Punjab Tractors net up 6%, declares bonus - Views on News from Equitymaster

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Punjab Tractors net up 6%, declares bonus

Jun 7, 2000

Punjab Tractors Ltd has reported a net profit of Rs 1,333 m for FY2000, a growth of 5.9% YoY. The company's sales grew by 8.3% during the year to Rs 11,702 m in FY2000. Its operating margins improved from 16.4% in FY99 to 16.7% in FY2000.

(Rs m) FY99 FY00 Change
Sales 10,801 11,702 8.3%
Other Income 136 111 -18.4%
Expenditure 9,032 9,749 7.9%
Operating Profit (EBDIT) 1,769 1,953 10.4%
Operating Profit Margin (%) 16.4% 16.7%
Depreciation 137 160 16.8%
Profit before Tax 1,768 1,904 7.7%
Other Adjustments - - -
Tax 510 572 12.1%
Profit after Tax/(Loss) 1,258 1,333 5.9%
Net profit margin (%) 11.7% 11.4%
Earnings per share* 62.14 65.82
(annualised)

As the overall tractor industry grew by only 1.2% in FY2000, Punjab Tractors' sales growth can be attributed to an improvement in its market share from 18.4% in FY99 to 19.7% in FY2000 and better realisations during the year.

The company's other income figure includes net interest income earned during the year. However interest costs are likely to be minimal during the year as the company is a zero debt company except for some fixed deposits it holds of the amount of Rs 77.9 m in FY99.

In the current year, given the recent drought conditions prevailing in Gujarat and Rajasthan, tractor sales have been slack. However as monsoons are expected to be normal, this could result in a pick in tractor demand during the year.

The company has announced a liberal 2:1 bonus. Given its strong position in the industry, low debt levels, increase in market share, these factors look positive for the company. Punjab Tractors at the current price of Rs 725 is trading at 11.0xFY2000 earnings

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