- 09 Feb 2024
- ICICI Securities
OPERATIONAL PERFORMANCE REMAINS MUTED IN Q3FY24
SKFINDIA - 4604 Change: -22.50 (-0.49 %)News: Revenue increased by 1.4% YoY (-2.9% QoQ) to Rs 1092.3 crore in Q3FY24. EBITDA margin at 15.8% was lower by 130 bps YoY but improved 500 bps QoQ on lower raw material cost. Subsequently, EBIDTA declined by 6.3% YoY (+42% QoQ) to Rs 172.5 crore. PAT came at Rs 132.2 crore, up 13.3% YoY on higher other income. Sequentially, PAT was up 46.9% QoQ on better margins. For 9MFY24, revenue is up 4.9% YoY with EBITDA margin at 14.8% (-339 bps YoY).
Views: Revenue growth and margins have been muted YoY during 9MFY24 and remains below expectations. Though profitability improved sequentially during the quarter, meaningful recovery in revenue and margins on a sustainable basis would be the key factors to watch-ou for in coming quarters. We believe that, in the medium to long term, company would benefit substantially from its focus on high-growth areas like electric vehicles, renewable energy, railways, mining etc, where it targets to capture the larger pie of demand. Also, increasing focus on localisation and expanding share of after-market sales is expected to drive margins improvement.
Impact: Neutral