Sundaram-Clayton posts a 44% growth in net - Views on News from Equitymaster

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Sundaram-Clayton posts a 44% growth in net

Apr 21, 2000

Sundaram Clayton (SCL) has reported a net sales of Rs 2,317 m for FY2000 which is a growth of 45% YoY, while its operating expenses grew by 41% YoY during this period. As a result the operating profits of the company have jumped up 81% YoY to Rs 247 m in FY2000, as compared to Rs 137 m reported in FY99. Sundaram Clayton operates in two businesses, hydraulic brake actuator systems and foundry. Its main customers for hydraulic brake actuator systems are Telco and Ashok Leyland. Majority of its foundry work is done for clients like TVS Suzuki, Maruti Udyog and TVS Lucas. It has reported a turnover of Rs 2,317 m for FY2000.

(Rs m) FY1999 FY2000 Change
Sales 1,600 2,317 44.8%
Other Income 132 143 8.3%
Expenditure 1,463 2,070 41.4%
Operating Profit (EBDIT) 137 247 81.1%
Operating Profit Margin (%) 9% 11%  
Interest - 11 -
Depreciation 58 79 36.2%
Profit before Tax 211 300 42.4%
Other Adjustments - - -
Tax 53 73 39.0%
Profit after Tax/(Loss) 158 227 43.5%
Net profit margin (%) 9.9% 9.8%  

The main reasons for this improvement in performance in FY2000 is a pick up in sales in commercial vehicles and the automobile segment, which has resulted in an improvement in demand from auto ancillary manufacturers like Sundaram Clayton. For the period April'99 to February'2000, commercial vehicles registered a sale of 146,783 vehicles which is a growth of 26.6% YoY. For the same period in FY99 commercial vehicle sales had registered a decline in volumes by 17.9% YoY to 115,949 vehicles.

The company's main clients like Telco and Ashok Leyland have registered a strong growth of 44% and 40% respectively in commercial vehicles for the first eleven months of FY2000. This has resulted in higher demand for hydraulic brake actuator systems. The performance of the company's foundry division also improved during the year as it supplied higher castings volumes to its customers like Tata Cummins, Hyundai, and Ford India Ltd.

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