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 third quarter ended December 2016, the company has reported 1% rise in the total income from operations at Rs87.4 crore.

For the quarter, the raw material cost as % of sales net of stock adjustments decreased by 120 bps at 66.8%. The employee cost rose 100 bps to 11.9% during the quarter. Other expenses rose 80 bps to 9.5%. Resultantly, Operating margins fell 10 bps to 12.4%. Operating profit stood at a steady Rs 10.9 crore.

With 52% rise in other income to Rs3.19 crore, PBIDT increased by 8% to Rs14 crore. Interest cost fell by 50% to Rs1 lakh. Depreciation cost increased by 19% at Rs1.13 crore. Thus, PBT increased by 8% to Rs12.9 crore. After considering 290 bps decrease in the effective tax rate at 26.59% (3% drop in tax provison), Net Profit rose 12% at Rs 9.47crore.

Nine Month Performance:

For the nine months ended December 2016, the company has reported 7% rise in the total income from operations at Rs268.12 crore.

For the period, the raw material cost as % of sales net of stock adjustments decreased by 190 bps at 66.9%. The employee cost rose 90 bps to 12.2% during the period. Other expenses rose 55 bps to 9.55%. Resultantly, Operating margins rose 50 bps to 11.4%. Operating profit stood 12% higher at Rs 30 .56 crore.

With 39% rise in other income to Rs10.3 crore, PBIDT increased by 18% to Rs40.81 crore. Interest cost fell by 44% to Rs5 lakh. Depreciation cost increased by 13% at Rs3.13 crore. Thus, PBT increased by 18% to Rs37.68 crore. After considering 280 bps increase in the effective tax rate at 30.2% (30% rise in tax provision), Net Profit rose 14% at Rs26.29 crore.

The scrip is trading around Rs 600 currently at BSE.