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Greaves Cotton: GST Leads to Muted Growth for the Quarter - Views on News from Equitymaster
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  • Aug 24, 2017 - Greaves Cotton: GST Leads to Muted Growth for the Quarter

Greaves Cotton: GST Leads to Muted Growth for the Quarter
Aug 24, 2017

Greaves Cotton has announced its 1QFY18 results. The company has reported a 2.1% YoY growth in net sales and 6.8% YoY growth in net profits for the quarter. Here is our analysis of the results.

Performance summary
  • Net sales declined by 2.1% YoY during the quarter, mainly due to the GST impact.
  • In terms of volumes, three wheeler business was at 63,000 units as compared to 65,000 units YoY last quarter. Pumps sales was at 21,000 units as compared to 23,000 units YoY. Tiller sales were down to 1000 from 2000 YoY for the quarter. Genset sales were up to 1100 YoY from 900 last year. Four Wheeler segment was down to 6,000 as compared to 6,500 YoY.
  • Net profits were up by 6.8% YoY for the quarter. Profit growth was mainly on account of exceptional items of Rs 60 million. EBITDA declined by 8% YoY for the quarter.

    Financial performance: A snapshot
    (Rs m) 1QFY17 1QFY18 Change
    Net sales 4,445 4,539 2.1%
    Other operating income - - -
    Expenditure 3,844 3,985 3.7%
    Operating profit (EBDITA) 602 554 -8.0%
    EBDITA margin (%) 13.5% 12.2%  
    Other income 110.0 103.4 -6.0%
    Interest (net) 0.6 2.1 250.0%
    Depreciation 109.1 119.5 9.5%
    Profit before tax 602 535 -11.1%
    Exceptional Items -21 60  
    Tax 161 184 14.3%
    Minority Interest 35 0  
    Profit after tax/(loss) 385 412 6.8%
    Net profit margin (%) 8.7% 9.1%  
    No. of shares (m)   244  
    Diluted earnings per share (Rs)   7.52  
    Price to earnings ratio (x)*   19.32  

    *based on trailing 12 months earnings

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