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In the Dec 2010 quarter, Sundram Fasteners' net profit grew by 31% to Rs 28.01 crore largely aided by fall in effective tax rate though constrained on operating side and accounting forex loss (against forex gain). The topline grew by 29% to Rs 465.49 crore. High input cost, increased usage of captive power, increased power tariff and expensive third party sourced power purchase limited growth in the operating profit margin (OPM) to 10 bps constraining the operating profit growth to 30% to Rs 57.54 crore. Accounting forex loss (against forex gain in Dec 09 quarter), the PBT growth was limited to 16% to Rs 35.25 crore.
Quarter Performance
The company's topline grew by 29% to Rs 465.49 crore in Dec 10 quarter. Out of this, domestic sales grew by healthy 30% to Rs 336.37 crore while the exports grew by 27% to Rs 128.56 crore. The OPM grew by flat 10 bps to 12.4% constrained by increased raw material costs, hike in transportation costs, hike in power tariff, additional usage of captive power and purchase of expensive third party sourced power. Thus the operating profit growth was limited to 30% to Rs 57.54 crore. Raw material cost, as % to sales net stock adjusted, grew by 30 bps to 48%. Also the stores & spares cost increased by 120 bps to 11%. Only the staff cost and other expenditure declined by 60 bps to 9% and 50 bps to 20% respectively.
The PBT grew by limited 16% to Rs 35.25 crore largely constrained on accounting forex loss of Rs 2.98 crore (against forex gain of Rs 3.51 crore in Dec 09 quarter). The saving grace was marginal growth in interest cost by 3% to Rs 5.65 crore and depreciation cost by 14% to Rs 13.89 crore. Nevertheless, crash in effective tax rate by 880 bps lifted the net profit by healthy 31% to Rs 28.01 crore.
Nine Month Performance
In nine month ended Dec 2010, the topline grew by healthy 37% to Rs 1336.58 crore. The domestic sales grew by 34% to Rs 978.27 crore while the exports surged by robust 47% to Rs 357.11 crore. Fall in OPM by 70 bps to 12.9% constrained the growth in operating profit to 30% to Rs 172.84 crore. Fall in interest cost (by 24%) and marginal growth in depreciation cost (by 12%) was partially offset by forex loss (against forex gain in nine month ended Dec 09) resulting in growth of 33% to Rs 111.05 crore in PBT. Fall in effective tax rate by 460 bps led to robust 42% growth to Rs 81.42 crore in net profit.
For period ended Dec 10, all subsidiary companies have performed better than previous year. Sales and other income of subsidiaries before adjustment for inter-company sales was at Rs 511.48 crore as against Rs. 399.59 crore in corresponding previous period. The subsidiaries made a PBT of Rs.7.82 crore as against a net loss of Rs 29.42 crore during the same period in the previous year.
The promoter's shareholding remained unchanged to 49.53% as on 31st Dec 2010. The promoters' have pledged ‘nil' shares of the company.
The scrip closed at Rs 48.55 on BSE.
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