• High single digit fall in sales (down 9%) was largely due to lower volume as well as realization. While the sales volume for the period was down by 4% to 20827 numbers, the per unit realization was down by 4% to Rs 84088. Lower volume was largely due to weak demand from end user industry i.e. tractors in Q4FY20. Tractor industry degrew 9% in Q4FY20.

• OPM contracted by 90 bps to 13.4% largely due to higher staff cost. The material cost as proportion of sales net of stocks was down by 90 bps to 75.1% and that of staff cost was up by 90 bps to 5.8%. However the OE was flat at 5.4%. Thus hit by lower sales and lower margin, the OP was down by 15% to Rs 23.38 crore.

• With OI stand lower by 19% to Rs 2.96 crore, the de-growth at PBIDT was 15% to Rs 26.34 crore. And with interest cost nil for the quarter compared to Rs 0.01 crore in corresponding previous period, the depreciation was lower by 7% to Rs 4.91 crore. Thus hit by lower OI and lower depreciation the PBT was down by 17% to Rs 21.43 crore.

• With taxation (net of deferred tax) for the period down by sharp 39% to Rs 5.59 crore the fall at PAT was 5% to Rs 15.84 crore.

• Sharp fall in taxation was largely as the company has opted to exercise the option permitted under section 115BAA of the Income-Tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance, 2019.

Yearly performance

Sales for the period was down by 11% to Rs 773.30 crore. But with OPM contract by 210 bps that together with lower sales resulted in 24% fall in operating profit to Rs 100.43 crore. The other income was down by 17% to Rs 12.78 crore and thus the PBIDT was down by 23% to Rs 113.21 crore. With interest stand lower by 89% to Rs 0.01 crore and depreciation up by 3% to Rs 20.13 crore, the PBT was down by 27% to Rs 93.07 crore. With taxation down by 51% to Rs 22.03 crore, the fall at net profit was eventually restricted at 14% to Rs 71.04 crore.

To pay dividend @ 400% for 2019-20

Dividend

The Board of Directors of the company in their meeting on May 8, 2020 has recommended an equity dividend of 250% (Rs. 25.00 per share) for the financial year ended 31st March, 2020. Further, the Board, over and above the said normal dividend, has also recommended a special dividend payment of 150% (Rs. 15.00 per share), taking the total dividend to 400% (Rs. 40.00 per share) for the FY 2019-20.

Outlook

The spread of COVID -19 has affected the economic activity across the Globe including India. This event could affect the business of the Company and the impact of the same will depend on future developments that cannot be predicted reliably at this stage. The Company will closely monitor any material changes to future economic conditions impacting its business. Company's operations, which were suspended since 23rd March, 2020, has now started after obtaining the necessary permissions from the local authorities and will increase its activity level gradually.