Automotive Axles registered strong earnings for the third quarter ended Dec 17. Net Profit for the quarter more than doubled to Rs 22.31 crore in Q3 FY18, against Rs10.75 crore in year-ago, driven by revenue as well as operational growth.
Revenue in Q3 increased sharply by 43% to Rs407.93 crore, from Rs 285.32 crore in previous corresponding quarter.
Established in 1981, Automotive Axles is a joint venture of Kalyani Group and Meritor Inc., USA. It manufactures drive axles, non-drive axles, front steer axles, specialty & defence axles and drum & disc brakes, and provides these products to major domestic and global manufacturers of trucks & buses.
Quarter Performance
The OPM during the third quarter ended Dec 2017 rose 180 bps to 10.8% due to decreased expenses on all fronts. Raw material cost (as a % to sales, net of stock) fell 130bps to 70.2%. Other expenses (% of sales net of stock) fell 40 bps at 12.3%. Employee expenses fell 15bps to 6.8%.
Thus the operating profitrose 73% to Rs44.09crore. Other income stood 75% higher at Rs1.45 crore. After 9% risein interest charges to Rs12 lakh and 18% rise in depreciation cost to Rs11.63 crore, the company's PBT more than doubled to Rs 33.79 crore. After 103% rise in tax provision to Rs 11.48 crore (52 bps drop in tax rate), net profit stood at Rs 22.31 crore, higher by 108%.
Half Year Performance:
Sales for first nine months ended Dec 17 rose 29% to Rs1050.29 crore.
The OPM during the first nine months ended Dec 2017 rose 120 bps to 10.6% due to decreased raw material and employee expenses. Raw material cost (as a % to sales, net of stock) fell 80 bps to 70.2%. Other expenses (% of sales net of stock) rose 17bps at 12.48%. Employee expenses fell 50 bps to 6.8%.
Thus the operating profit rose 46% to Rs111.7crore. Other income stood 6% higher at Rs4.28 crore. After 63% drop in interest charges to Rs36lakh and 8% rise in depreciation cost to Rs31.33 crore, the company's PBT rose 75% to Rs84.29 crore. After 73% rise in tax provision to Rs28.64 crore (50 bps drop in tax rate), net profit stood at Rs55.65 crore, higher by 76%.
Shares of Automotive Axles is currently trading 0.9% lower around Rs1772 at BSE on 14 Feb 2018, the following day after earnings were announced.
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