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News: Total operating income for the quarter came in at ₹2,320 crore (up 3% YoY) with growth coming healthy in the construction equipment space (up 49% YoY at ₹457 crore) amidst tractor sales volume decline of 7% on YoY basis (tractor segment revenues down 3% to ₹1,658 crore with ASP’s up 1% QoQ at ₹6.37 lakh/unit). EBITDA in Q3FY24 came in at ₹313 crore with corresponding EBITDA margins at 13.5% (up 60 bps QoQ). Resultant PAT for the quarter stood at ₹277 crore vs. ₹186 crore in Q3FY23 and ₹235 crore in Q2FY24.
Views: For the quarter company witnessed gross margin decline however other overhead costs lead to improvement in margin profile. Railway segment witnessed a 18% drop in revenues on YoY basis, however management attributed this to a temporary blip with record ~₹900 crore of orderbook. EBIT margins in the tractor segment came in at 13.8%, up 160 bps QoQ with management guiding for de-growth in domestic tractor industry at 6-7% for FY24E. The operational performance for the quarter was healthy however muted volume growth in the near term will keep stock upsides in check.
Impact: Neutral