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 better than Q3 numbers in Q4FY16 and YoY, they were muted. Net sales for the quarter was down 8% (YoY) at Rs.175 crore. Costs were down 7.5% but this did not help the EBITDA, down 11% at Rs.8 crore. Net profit came in at Rs.3 crore, up from Rs.2 crore in previous Q4.

The company ended FY16 with a 1% rise in net sales at Rs.700 crore and net profit at Rs.7 crore, down 12.5%.

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.120 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 1.5% but less than 2%.