Schaeffler India Limited (Schaeffler) reported in-line numbers for Q1CY18. Standalone revenue for Q1CY18 was up 13% yoy at Rs521cr, marginally lower than consensus estimate of Rs531cr. EBITDA was up 5% yoy at Rs92cr, while EBITDA margin contracted 145bps yoy to 17.7%. Operating performance for the quarter was affected by higher input cost (up 168bps yoy to 60%) and higher operating and manufacturing expenses (up 40bps yoy to 14%). PAT was up 15% yoy at Rs66cr, in-line with street estimates.
Other income for the quarter was 58% higher yoy, while tax rate (at 33%) was steady on a yoy basis.
Company continued to remain debt-free as indicated by near-zero finance cost during the quarter.
Schaeffler is currently in the process of merging group entities INA Bearings India (INA) and LuK India (LuK) with itself. The initiative called “One Schaeffler” will result in the creation of a new entity of size Rs4,000cr.
Schaeffler’s revenues in CY17 were Rs1,900cr, and hence the merger will result in an entity nearly double the size of the current entity. The resulting cost synergy will also result in margin improvement for the combined entity. The said transaction is expected to be closed by Q3CY18.
Schaeffler India Ltd is currently trading at Rs. 5,298.15, up by 1.9 points or 0.04% from its previous closing of Rs. 5,296.25 on the BSE.
The scrip opened at Rs. 5,300 and has touched a high and low of Rs. 5,325 and Rs. 5,275 respectively. So far 9,271 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 100 DMA.
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