WABCO India (previously WABCO TVS India) reported healthy 23% growth in net profit to Rs 41.84 crore on strong operating performance, higher other income including forex gain and lower tax rate despite flat net sales. The topline grew by flat 2% to Rs 249.29 crore constrained by lower sales to OEMs. However lower other expenditure on shifting expensing of vendor tools accounting policy and lower raw material costs led to robust 200 bps spike in operating profit margin (OPM). Thus the operating profit grew by 12% to Rs 57.06 core. The profits received further support from higher other income and lower tax rate.
Quarter Performance
The total operating income grew by meager 2% to Rs 249.29 crore on flat net sales. The net sales grew by 1% to Rs 237.68 crore on lower sales to OEMs. The sales to OEMs, that constitute 61% of its sales, fell by 10% to Rs 144 crore on account of sluggish offtake in medium & heavy commercial vehicle (M&HCV) industry. The M&HCV industry production fell by 21% to 69920 vehicles on demand affected by low industrial production. However the aftermarket sales grew by healthy 22% to Rs 47.50 crore while exports rose by 25% to Rs 46.10 crore.
Lower raw material costs and other expenditure led to whopping 200 bps hike in OPM to 22.9%. Thus the operating profit grew by 12% to Rs 57.06 crore. Raw material costs, as % to sales net stock adjusted, fell by 160 bps to 54%. Also the other expenditure crashed by 200 bps to 13% primarily on change in accounting policy of vendor tooling expense. The accounting policy of vendor tooling expense has been changed from expensing it to P&L to capitalizing and amortizing them over their useful lives. The staff cost grew by 170 bps to 10% taking into salary hike that was effected from July 2011.
The PBT grew by 20% to Rs 59.11 crore on spike in other income and negligible interest cost though moderated by higher depreciation cost. The other income surged by whopping 230% to Rs 6.74 crore. It was also aided by forex gain of around Rs 4 crore against Rs 1 crore in June 2011 quarter. On the other hand, depreciation cost grew by 27% to Rs 4.68 crore as it includes the amortized value of vendor tools. The net profit settled with 23% growth to Rs 41.84 crore on 140 bps crash in effective tax rate.
- The company has capitalized sum of Rs 3.80 crore of vendor tools (net of amortized) in June 2012 quarter. Thus the net profit is higher by Rs 2.73 crore in June 2012 quarter.
- The promoters' shareholding stood unchanged at 75% for the quarter ended June 2012. None of the shares' held by promoters are pledged.
The scrip closed at Rs 1456, up 0.36% on BSE on 24th July 2012
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