Established in 1993, GNA Axles is one of India's leading rear axle shafts manufacturer. Its products find applications across on-highway vehicles (LCV, MCV, HCV and buses, among others) and off -highway vehicles (agricultural tractors and machinery, forestry, construction equipment, defence and mining, among others). GNA Axles has a large variety of Axle Shafts ranging from 1.5kg to 65kg & capacity to produce upto 165kg producing about 2 million Axle Shafts annually. It also manufactures solid and hollow spindles used in assembling the axle for various vehicles and equipment.

Its products are widely used world over by the leading OEM manufacturers across USA, Sweden, Turkey, Brazil, Italy, Germany, Spain, Mexico, Japan, UK, France, China and Australia, among others. Besides, the company is also tier 1 suppliers to several Indian OEMs.

Quarter Performance:

The OPM during the fourth quarter ended March 2018 rose 100 bps to 14.4%due to increased raw materialexpenses. Raw material cost (as a % to sales, net of stock) rose 830 at 67.3% during Q4FY18. Other expenses (% of sales net of stock) fell 580 bps to 14.5%. Employee expenses fell 180bps to 4.3%.

Domestic sales during the quarter rose 45% to Rs 111.29 crore while export sales rose 65% to Rs 93.23 crore.

Thus the operating profit rose 74% to Rs 29.51crore. Other income stood at Rs 67 lakh, lower by 56%. PBIDT thus rose 63% to Rs 30.18 crore. After 6% rise in depreciation cost at Rs 6.26 crore and 6% drop in interest expense to Rs 1.85crore, PBT rose 108% at Rs 22.07 crore. After 25% risein tax provision (1700 bpsdrop in tax rate) at Rs 5.62 crore, net profit stood at Rs 16.45crore against profit of Rs 6.11crore in previous corresponding quarter, a rise of 169%.

Full Year Performance:

For the full year ended March 2018, the company's topline grew 31% to Rs 670.14 crore.The OPM during FY18 fell 30 bps to 15.4%due to increased raw material expenses. Raw material cost (as a % to sales, net of stock) rose 280 at 65.1% during FY18. Other expenses (% of sales net of stock)fell 120bps to 15.6%. Employee expenses fell 70 bps to 4.5%.

Thus the operating profit rose 28% to Rs 103.1 crore. Other income stood at Rs 2.87 crore, lower by 1%. PBIDT thus rose 27% to Rs 105.9 crore. After 4% rise in depreciation cost at Rs 24.8 crore and 43% drop in interest expense to Rs 7.09 crore, PBT rose 58% at Rs 74.03 crore. After 34% rise in tax provision (560 bps drop in tax rate) at Rs 23.14 crore, net profit stood at Rs 50.89 crore against profit of Rs 29.59 crore in previous corresponding period, a rise of 72%.

Shares of GNA Axles closed 0.95% lower at Rs 540.8 on 29 May, 2018, the following day after earnings were announced.