SWARAJ ENGINES

The fortunes of this company are directly linked with that of the agriculture sector as it makes tractors and diesel engines, spare parts and components. Q1 is seasonally weak for this company and the numbers show exactly that. Sales volume of engines sold dropped 8% (YoY) to 18,383 units in current Q1 and this affected the overall performance. Net sales for the quarter was down 8% at Rs.152 crore. EBITDA was down 12% at Rs.22 crore and margins came in lower at 14.47% v/s 15.15% (YoY). Net profit for the quarter was at Rs.16 crore, down 11%. NPM was at 10.26% v/s 10.64%. Equity is at Rs.12.42 crore and EPS is at Rs.12.60 for Q1.

A debt free company, Mahindra & Mahindra holds 33.22% stake and Kirloskar Industries holds 17.39%. The company, apart from supplying engines to Swaraj division of Mahindra & Mahindra also supplies hi-tech engine components to SML Isuzu.  A debt free company, it funded its recent capacity expansion via internal accruals. The fortunes of the company are directly linked with that of the agriculture sector, which is for tractors. Thus if the harvest is good, the company could have a much better fiscal.