 2013, Suprajit Engineering registered a good 30% rise in consolidated sales (including other operating income) to Rs 159.53 crore. OPM jumped 260 basis points to 18.8% which lifted OP growth to 50% to Rs 30.02 crore.

Other income stood at negative Rs 68 lakh (against Rs 29 lakh) and interest cost jumped 27% to Rs 3.43 crore. After providing for depreciation (up 14% to Rs 2.26 crore), PBT jumped 51% to Rs 23.65 crore.

Tax grew 62% to Rs 7.50 crore after which PAT grew 47% to Rs 16.1 crore.

Nine month consolidated sales growth improves to 15% and PBT before after EO rises 24%

For the nine month ended December 2013, consolidated sales grew 15% to Rs 390.87 crore. OPM improved 20 basis points to 17.0% which took OP up 17% to Rs 66.37 crore.

Other income stood at Rs 4.41 crore against Rs 90 lakh and interest cost jumped 29% to Rs 9.62 crore. Depreciation grew 5% to Rs 6.13 crore after which, PBT before EO grew 11% to Rs 55.03 crore.

EO gains was nil against Rs 5.18 crore. Thus PBT after EO grew 11% to Rs 55.03 crore.

Provision for tax grew 21% to Rs 17.07 crore, after which consolidated nine month net PAT grew 7% to Rs 37.96 crore.

Aftermarket and non-automotive exports business clock robust growth

Aftermarket and non-automotive exports business clocked robust growths of 35% and 45% respectively.

Capex will see the company having the world's largest cable capacities

Company has been allotted 4 acres of land in Vallam-Vadagal Industrial park, Chennai, by SIPCOT.

The Board of Directors critically assessed the business prospects for the next two years and have approved the following capex plans considering the business growth in the next two years.

• A new cable plant, measuring 80,000 sf.ft at Narsapura Industrial area, Karnataka, on the land already in possession.

• A new cable plant measuring 50,000 sq.ft to meet the customer requirements in Chennai at the recently allotted land at Vallam-Vadagal Industrial Park, Tamilnadu.

• Significant capacity expansion at the existing Pathredi plant, Rajasthan, with an additional plant measuring 110,000 sq.ft.

• Complete renovation and refurbishing of an existing plant in Bommasandra, Bangalore to relocate the aftermarket manufacturing facility to meet increased demand.

• Several balancing equipment and buildings in other existing units to fine-tune the capacities to meet additional customer requirements.

• Additional equipments to add capacity at its 100% owned subsidiary, Suprajit Automotive.

• The capex for the above plans would be approximately Rs. 60 crore.

With these capex plans spread over the next 18-24 months, the company's standalone cable capacity will exceed 200 mn cables / year and on a consolidated basis will exceed 225 mn cables / year. This would be one of the world's largest cable capacities.

Dividend

Considering the robust performance of the period, the Board of Directors have recommended an increased interim dividend of 45% (Rs. 0.45/share of Re. 1/-), as against 35% last year.

Valuation

The share price trades at Rs 49.