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Sundram Fasteners (SFL) is a part of the TVS Group, headquartered in Chennai, India. The product range consists of high-tensile fasteners, powder metal components, cold extruded parts, hot forged components, radiator caps, automotive pumps, gear shifters, gears and couplings, hubs and shafts, tappets and iron powder. Over the years, the company has acquired cutting-edge technological competencies in forging, metal forming, close-tolerance machining, heat treatment, surface finishing and assembly.
September 2014 quarter results
For the quarter ended September 2014, it registered a solid 23% growth in sales to Rs 618.75 crore.
Exports sales grew 21% to Rs 227.33 crore and domestic sales were up 25% to Rs 378.74 crore.
OPM improved 440 basis points to 16.5% which saw OP rising 68% to Rs 102.31 crore.
Other income crashed 82% to Rs 3.10 crore and interest cost rose 43% to Rs 23.36 crore.
Interest cost includes forex loss of Rs of Rs 17.93 crore against Rs 8.30 crore, up 116%. Interest cost fell 20% to Rs 6.43 crore.
As depreciation fell 21% to Rs 15.19 crore, PBT grew 57% to Rs 66.86 crore.
Tax grew 120% to Rs 15.77 crore after which PAT ended up 45% to Rs 51.09 crore.
Six months results
For the six months ended September 2014, sales grew 17% to Rs 1197.37 crore.
Exports grew 24% to Rs 455.22 crore.
OPM improved 450 basis points to 16.2% which saw OP rising 61% to Rs 194.13 crore.
Other income crashed 89% to Rs 4.21 crore and interest cost fell 7% to Rs 36.17 crore.
Interest cost includes forex loss of Rs of Rs 26.20 crore against Rs 22.41 crore, up 17%. Interest cost fell 34% to Rs 10.97 crore.
As depreciation rose 12% to Rs 42.69 crore, PBT grew 46% to Rs 119.48 crore.
Pursuant to the Companies act 2013, the management has provisionally assessed the useful life of fixed assets. As a result the depreciation charge for the six months is higher by Rs 1.29 crore.
Tax grew 78% to Rs 30.27 crore after which PAT ended up 38% to Rs 89.21 crore.
Dividend
Board of Directors of the Company at its meeting held on November 06, 2014, inter alia, have approved payment of Interim Dividend @ Rs. 0.85 per equity share of Re. 1 each for the financial year ending March 2015.
Outlook
The pace of growth in domestic market will improve going forward, as the government addresses various problems faced by the economy and more particularly the automotive sector.
Prospects for increasing exports appear to be bright
The company expects to improve its overall performance through development of new products for existing customers and by winning new customers besides increased exports.
Subsidiary companies are expected to show better performance during 2014-15.
Valuation
The share price trades at Rs 157.
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