Sundaram-Clayton Ltd net rises 188% on the back of other income
Sundaram Clayton's net sales went up by 18.2% YoY to Rs 569 m in the 1QFY01. SCL's presence in the auto ancillary segment is in two businesses namely hydraulic brake actuator systems and its foundry division. Its main clients are Telco and Ashok Leyland.
However due to higher operating expenses, the company's operating margins remained more or less stagnant at 9.6% in the 1QFY01. The net margins have improved by 870 basis points to 14.7% on the back of higher other income. The company's other income went up by 393% to Rs 83 m in the 1QFY01.
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As the company is dependant on the automobile industry, the business prospects will face a slowdown in the current year as commercial vehicles, passenger cars are all facing a slowdown in the current financial year. The only sector where demand continues to be strong is motorcycles.
Its main client in the two wheeler segment continues to be TVS Suzuki, a group company.'
On the current price of Rs 163, SCL is trading at 13.6x FY2000, EPS of Rs 11.98
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