Sundram Fasteners Q1 profit nearly doubles at Rs 75.55 crore


CHENNAI: TVS group company Sundram Fasteners Limited (SFL) saw its net profit nearly double to 75.55 crore in the first quarter up from 38.51 crore in the year-ago period. The company recorded around 13% growth in revenue from operations at 713.00 crore for the quarter ended June 30, 2016 as against 631.94 crore in the year-ago period. Export sales were at 246.52 crore, up 9% from 225.81 crore last Q1. Domestic sales, net of excise duties, were at 455.25 crore, up 15% over 395.64 crore last year.

The Q1 performance rode entirely on improved sales and cost savings unlike the surge in Q4 which included the proceeds from the sale of the company’s loss making German subsidiary Peiner Umformtechnik and its affiliates. Meenakshi Sundaram, CFO, SFL, said,”Our Q4 FY15-16 profit before tax and exceptional items was 83 crore which has jumped to 102 crore in Q1FY16-17. The Q4 jump included an exceptional item worth 43 crore on account of the Peiner divestment and a further tax credit of 36 crore. Without that, the notional profit after tax would have been 61 crore last Q4 which has gone up to 75.55 crore this Q1, up nearly 24%.”

The company clocked profit after tax (PAT) of 75.39 crore in Q4 of last fisc, 41.74 crore in Q3 and 51.74 crore in Q2. The stock jumped 11% to close at 213.55 on BSE on Monday. Analysts said the company has benefitted from the turnaround in the commercial vehicle market where it has substantial exposure. SFL has been riding positive market outlook among midcap stocks for a while now. “Our EBITDA level has gone up from 126 crore in Q4 of last fiscal to 140 crore in Q1 this year with margins jumping from 17.5% last fisc to 20% in Q1,” said Sundaram. Compared to last Q1’s tally of 94.70 crore, SFL’s earnings before interest, depreciation and taxes increased nearly 48% this Q1.

The company said it is positive about the automotive sector with the monsoon and sentiment buoyancy improving prospects. “Sundram Fasteners is also actively investing in other automotive component verticals which will bolster the profitability of the company,” the company said in a statement. “The continued prospect of sourcing of Indian automotive components from the USA also augurs well for the export market.”