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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.
The Group is engaged primarily in manufacture and sale of bolts and nuts, water and petrol pumps, sintered products, cold extruded components, hot and warm forged parts, radiator caps and other parts which largely have applications in automobile industry and thus the Group has only one reportable segment.
Quarter consolidated results
For the quarter, it registered a 7% growth in consolidated sales to Rs 1180.64 crore.
Consolidated revenue from operations for the quarter ended June 30, 2019 includes exports of Rs 430.09 crore (against Rs 368.98 crore), up 17%.
OPM fell 140 basis points to 16.3% which saw OP go down 1% to Rs 192.43 crore.
Other income fell 62% to Rs 4.60 crore and interest cost stayed at Rs 14.16 crore.
Other income for the quarter ended June 30, 2019 includes net foreign exchange gain of Rs Nil against Rs 11.89 crore.
As depreciation grew 48% to Rs 43.62 crore, PBT fell 15% to Rs 139.25 crore. Tax provision fell 18% to Rs 42.36 crore (tax incidence fell from 31.4% to 30.4%). PAT fell 14% to Rs 96.89 crore.
Minority interest jumped 180% to Rs 1.37 crore after which net profit fell 14% to Rs 95.52 cror
Consolidated FY 2019 results
The consolidated financial results include the financial results of Sundram Fasteners Limited and the financial results of its subsidiaries and step down subsidiaries, TVS Upasana Limited, TVS Infotech Limited, Sundram Fasteners Investments Limited, Sundram Non-Conventional Energy Systems Limited, Sundram Precision Components Limited, TVS Next Private Limited, TVS Infotech Inc., USA, Cramlington Precision Forge Limited, UK, Sundram Fasteners (Zhejiang) Limited, Republic of China, Sundram International Inc., USA and Sundram International Limited, UK.
'Sunfast TVS Limited' has been incorporated as a new wholly owned subsidiary of the Company with effect from April 8, 2019
In FY 2019, it registered an 17% growth in sales to Rs 4557.90 crore, PBT grew 18% to Rs 652.44 crore and PAT grew 18% to Rs 458.97 crore. Minority interest fell 8% to Rs 1.48 crore after which net profit grew 18% to Rs 457.49 cror
Other details
The three foreign subsidiaries of the Group have financial years ending on December 31, whereas the parent company along with its domestic subsidiaries have the year end of March 31. During the current quarter, such foreign subsidiaries have aligned their financial year end with that of the parent company for consolidation purposes, eliminating a 3 month time lag for incorporating the results of such foreign subsidiaries with the consolidated financial results of the Group.
As a result of this change, the consolidated financial results for the quarter ended June 30, 2019 also includes fmancial results of such foreign subsidiaries for the period January 1, 2019 to March 31, 2019. This has resulted in increase in revenue from operations by Rs 100.41 crore and reduction in profit after tax by Rs 1.38 crore. For the corresponding quarter ended June 30, 2018 the consolidated financial results represents financial results of such foreign subsidiaries for the period January 1, 2018 to March 31, 2018.
Valuation
The stock trades at Rs 422.
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