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Atul Auto: Volume decline in Domestic Markets Affects Topline growth - Views on News from Equitymaster
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  • May 23, 2017 - Atul Auto: Volume decline in Domestic Markets Affects Topline growth

Atul Auto: Volume decline in Domestic Markets Affects Topline growth
May 23, 2017

Atul Auto has announced the fourth quarter results of financial year 2016-2017 (4QFY17). While the topline declined by 20% YoY, the bottom-line declined by 42.9% YoY during the quarter.

Performance summary:
  • Total income declined by 19.8% YoY during 4QFY17. Net sales declined by 20% YoY. On the other hand, other operating income increased by 23.8%YoY. Atul Auto sold 8,385 vehicles in 4QFY17 as against 10,521 vehicles in 4QFY16, a decline of 20.3%. The after effects of Demonetisation continued till January. Decemeber sales volume were down by 36% Y-o-Y at 2556 units whereas January month sales declined by 37% at 2349 units.
  • Domestic sales volumes declined by 13.8% for the year at 36,507 units whereas export volumes grew by 49.3% at 2288 in FY 2017. Over Sales volume stood at 38,795 units in FY-2017 as compared to 43,893 units in FY-2016.
  • Operating margins stood at 9.9% during the quarter, a Y-o-Y decline of 3.5%. Operating profit declined by 40.6%. Atul Auto's gross margin for the quarter stood at 23.9%. EBITDA for the quarter decreased to Rs. 103 million compared to Rs 173 million in 4QFY16 and Rs 189 Million in 3QFY17. This is mainly due to lower volumes, increase in raw material costs, Employee costs and other expenses. Raw material costs increased due to increase in steel prices.
  • Net profit declined by 42.9% YoY. This is mainly on the back of decline in Sales volumes and lower operating profit.

    Financial Snapshot
    (Rs m) 4QFY16 4QFY17 Change FY16 FY17 Change
    Net sales 1,291 1,033 -20.0% 5,280 4,722 -10.6%
    Other operating income 6 8 23.8% 30 31 3.3%
    Total Income 1297 1041 -19.8% 5310 4753 -10.5%
    Expenditure 1,124 938 -16.6% 4,548 4,155 -8.6%
    Operating profit (EBDITA) 173 103 -40.6% 763 599 -21.5%
    Operating profit margin (%) 13.4% 9.9%   14.4% 12.7%  
    Other income 1 1 -23.1% 13 25 92.4%
    Interest 1 1 50.0% 8 6 -25.6%
    Depreciation 13 14 10.0% 53 53 0.0%
    Profit before tax 161 89 -44.9% 715 565 -21.0%
    Tax 52 27 -49.0% 241 192 -20.4%
    Effective tax rate 32.6% 30.1%   33.7% 34.0%  
    Profit after tax/(loss) 108 62 -42.9% 474 373 -21.3%
    Net profit margin (%) 8.4% 6.0%   9.0% 7.9%  
    No. of shares (m)         22  
    Fully diluted EPS (Rs)*         17.01  
    P/E (x)*         24.6  

    *Based on trailing 12-months earnings

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