Bharat Seats

Bharat Seats is a JV between India’s Relan group, Maruti Suzuki and Suzuki Motors for manufacturing of car seats for Maruti Suzuki. It also makes moulded floor carpets and Two Wheeler Seats for Maruti and Suzuki. The total promoter stake is at 74.31% of which MSIL and SMC hold 14.81% each. Another group company of Bharat Seats, Sharda Motors holds 28.66%. The promoters, Relan family has marginally hiked their stake in the company in current Q1 from 74.21% in Q4.

For Q1FY15, sequentially the performance was not so good with net profit at Rs.1.33 crore down 23% though YoY, it rose 5%. The story on net sales earned was also same, coming in at Rs.153 crore, it was down 1.3% (QoQ) and up 15%.

This company makes products mainly for Maruti and Suzuki thus its fortunes are tied deeply with them. It remains a small cap company with an equity of Rs.6.28 crore and market cap of just Rs.81 crore. It is sitting on a reserve of Rs.35 crore. Its margins are wafer thin and that is the biggest dissuading factor in this stock – NPM for almost all the four quarters of FY14 has been just over 1% but less than 1.5%.