Indian Nippon Electricals registered weak performance for the year and fourth quarter ended March 2014. Though the company's topline managed to grow in fourth quarter (with turnaround in fortune in 2/3 wheelers among total automobile sector), margins and bottomline slipped for the quarter and the year.
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 digital and analog ignition products for two/three wheelers and portable engines.
Annual Performance
For the year ended March 2014, the company has reported 2% drop in the total income from operations at Rs 262.67 crore.
For the year, the raw material cost as % of sales net of stock adjustments has increased 160 bps to 70%. The employee cost rose 140 bps to 11.3% in FY 13-14. Other expenses rose by 11 bps to 9.3%. Resultantly, Operating margins slipped by 320 bps 9.3%. Operating profit fell by 27% to Rs 24.53 crore on a y-o-y basis.
With 8% drop in other income to Rs 7.31 crore, PBIDT decreased by 23% to Rs 31.84 crore. Interest cost fell by 33% to Rs 12 lakh. Depreciation cost decreased by 8% at Rs 5.62 crore. Thus, PBT decreased by 26% to Rs 26.1 crore. After considering 538 bps increase in the effective tax rate at 24.7% (5% drop in tax provison), Net Profit fell by 31% to Rs 19.66 crore.
Quarterly Performance
For the fourth quarter ended March 2014, the company has reported 9% rise in the total income from operations at Rs 73.65 crore.
For the quarter, the raw material cost as % of sales net of stock adjustments increased by 360 bps at 69.3%. The employee cost rose 260 bps to 11.6% during the quarter. Other expenses fell by 38 bps to 9.4%. Resultantly, Operating margins fell by 610 bps 9.3%. Operating profit slipped by 34% to Rs 6.9 crore on a y-o-y basis.
With 48% drop in other income to Rs 1.12 crore, PBIDT decreased by 36% to Rs 8 crore. Interest cost fell by 33% to Rs 4 lakh. Depreciation cost decreased by 21% at Rs 1.62 crore. Thus, PBT decreased by 39% to Rs 6.34 crore. After considering 650 bps increase in the effective tax rate at 25.55% (18% drop in tax provison), Net Profit fell by 44% to Rs 4.72 crore.
- The promoters' share in the total shareholding stood unchanged at 66.39% in Mar 14. Promoters have pledged nil shares of the company.
- The company announced its earning on 23 May 2014. The stock closed 1% lower at Rs 215.25 after hitting a high of Rs 227 and a low of Rs 208 earlier during the day at BSE.