- 27 May 2022
- ICICIdirect Research
GOODYEAR REPORTS MUTED NUMBERS FOR Q4FY22 BUT RETAINS HIGHER DIVIDEND OUTGO
News: The company posted muted set of numbers with topline for the quarter coming at Rs.598.2 down 1.1% QoQ. EBITDA for quarter stood at Rs.33.5 flat QoQ with EBITDA margins at 5.6% flat QoQ. Consequently PAT was at Rs.17.4 down 10.6% QoQ. Share of traded goods for the quarter stood at ~35% in Q4FY22 vs. ~40% in Q3FY22. Company has also declared a dividend Rs.20 per share and a special dividend of Rs. 80, with cumulative dividend placed at Rs.100/share (~11% yield on CMP)
Views: Margin performance for Q4FY22 was largely tracking reduction in employee cost which were down ~50 bps QoQ amidst similar quantum decline in gross margins. The company continues remains a debt free entity with surplus cash at ~Rs. 390 crore as of FY22 depicting strong B/S strength. Cash flow from operation were lower in FY22 tracking higher inventory build-up. This marks the third consecutive year of higher dividend out-go (>= Rs.80/share) amidst surplus cash on b/s amid limited capex spend, which we believe is a right strategy rewarding shareholders and at the same time improve return rations. We expect the stock to open positive in opening trade today
Impact: Positive