While goodperformance at the operational level was there at one hand, on the other, lower other income, higher interest and depreciation charges coupled with higher tax provision put some brake on bottomline growth.

Minda Industries, is a part of UNO MINDA who is a technology leader in auto components industry is a leading supplier of proprietary automotive solutions to OEMs as Tier 1. It manufactures automobile components for OEMs.

Quarter Performance

The OPM during the second quarter ended September2016 rose by 60 bps to 10.3% due to decreased raw material expenses cum purchase of stock in trade. Raw material cost cum purchase of stock in trade (as a % to sales, net of stock) fell by 270bps to 63.5%. Other expenses (% of sales net of stock) rose by 110bps to 13.8%. Employee expenses rose60 bps to 12.4%.

Thus the operating profit rose by 48% to Rs 93.2crore. Other income stood at Rs 4.06 crore, lower by 12%. After 40% rise in depreciation cost to Rs 34.41 crore and 23% rise in interest cost to Rs 10.08crore, PBT rose 51% to Rs 52.77 crore. After 290bps risein tax rate, tax provision stood 69% higherat Rs 14.05 crore. Thereafter, net profit stood at Rs 38.42 crore against profit of Rs 26.07 crore in previous corresponding quarter (after adjusting for minority interest and share of profits), a rise of 47%.

Half Year Performance:

The company reported 65% rise in consolidated net profit at Rs 65.56 crore for the first half ended September 2016. Net sales of the company rose to Rs 1672 crore for theperiod as compared to Rs 1184 crore in the year-ago period, a growth of 41%.

The OPM during the period rose by 170 bps to 9.9% due to decreased raw material expenses cum purchase of stock in trade. Raw material cost cum purchase of stock in trade (as a % to sales, net of stock) fell by 380 bps to 63%. Other expenses (% of sales net of stock) rose by 100 bps to 14.2%. Employee expenses rose 70 bps to 12.8%.

Thus the operating profit rose by 70% to Rs 165.6crore. Other income stood at Rs 6.09 crore, lower by 35%. After 45% rise in depreciation cost to Rs 62.09 crore and 75% rise in interest cost to Rs 23.09 crore, PBT rose 70% to Rs 86.55 crore. After 230 bps rise in tax rate, tax provision stood 86% higher at Rs 22.47 crore. Thereafter, net profit stood at Rs 65.56 crore against profit of Rs 38.84 crore in previous corresponding period (after adjusting for minority interest and share of profits), a rise of 65%.

Shares of Minda Industriesare currently tradingaround Rs 360 at BSE.