Greaves Cotton, one of indiafs leading independent engine manufacturing company for applications ranging from 3-wheelers, gensets, construction equipment etc has registered 18% fall in sales to Rs 423.40 crore for the quarter ended Dec 2013. Lower sales together with 270 bps contraction in operating margin resulted in 34% fall in operating profit to Rs 47.35 crore. After accounting for lower other income, higher interest and depreciation cost the PBT was lower by 39% to Rs 42.08 crore. As EO expenses stand lower by 91% (to Rs 1.34 crore), the de-growth at PBT after EO moderated to 25% to Rs 40.74 crore. However the PAT was higher by 26% to Rs 43.29 crore as the taxation being a write back of Rs 2.55 crore compared to a provision of Rs 19.93 crore in corresponding previous period. Eventually the net profit was higher by 10% to Rs 37.75 crore hurt by higher prior period tax of Rs 5.54 crore for the quarter compared to nil in the corresponding previous period.
Sales were lower by 7% to Rs 1283.73 crore. But with 150 bps contraction in OPM, the operating profit was lower by 18% to Rs 147.26 crore. But the de-growth at PBT (before EO) was 19% to Rs 132.02 crore as higher other income negate the impact of higher interest and depreciation cost to large extent. EO expenses for the period stood higher at Rs 41.39 crore, a rise of 135%. EO expenses for the quarter comprises diminution in value of investment of Rs 38.66 crore and VRS compensation of Rs 2.73 crore and for the corresponding previous period diminution in value of investment of Rs 14.13 crore and VRS compensation of RS 3.43 crore in corresponding previous period. Thus hit the PBT (after EO) stood lower by 37% to Rs 90.63 crore. Taxation was lower by 49% to Rs 23.56 crore and thus the PAT was lower by 32% to Rs 67.07 crore. Eventually the net profit was lower by 38% to Rs 61.53 crore as the prior period tax is a provision of Rs 5.54 crore compared to a write back of Rs 1.07 crore in corresponding previous period.
Sunil Pahilajani, MD & CEO, said, Though our sales have been affected by the overall dismal business environment, we have been constantly focusing on our product]market growth strategy. In line with this strategy, we have been working on technological improvements and value additions in our current product portfolio and have recently opened a Technology Centre for the Farm Equipment Business at Gummudipoondi, Chennai. The company has stepped up its investment in Research & Development activities to develop new products. Understanding customer needs, the construction business launched the 37 metre Boom Pump to plug in the product gap and refurbish the product portfolio along with the newly introduced concrete S valves. International business has also been able to widen its global footprint in South East Asia, East Africa and Middle East markets and has set up a distribution and aftermarket network to service customers in these regions. Coupled with these, we have been driving initiatives which are focused on cost optimization and human resource competency development. We believe in the long run, people and products will help us deliver quality and excellence thereby enhancing customer experience.
The stock hovers around Rs 61.05.
Greaves Cotton: Results