PPAP Automotive Q4 net profit down by 49.9% at INR 7.06 crore

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Revenue from operations down by 22.3% at 99.13 crore.

PPAP Automotive Limited, a leading manufacturer of automotive sealings systems, interior and exterior automotive parts in India, has announced its financial results for the quarter and financial year ended March 31, 2019.

Highlights:

• Revenue from operations at Rs. 410.98 crore
• EBITDA of Rs 77.20 crore with EBITDA margin at 18.8%
• PAT of Rs 33.41 crore with PAT margin at 8.1%
• Joins the select list of successful SAP enabled companies
• Commenced production for Maruti’s New Wagon R, New Ertiga, New Alto and the New Baleno (styling change), Tata’s Harrier, MG Motors’ Hector, Nissan’s Kicks and Triber, Honda’s New Amaze and Toyota’s Yaris.

Standalone Financial Performance

Revenue Explanation:

The revenue from operations for the current year (FY19) stood at Rs. 410.98 crore compared to Rs. 397.62 crore during the same period last year (FY18) registering anincrease of 3.4%. The sales of parts at Rs 388.62 crore compared to Rs 355.12 crore in FY18 grew at a healthy 9.4% given the country’s passenger vehicle production growth of flat 0.1% in FY19. The passenger vehicles production of 40.26 lacs in FY19 was stagnant compared to 40.21 lacs in FY18. In the mid-term, the Company continues to exhibit strong sales performance and works to grow at a higher rate than that of the industry.

For the quarter ended March 31, 2019 (Q4FY19), the Company registered revenue from operations of Rs. 99.13 crore in the quarter marred by continuing pressure on the passenger vehicle industry.

Particulars FY19 FY18 Q4FY19 Q4FY18
Revenue from Operations 410.98 397.62 99.13 127.62
EBITDA 77.20 84.88 17.21 28.68
Margins (%) 18.8 21.3 17.4 22.5
PAT 33.42 37.41 7.06 14.09
Margins (%) 8.1 9.4 7.1 11
EPS 23.87 26.72 5.04 10.06

The Company derived 98% of sales from the Passenger Vehicle a segment of the Indian Automotive Industry. Maruti Suzuki including Suzuki Motors Gujarat continue toremain PPAP’s top customer accounting for 47% of Part Sales. The Company’s second-biggest customer, Honda has contributed 32% to the Company’s top line of thisquarter.

The Company has started producing parts for the following new models of Maruti (Alto, Baleno [Styling Change]), Nissan (Kicks) and MG Motors (Hector) launched during the quarter.

The Company continues to focus on developing strong relationships with its customers in the Indian Automotive Industry. It participated in 11 new models of Passenger Vehicles and Two Wheelers in FY19. The Company is currently developing parts for 25 new models that are expected to start production within the next 2 years. The Company continues to scout for value added opportunities in the Passenger Vehicles, Commercial Vehicles and the Two Wheeler segments. During the quarter, 23% of the part sales were derived from new vehicle launches.

Profitability Explanation:

The Company reported Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) of Rs. 77.20 crore in FY19, as against Rs 84.88 crore, registering a fall of 9%. Inspite of the adverse trends, the Company continues to exhibit a robust EBIDTA margin of 18.8%. The Company’s PAT dropped by 10.7% to Rs. 33.42 crore in FY19as compared to Rs. 37.41 crore in FY18. The Company sustained the PAT margin at 8.1%.

The Company reported EBITDA of Rs. 17.21 crore in Q4FY19, as against Rs 28.68 crore in the corresponding quarter of last fiscal and PAT of Rs. 7.06 crore for Q4FY19, as compared to Rs.14.09 crore in Q4FY18. The quarter under review continued the trend of lower sales of PV which impacted the profitability of the Company in the short term. The increasedcost base of the newly set up plants has also temporarily impacted the bottom line. However, the Company continues to find avenues to negate the adverse trends and isready to grab the opportunities that will come with the improvement in sentiment and increased vehicle sales.

Earnings per share (EPS) for Q4FY19 stood at Rs 5.04 and for FY19 stood at Rs 23.87.

For the year ended March 31, 2019, PPAP’s consolidated net profit is reported at Rs. 33.74 crore, as compared to Rs. 39.31 crore in FY18. The company’s consolidated EPS stood at Rs. 24.10 as against Rs.28.08 in FY18.

The Board of Directors have proposed a final dividend of 25.00% i.e. Rs. 2.50 per share (previous year 25.00% i.e. Rs. 2.50 per share) on equity shares of face value Rs. 10/- each.

Commenting on the performance, Ajay Kumar Jain, Chairman and Managing Director of PPAP said ‘Due to general slowdown of the economy, the automotiveindustry is facing demand challenges which have resulted in lower production of vehicles in the short term. Due to the low demand of vehicles, the Company’s performance was also impacted. No sooner the economic buoyancy returns, the Company’s performance is expected to improve’.