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GNA Axlesreported 16% drop in net profit to Rs 6.12 crore on 5% drop in net sales to Rs 126.32crore for the fourth quarter ended March 2017. Poor performance at the operational level coupled with higher tax provision pulled down bottomline. The quarter witnessed big drop in margins. Higher other income and drop in interest and depreciation charges restricted further drop in bottomline.
Weakness in North American commercial vehicle segment has impacted company's Q4 performance in FY17.
GNA is amongst the world's leading manufacturers of automotive transmission components. GNA Axles has a large variety of Axle Shafts ranging from 1.5kg to 65kg & capacity to produce upto 165kg producing about 2 million Axle Shafts annually.
Quarter Performance:
The OPM during the thirdquarter ended March 2017 fell 360 bps to 13.4%due to increased employee and other expenses. Raw material cost (as a % to sales, net of stock) fell 340 bps at 59%. Other expenses (% of sales net of stock) rose by 440 bps to 20.3%. Employee expenses rose 130 bps to 6.3%.
Thus the operating profit fell 25% to Rs 16.97crore. Other income stood 300% higher at Rs 1.52 crore. After 29% drop in depreciation cost to Rs 5.89 crore and 43% drop in interest expense to Rs 1.97 crore, PBT fell 6% at Rs 10.63 crore. After 14% risein tax provision (730 bps rise in tax rate) at Rs 4.51 crore, net profit stood at Rs 6.12 crore against profit of Rs 7.32crore in previous corresponding quarter, a drop of 16%.
Annual Performance:
Sales for year ended Mar 2017 rose 1% at Rs 513.41 crore.
The OPM during the yearfell by 50 bps to 15.7%due to increased employee and other expenses. Raw material cost (as a % to sales, net of stock) fell 100 bps at 62.3%. Other expenses (% of sales net of stock) rose by 60 bps to 16.9%. Employee expenses rose 70 bps to 5.2%.
Thus the operating profit fell 2% to Rs 80.4crore. Other income stood seven-fold higher at Rs 2.91 crore. After 12% drop in depreciation cost to Rs 23.94 crore and 23% drop in interest expense to Rs 12.52 crore, PBT rose 19% at Rs 46.89 crore. After 30% rise in tax provision (290 bps rise in tax rate) at Rs 17.29 crore, net profit stood at Rs 29.6 crore against profit of Rs 25.96 crore in previous year, a rise of 14%.
The company is targeting 13-15% growth in FY18 if domestic market will perform better.
The company has finished its IPO through fresh issue of 63,00,000 equity shares at a price of Rs 207.
Shares of GNA Axles are currently trading around Rs 230 at BSE.
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