• APRIL 30, 2001

Motor Industries net declines 52% YoY

Motor Industries Company Ltd (MICO),sales grew by 6% YoY in 1QFY02 to Rs 4,363 m. However, as the operating expenditure grew by 6.2% YoY during this period the company's operating margins dipped to 15.5% in 1QFY02.

(Rs m) 1QFY01 1QFY02 Change
Sales 4,116 4,363 6.0%
Other income 89 71 -20.8%
Expenditure 3,472 3,688 6.2%
Operating profit (EBDIT) 643 674 4.8%
Operating profit margin (%) 15.6% 15.5%  
Interest 1 5 315.4%
Depreciation 406 335 -17.5%
Profit before Tax 325 405 24.5%
Other adjustments 400 44  
Tax 164 180  
Profit after Tax/(Loss) 561 269 -52.1%
Net profit margin (%) 13.6% 6.2%  
No. of Shares (eoy) (m) 3.6 3.4  
Diluted number of shares 3.6 3.4  
Diluted Earnings per share* 622.8 315.7  

MICO is a 51% subsidiary of the German company Robert Bosch and is the country's largest auto ancillary player. It enjoys a near monopoly in diesel fuel injection (DFI) pumps with around 80% market share. It is also a leading player in spark plugs. Besides, it manufactures alternators, starter motors and auto electrical items.

Due to a change in valuation of inventory the company gained by Rs 308m in 1QFY01. Without this the company's net profit for 1QFY01 would have been lower at Rs 252 m. Had it not been for adjustments in changes in valuation of inventory, the company would have posted a gain in profits in 1QFY02, instead of a decline in profits.

The company is dependant on the commercial vehicles market mainly due to its strong presence in the diesel fuel injection pumps market. Though the company's sales have improved in 1QFY02, as a result of some pick up in the industry, the company in future plans to insulate itself by manufacturing petrol fuel injection pump sets to cater to the growing passenger car market, as this is a less cyclical market.

On the current price of Rs 2,392, MICO is trading at 7.7x FY01 EPS of Rs 311.

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