Punjab Tractors net drops 13% - Views on News from Equitymaster

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Punjab Tractors net drops 13%

Nov 1, 2000

Punjab Tractors Ltd has reported a 13% decline in its net profits for the 2QFY01 at Rs 309 m.

(Rs m)2QFY002QFY01Change
Sales 2,302 2,465 7.1%
Other Income 84 9 -89.3%
Expenditure 1,859 1,989 7.0%
Operating Profit (EBDIT) 443 476 7.5%
Operating Profit Margin (%)19.2%19.3% 
Interest - -  
Depreciation 35 44 25.7%
Profit before Tax492441-10.4%
Other Adjustments-- 
Tax 137 132 -3.6%
Profit after Tax/(Loss) 355 309 -13.0%
Net profit margin (%)15.4%12.5% 
No. of Shares (eoy)60.860.8 
Diluted no.of shares60.860.8 
Diluted Earnings per share*23.420.3 
*(annualised)   

The company's sales grew by only 7% to Rs 2,465 m for the 2QFY01, due to a slowdown in the tractor industry. Though the company was not that badly affected like some other players in the market, the slowdown has taken its toll on Punjab Tractors 2Q results.

The company's operating profits grew by 7.5% YoY during this period and its operating margins improved slightly to 19.3%. This is a commendable achievement when compared to others as it has curtailed its expenditure to maintain its margins.

The fall in other income has resulted in a decline in its net margins from 15.4% in the 2QFY00 to 12.5% in the 2QFY01.

As we are projecting an EPS of Rs 20.5 for FY01E, which is a 6% decline YoY, we will revise our estimates downwards by 5% in line with the 2Q performance. At the current price of Rs 159, it is trading at 7.3x FY01E EPS of Rs 20.5

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