Swaraj reports muted performance in Q3FY22SWARAJENG - 1503 Change: -15.95 (-1.05 %)
News: Net sales for the quarter came in at | 238 crore, down 13% YoY. Engine sales volume in Q3FY22 stood at 23,836 units, down 24% YoY with blended realisations up 2.3% QoQ at ~Rs.1lakh/unit. EBITDA for the quarter was at Rs.29 crore with corresponding EBITDA margins at 12.3%, down 160 bps QoQ. PAT in Q3FY22 stood at Rs.20 crore, down 19% YoY.
Views: Engine sales volume decline for the quarter was ahead of tractor sales volume decline at its anchor client i.e. M&M which is likely due to inventory rationalisation at customer end. Operating margin decline was primarily tracking negative operating leverage amidst 40 bps QoQ improvement in gross margins. Over the longer term however, the company has a stable business model and is a proxy on increasing farm mechanisation domestically. It is the key component (engine) supplier to Swaraj brand of tractors under M&M.