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Tata Elxsi for the quarter ended Jun 2020 reported 9% fall in revenue to Rs400.49 crore over Rs 438.89 crore of revenue registered in sequential previous quarter ended Mar 2020. Lower sales on sequential basis is largely due to lower transportation vertical revenue as the revenue of Media&Communication as well as Healthcare vertical registered 3.3%QoQ and 5.3%QoQ growth for the quarter. As OPM contractedby 160 bps to 23.1% from 24.7% in sequential previous quarter the fall in operating profit stood increasedat15% to Rs92.71 crore. With other income standingflat at Rs13.45 crore, the PBIDT was down by 13% to Rs 106.16 crore. Excluding exchange gain (up 65%QoQ to Rs 4.55 crore) the other income was down 16%QoQ to Rs 8.90 crore. After accounting for lower interest cost (down 4% to Rs 1.39 crore) and flat depreciation (up 0% to Rs 10.82 crore), the PBT was down by 14% to Rs93.95 crore. Eventually the PAT was down by 16%qoq to Rs68.87 crore with effective tax rprevious standing higher at 26.7% (compared to 25.2% in corresponding previous period) even as taxation was down by 9% to Rs 25.08 crore in absolute terms.
Quarterly performance YoY comparison
Sales for the quarter ended June 2020 was up by 11%yoy to Rs400.49 crore. But with OPM expandingby 380 bps to 23.1% (from 19.3% in corresponding previous quarter), the operating profit was up by 33% to Rs 92.71 crore. But the PBIDT was up by 30% to Rs106.16crore with other income (net of forex gain) up by 11% to Rs 13.45 crore. Other income excluding exchange gain was down by 33% to Rs 8.90 crore with forex gain at Rs 4.55 crore, a swing of Rs5.67 crore. Hit further by higher interest and higher depreciation, the growth at PBT was 34% to Rs93.95 crore. Eventually the PAT was up by 41% to Rs 68.87 crore with taxation higher by 17%yoy to Rs25.08 crore.
Annual performance
Sales for the period was up by 1%yoy to Rs 1609.86 crore and with OPM crash by 470 bps to 21.3% (from 26.0%), the operating profit witnessed sharp fall of 17%yoy to Rs 343.00 crore.
Sharp contraction in OPM is largely as the company account/charge Rs 21.63 crore of expense towards special retiral benefit payable to managing director made during Q2FY20 under the head employee benefit expenses. Excluding this expense from staff cost, the OPM would have stood at 22.7%, a fall of 330 bps from 26% in corresponding previous period. Thus the operating profit would have been down by 12%yoy to Rs 364.63 crore.
With other income stand higher by 34% to Rs 58.41 crore, the fall at PBIDT has moderated to stand at 12% to Rs 401.42 crore. The PBT was down by 19% to Rs 352.44 crore hit further by higher interest (up at Rs 5.56 crore against nil) and higher depreciation (up 73% to Rs 43.41 crore). After accounting for taxation (down 33% to Rs 96.34 crore), the fall at PAT was restricted at 12% to Rs 256.10 crore.
Management comment
ManojRaghavan, CEO and Managing Director of the company said, "It was a pretty satisfying quarter - Although we did see general sluggishness across all verticals at the end of last quarter and beginning of this quarter, the Media & Communications and Healthcare verticals recovered strongly to post sequential growth. Auto continues to be muted though. But I am really pleased with how we have successfully managed to institutionalize remote working and continue to serve our customers across the world seamlessly. I would like to thank all employees for embracing this change so quickly and continuing to deliver and contribute to our success. And of course, to all our customers who have stood with us, in these very challenging times".
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