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 74.34% of which MSIL and SMC hold 14.81% each. Another group company of Bharat Seats, Sharda Motors holds 28.66%.

The company posted very poor numbers for Q3FY16. Net profit has nearly halved to Rs.1 crore from Rs.2 crore sequentially. Topline fell 6% to Rs.172 crore and EBITDA was down 22% at Rs.7 crore.

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.130 crore. Its margins are wafer thin and that is the biggest dissuading factor in this stock – NPM of the company is always just marginally above 1% but less than 1.5% but this time, in Q3, it slipped even below 1% to 0.68%.