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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.
March 2017 quarter results
For the quarter ended March 2017, it registered a 11% growth in sales to Rs 831.19 crore.
OPM jumped 330 basis points to 17.2% which saw OP rising 37% to Rs 142.97 crore.
Other income crashed 98% to Rs 37 lakh (against Rs 19.89 crore) and interest cost fell 49% to Rs 6.14 crore.
As depreciation fell 23% to Rs 18.92 crore, PBT jumped 36% to Rs 118.28 crore.
EO loss fell 94% to Rs 2.37 crore. Thus PBT after EO jumped 132% to Rs 115.91 crore.
Tax provision stood at Rs 28.25 crore against a write back of Rs 37.17 crore. Finally, PAT grew 1% to Rs 87.66 crore.
FY 2017 results
In FY 2017, it registered a 12% growth in sales to Rs 3159.91 crore.
OPM jumped 360 basis points to 17.3% which saw OP rise 42% to Rs 547.24 crore.
Other income fell 62% to Rs 13.20 crore.
Interest cost fell 28% to Rs 43.70 crore.
As depreciation fell 2% to Rs 89.77 crore, PBT jumped 60% to Rs 426.97 crore.
EO loss stood at Rs 2.37 crore against Rs 45.60 crore. Thus PBT after EO grew 92% to Rs 424.60 crore.
Tax provision grew from Rs 7.10 crore to Rs 109.12 crore. Finally, PAT ended up 47% to Rs 315.48 crore.
Consolidated FY 2017 results
In FY 2017, it registered a 2% growth in consolidated sales to Rs 3529.05 crore.
OPM jumped 590 basis points to 17.0% which saw OP rise 56% to Rs 599.18 crore.
Other income fell 75% to Rs 15.69 crore and interest cost fell 36% to Rs 46.52 crore.
As depreciation fell 10% to Rs 104.49 crore, PBT jumped 81% to Rs 463.86 crore.
EO loss stood at Rs 2.37 crore against Rs 117.40 crore. Thus PBT after EO grew 232% to Rs 461.49 crore.
Tax provision grew from Rs 13.88 crore to Rs 120.34 crore. Finally, PAT ended up 173% to Rs 341.15 crore.
Amalgamation
The board approved the draft scheme of Amalgamation between Sundram Precision Components Limited, a wholly owned subsidiary with Sundram Fasteners Limited.
Automotive and automotive component are showing promising growth
The automotive industry and hence the automotive component market has shown promising growth and will continue to do so due to good monsoon, robust economic growth and higher disposable income available due to recent pay commission hikes.
Investing in other automotive component verticals will bolster the profitability
The company is actively investing in other automotive component verticals which will bolster the profitability of the company. The continued prospects of sourcing of Indian automotive components by the USA also augur well for the export market.
Valuation
The share price trades at Rs 386.
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