- 26 Jul 2022
- ICICIdirect Research
The company reports healthy performance in Q1FY23SWARAJENG - 1548 Change: 3.35 (0.22 %)
News: Net sales for the quarter came in at Rs 389.4 crore, up 27% YoY. Engine sales volume in Q1FY23 stood at 38,428 units, up 14% YoY with blended realizations up 11% YoY at Rs 1.04lakh/unit. EBITDA for the quarter stood at Rs 55 crore with corresponding EBITDA margins at 13.8%, down 120 bps YoY. PAT in Q1FY23 stood at Rs 39.5 crore, up 17.5% YoY.
Views: Company reported better than expected EBITDA margins primarily driven by positive operating leverage amidst 130 bps QoQ decline in gross margin. Engine sales volume rise for the quarter was in tandem with tractor sales volume rise at its anchor client i.e. M&M. Over the longer term perspective, the company has a stable business model with superlative capital efficiency (RoCE >40%), healthy dividend yield (>4%) and is a proxy on increasing farm mechanization domestically.