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Elecon Eng.: The other income kicker - Views on News from Equitymaster
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Elecon Eng.: The other income kicker
May 10, 2010

Elecon Engineering has announced its FY10 results. The company has reported 10% YoY and 15% YoY growth in sales and net profits respectively. Here is our analysis of the results.

Performance summary
  • Net sales grow by 14% YoY in 4QFY10, 10% YoY during FY10. Growth during the quarter aided by traction in the company's transmission equipment segment which grows 39% YoY during the quarter.
  • Operating margins contract by 2.3% YoY during the quarter. This is on account of higher raw martial costs (as percentage of sales).
  • Net profits grow by 60% YoY in 4QFY10 due to a Rs 82 m profit on sale of investments. Excluding this, profits grow by 11% YoY during the quarter on the back of the fall in interest expenses.
  • Board recommends a dividend of 1.5 per share (dividend yield of 1.9%)
Performance snapshot
(Rs m) 4QFY09 4QFY10 Change FY09 FY10 Change
Sales      2,885    3,291 14.1%    9,551   10,464 9.6%
Expenditure      2,435    2,854 17.2%    8,060    8,968 11.3%
Operating profit (EBDITA)         450       437 -2.9%    1,490    1,496 0.3%
Operating profit margin (%) 15.6% 13.3%   15.6% 14.3%  
Other income          50       117 132.0%         96       248 158.7%
Interest         158       117 -25.9%       484       509 5.2%
Depreciation          70         95 36.4%       221       331 49.5%
Profit before tax         272       341 25.3%       881       903 2.5%
Extraordinary income/(expense)           -            -              -            -     
Tax         102         70 -31.2%       306       241 -21.2%
Profit after tax/(loss)         170       271 59.4%       575       662 15.2%
Net profit margin (%) 5.9% 8.2%   6.0% 6.3%  
No. of shares            92.9      92.9  
Diluted earnings per share (Rs)*         7.1  
P/E ratio (x)*         11.2  

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