Moderate surge in depreciation charge and big rise in tax provision put a brake on bottomline growth. AT PBT level, the company registered 15% rise in profit.

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.

Quarterly Performance

For the first quarter ended June 2016, the company has reported 7% rise in the total income from operations at Rs 84 crore.

For the quarter, the raw material cost as % of sales net of stock adjustments decreased by 150 bps at 68.2%. The employee cost rose 90 bps to 12.7% during the quarter. Other expenses rose 30 bps to 9.3%. Resultantly, Operating margins improved 30 bps 9.8%. Operating profit rose by 11% to Rs 8.2 crore on a y-o-y basis.

With 35% rise in other income to Rs 2.37 crore, PBIDT increased by 16% to Rs 10.6 crore. Interest cost fell by 75% to Rs 1 lakh. Depreciation cost increased by 22% at Rs 1.04 crore. Thus, PBT increased by 15% to Rs 9.53 crore. After considering 960 bps increase in the effective tax rate at 35.8% (58% rise in tax provison), Net Profit stayed stagnant at Rs 6.12 crore.

The company announced its earnings on 26 August 2016. The scrip closed 5.2% lower at Rs 395.3 on 29 August, 2016, the next trading day at BSE.