Steel Exchange
An MNC, the company makes generators, engines, farm equipment and operates in two spaces- agri equipments and power generation space such as water pumps. But the performance of the company for Q1FY14 was not encouraging, reflecting the overall lackluster state of the auto sector. Its net sales dropped 10% (YoY) at Rs.101 crore. Exports in Q1 fell 55% (YoY) and QoQ, it was down 62%. Domestic sales was flat YoY but sequentially, it was down 22%. Exports showed a loss at EBIT level.
Though operating costs have been kept under leash, employee costs have risen 19%. Net profit came in at Rs.2.30 crore, down 53% and sequentially, it was down 46%. The performance of FY13 will stand out as it had an exceptional gain of Rs.20 crore due to sale of its Rudrapur plant at Uttarakhand and in that context, this fiscal, YoY, will stand pale, unless there is another exceptional gain this year too. Despite the performance, the stock enjoys fancy on the bourses. This is a debt free company and its cash balance is at Rs.58 crore. The company has always been a generous dividend payer and in FY12, it paid dividend at 90% and 75% in FY11 but in FY13 it was down at 40%. Its market cap currently stands at Rs.330 crore. As at 30th June 2013, Honda Motor held 66.67% stake and Usha International holds 1%, taking total promoters holding at 67.67%.