Force Motors Limited (FML) reported better than expected numbers for Q4FY18. Standalone revenue for Q4FY18 was up 25% yoy at Rs1,043cr, better than consensus estimate of Rs956cr. EBITDA was 22% yoy higher at Rs113cr., surpassing consensus estimate of Rs102cr. While the company managed to control operating and employee costs, raw material expenses were 27% yoy higher in Q4FY18. Consequently, EBITDA margin contracted 19bps yoy to 10.8%. However, it managed to marginally beat margin estimate of 10.7%. PAT growth tapered to 10% yoy due to higher tax rate (33% in Q4FY18 vs 30% in Q4FY17) and lower other income (down 43% yoy). PAT met consensus estimate.
Board of Directors of the company declared dividend of Rs10/- per equity share for FY18.
The company continued to have a debt free balance sheet as on March 31, 2018. Total cash, cash equivalents, bank balances and current financial assets on consolidated books of the company were Rs247cr as on March 31, 2018.
On the whole, the results were strong and we continue to have a positive view on the stock. There are several long term triggers for the stock such as its recently announced JV with Rolls-Royce, new product launches on the “Traveller” platform and engine supplies to BMW and Mercedes.
Force Motors Ltd is currently trading at Rs. 2,870, up by 60.15 points or 2.14% from its previous closing of Rs. 2,809.85 on the BSE.
The scrip opened at Rs. 2,814 and has touched a high and low of Rs. 2,944.40 and Rs. 2,800.10 respectively. So far 47,752 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 200 DMA.
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