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Net sales for Swaraj Engines grew by 13% in June'14 quarter led by a 13% volume growth in engine sales to Tractor Industry. The growth could have been even higher, but for lower off takes for LCV engine components during the quarter. A flat OPM lead to a 13% rise in OPM. With lower other income down by 10% YoY and higher depreciation up by 58% due to change in accounting policy; the PBT grew by 5%. After paying total tax of Rs 8.25 crore, up by 5%, PAT for June'14 quarter was up by 5% to Rs 17.58 crore.
Performance for the quarter ended June'14
Net sales for Swaraj Engines for June'14 quarter, was up by 13% to Rs 166.13 crore, led by a 13% increase in volumes of engines to Tractor industry. The company sold 20044 units, its highest ever quarterly sale as compared to 17783 units in June'13 quarter. However, the growth was restricted due to lower sale of LCV engine component business to Swaraj Mazda.
OPM was flat at 15% and thus OP stood at Rs 24.92 crore, up by 13% YoY. The other income was down by 10% to Rs 4.25 crore. Interest costs are Nil and depreciation was up by 58% to Rs 3.34 crore. Due to change in accounting policy, depreciation includes higher charge of Rs 80 lakh for the quarter. Thus PBT stood at Rs 25.83 crore, up by 5% y.o.y. After providing total tax of Rs 8.25 crore, up by 5% y.o.y, PAT stood at Rs 17.58 crore, up by 5% y.o.y.
Performance for the 12 months ended March 2014
Net sales for Swaraj Engines for 12 months ended Mar'14 was up by 27% to Rs 608.28 crore. The company sold 74062 units, its highest ever 12 months sale as compared to 57377 units for same period last year. Timely completion of capacity expansion in last year helped the company to take full advantage of enhanced demand in FY'14.However, the growth was restricted due to lower sale of LCV engine component business to Swaraj Mazda. OPM was flat at 14.9%, resulting a 27% growth in OP to Rs 90.63 crore.
The other income was up by 14% to Rs 17.49 crore. Interest costs is negligible at Rs 0.04 crore and depreciation was up by 27% to Rs 9.12 crore. Thus PBT before EO stood at Rs 98.96 crore, up by 24% y.o.y. There is an EO expense (net) of Rs 1.15 crore 12 months ended Mar'14 ( Rs 2.13 crore of expense on account of laying feeder line by Punjab SEB and income of insurance claim of Rs 98 lakh ) as compared to Nil for 12 months ended Mar'13 period. Thus PBT after EO, was up by 23% to Rs 97.81 crore. After providing total tax of Rs 30.81 crore, up by 28% y.o.y, PAT stood at Rs 67 crore, up by 21% y.o.y.
The promoter shareholding stood at 50.6% and none of them are pledged. Mahindra and Mahindra currently hold 33.2% equity stake in the company.
The scrip is currently trading at Rs 900.
Other Developments
The next phase of capacity expansion to 105000 engines p.a is progressing as per schedule and it is expected that this enhanced capacity would be available by the end of first quarter of next fiscal.
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