TVS Srichakra (part of TVS group) one of the largest two wheeler and three-wheeler manufacturers in India recorded 33% YoY fall in net profit to Rs 6.64 crore for the quarter ended December 2011 despite 21% growth in net sales to Rs 347.52 crore. This was due to fall in OPM by 110 bps YoY to 7.6% led to mere 6% growth in operating profit to Rs 26.46 crore. This coupled with the sharp rise in interest cost (103% rise YoY) combined with marginal decline in depreciation further led to 33% fall in PBT to Rs 9.26 crore.
Net sales grew by 21% YoY to Rs 347.52 crore for the quarter ended December 2011. However, OPM contracted by 110 bps to 7.6% on the back of rise in consumption cost by 110 bps and increase in other expenses by 40 bps despite fall in staff cost by 60 bps as percentage to sales and net of stock adjustments. This led to mere 6% growth in operating profit to Rs 26.46 crore.
Moreover, the sharp 103% rise in interest cost to Rs 12.98 crore combined with marginal 12% decline in depreciation to Rs 4.22 crore there was 33% fall in the PBT to Rs 9.26 crore. Further, after the marginal increase in effective tax rate by 30 bps YoY to 28.3% led to the 33% fall in net profit to Rs 6.64 crore.
Nine Months Performance:
Net sales grew by robust 34% to Rs 1048.22 crore for the nine months ended December 2011. Also, margins are slightly improved by 20 bps YoY to 9.1% led to strong 37% growth in operating profit to Rs 95.75 crore. However, consequent to the sharp 104% rise in interest cost to Rs 37.10 crore and 19% incline in depreciation to Rs 15.92 crore, the growth in PBT reduced to 11% to Rs 42.73 crore. Further, the rise in effective tax rate by 120 bps to 30% led to mere 9% growth in net profit to Rs 29.91 crore.
Financial Results: TVS Srichakra