PPAP Automotive Limited announces Q3FY19 results

PPAP Automotive Limited announces Q3FY19 results

Chennai, February 11, 2019: 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 nine months ended December 31, 2018.

Particulars Q3FY19 Q3 FY18 9MFY19 9M FY18
Revenue from operations 93.52 90.22 311.85 270.00
EBITDA 15.96 19.26 59.99 56.20
Margin (%) 17.1% 21.3% 19.2% 20.8%
PAT 5.94 8.18 26.36 23.32
Margin (%) 6.4% 9.1% 8.5% 8.6%
EPS 4.24 5.84 18.83 16.66

Revenue Explanation:

Revenue from operations for the quarter ended December 31, 2018 (Q3FY19) at Rs. 93.52 crore compared to Rs. 90.22 crore during the same period last year (Q3FY18)having registered a topline growth of 3.7%. The company recorded a growth in the topline inspite of a degrowth of 9.0% in the Passenger Vehicle market during the quarter under review.

PPAP Automotive Limited announces Q3FY19 results

The Company derived 98% of sales from the Passenger Vehicle segment of the Indian Automotive Industry. The company’s automotive sealing products were used in 72% of total Passenger Vehicles (PV) produced at 8.87 lacs in India in Q3FY19. Maruti Suzuki including Suzuki Motors Gujarat continue to remain PPAP’s top customer accounting for 49% of the Part Sales. The Company’s second biggest customer, Honda has contributed 28% to the company’s topline of this quarter.

The Company has started producing parts for the following new models launched during the quarter under review: –

Customer Name Model
Maruti Suzuki India Ltd. (MSIL) Wagon R
Tata Harrier

The revenue from operations for the current year till date (9MFY19) stood at Rs. 311.85 crore compared to Rs. 270 crore during the same period last year (9MFY18) registering an increase of 15.5%. In the mid-term, the Company continues to exhibit strong sales performance and continues to grow at a higher rate than that of the industry.

The Company continues to focus on developing strong relationships with its customers in the Indian Automotive Industry. The company is currently developing parts for 24 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, 25% 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. 15.96 crore in Q3FY19, as against Rs 19.26 crore in the corresponding quarter of last fiscal and PAT of Rs. 5.94 crore for Q3FY19, as compared to Rs. 8.18 crore in Q3FY18. The quarter under review saw an unprecedented drop of sales of PV which impacted the profitability of the Company in the short term. The adverse trend in commodity prices and delay in foreign exchange compensations also impacted the bottom line. However, the Company continues to find avenues to negate the adverse trends.

The Company reported EBITDA of Rs. 59.99 crore in 9MFY19, as against Rs 56.2 crore, registering an increase of 6.7%. Inspite of the adverse trends, the company continues to exhibit a robust EBIDTA margin of 19.2%. The Company’s PAT increased by 13% to Rs. 26.36 crore for 9MFY19 as compared to Rs.23.32 crore for 9MFY18. The Company sustained the PAT margin at 8.5%.

Earnings per share (EPS) for Q3FY19 stood at Rs 4.24 and for 9MFY19 stood at Rs 18.83.

Commenting on the performance, Mr. Ajay Kumar Jain, Chairman and Managing Director of PPAP said, “The passenger car industry is facing short term challenges due to poor market sentiments due to natural calamities, vehicle financing issues and high oil prices. These challenges have impacted the financial performance of the Company in the short term. However, the Company continues to outperform the growth of the industry. We have accelerated the  improvement of all performance parameters so as to ensure much better results, no sooner better sentiments return to the market.”