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What is the story about?
Shares of Raymond Ltd. gained as much as 9% on Tuesday, January 27, in response to their December quarter results that were better on an operating basis, despite a one-time labour code impact on profitability.
Net profit for the period fell 90% to ₹7 crore from ₹72.3 crore last year. Profitability during the quarter was impacted by the one-time impact of the new labour codes, which resulted in an exceptional item of ₹14 crore during the quarter.
Other expenses, such as cost of material, manufacturing and operating expenses, finance costs, employee benefit expenses, were all higher compared to the same quarter last year, impacting the bottomline as a result.
Despite this, higher revenues resulted in a strong operating performance by the company during the quarter. Revenue for the December quarter grew by 19.6% to ₹557.2 crore from ₹466 crore last year.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) during the quarter grew by 54.6% from the year-ago period to ₹60 crore from ₹38.8 crore, while margins expanded 250 basis points to 10.8% from 8.3% last year.
Within Raymond's business segments, the Aerospace business saw topline growth of nearly 50% from last year to ₹105 crore. However, accelerated launch of the new product line saw a small impact on margins worth nearly 100 basis points.
The company's Precision Technology and Auto Components business also saw topline growth of 15% from last year to ₹363 crore, while margins expanded over 300 basis points to 13.7% from 10.4% last year.
"We are seeing a sustained trend of domestic vendors transitioning into the production of sophisticated subsystems and complex precision components, which has maintained a robust order pipeline for Tier-1 and Tier-2 export partners," the company said in its post-earnings statement.
Raymond Ltd. also continues to remain net debt free with a cash surplus of ₹214 crore at the end of the quarter.
Raymond shares have cooled off slightly from the highs of the day, currently trading 4.8% higher at ₹955.8, after the earnings announcement.
Net profit for the period fell 90% to ₹7 crore from ₹72.3 crore last year. Profitability during the quarter was impacted by the one-time impact of the new labour codes, which resulted in an exceptional item of ₹14 crore during the quarter.
Other expenses, such as cost of material, manufacturing and operating expenses, finance costs, employee benefit expenses, were all higher compared to the same quarter last year, impacting the bottomline as a result.
Despite this, higher revenues resulted in a strong operating performance by the company during the quarter. Revenue for the December quarter grew by 19.6% to ₹557.2 crore from ₹466 crore last year.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) during the quarter grew by 54.6% from the year-ago period to ₹60 crore from ₹38.8 crore, while margins expanded 250 basis points to 10.8% from 8.3% last year.
Within Raymond's business segments, the Aerospace business saw topline growth of nearly 50% from last year to ₹105 crore. However, accelerated launch of the new product line saw a small impact on margins worth nearly 100 basis points.
The company's Precision Technology and Auto Components business also saw topline growth of 15% from last year to ₹363 crore, while margins expanded over 300 basis points to 13.7% from 10.4% last year.
"We are seeing a sustained trend of domestic vendors transitioning into the production of sophisticated subsystems and complex precision components, which has maintained a robust order pipeline for Tier-1 and Tier-2 export partners," the company said in its post-earnings statement.
Raymond Ltd. also continues to remain net debt free with a cash surplus of ₹214 crore at the end of the quarter.
Raymond shares have cooled off slightly from the highs of the day, currently trading 4.8% higher at ₹955.8, after the earnings announcement.
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