Sundaram Clayton FY01 net dips 21% YoY

Sundaram Clayton, a leading manufacturer of hyrdaulic brake actuator systems and castings has reported a 20% decline in its net for FY01 to Rs 182 m. The company's sales have grown by only 4% during the year.

(Rs m)	4QFY00	4QFY01	Change	FY00	FY01	Change
Sales	654.7	717.7	10%	2,318.3	2,403.0	4%
Other income	33.2	19.6	-41%	145.6	144.9	0%
Expenditure	586.1	617.1	5%	2,074.5	2,198.1	6%
Operating Profit (EBDIT)	68.5	100.6	47%	243.8	204.9	-16%
Operating Profit Margin (%)	10.5%	14.0%		10.5%	8.5%
Interest	-2.3	2.9	-230%	6.0	16.0	167%
Depreciation	22.5	26.6	18%	79.9	96.6	21%
Profit before tax/Loss	81.5	90.7	11%	303.4	237.2	-22%
Tax	21.3	25.1	18%	76.7	55.0	-28%
Profit after Tax/(Loss)	60.2	65.6	9%	226.7	182.2	-20%
Net profit margin (%)	9.2%	9.1%		9.8%	7.6%
No. of Shares (eoy) (m)	18.96	18.96		18.96	18.96
Diluted number of shares	18.96	18.96		18.96	18.96
Diluted Earnings per share*	12.7	13.8		12.0	9.6
*(annualised)

Its main clients in the hydraulic brake systems are Telco and Ashok Leyland. As the medium and heavy commercial vehicles segment saw a sharp decline in volumes in FY01 hence the company's sales have been under pressure. Its foundry division too is facing tough times as the passenger car segment too has slowed down.

However due to pick up in commerical vehicle volumes in the 4QFY01, the company's operating margins and sales growth have showed an improvement.

The company's operating margins declined from 10.5% in FY00 to 8.5% in FY01, due to higher raw material and staff expenses. Besides the pressure on sales growth too added to the decline in operating margins. However in the 4QFY01, operating margins showed a vast improvement due to a pick up in passenger cars as well as some improvement in commerical vehicles as well as reduction in certain operating expenses.

On the current price of Rs 59, Sundram Clayton is trading at 6.1x FY01 EPS of Rs 9.6