Quarterly Performance

The company witnessed increase in the raw material cost(inclusive of purchase of stock in trade) duringfirst quarter ended June 18. The raw material cost as % of sales net of stock adjustments rose 18bps to 60.96%. The employee cost fell 60bps to 9.8% in Q1FY19. Other expenses fell 80bps to 19.7%. Resultantly, operating margins improved 90 bps at 9.4%. Operating profit rose 33% to Rs 139.4crore on a y-o-y basis.

With 16% drop in other income to Rs 6.09 crore, PBIDT rose 30% to Rs 145.4crore. Interest cost fell 2%to Rs 14.1crore. Depreciation cost increased 6% at Rs 39.77crore. Thus, PBT registered 57% riseto Rs 94.57 crore. After Rs 31.19 crorein tax provision vis a vis Rs 19.12 crore in previous year, PAT rose 54%at Rs 63.38 crore.

During the quarter, the company earned 25% and 47% of its revenues from cycle and engineering businessrespectively. 24% revenues came from metal formed products. Revenues from cycle and accfell 9%. Engineering and metal formed products registered 27% and 10% rise in revenues respectively. The gear and gear product segment which constitutes 4% of overall revenues, registered 10%risein income.

At the segment front, cycle and accessories business witnessed 47% drop in revenues to Rs 7.53 crore. Engineering division registered 75% rise in profits to Rs 64.58crore. Metal formed products registered 33% rise in profits to Rs 28.19crore. Profit from gear and gear products registered 60% rise in profits to Rs 11.03 crore.

The stocks is trading around Rs 265 at BSE currently.