Capitaline

Results 27-Jul-23

Analysis

Schaeffler India

Moderate revenue and profit growth, stable margins

Schaeffler India has recorded 5% growth in the net profit to Rs 237.28 crore in the quarter ended June 2023 (Q2CY2023). Net sales (including other operating income) increased 4.59% to Rs 1,829.14 crore. Sales of Mobility Compoents & Related Solutions segment has gone up 8.67% to Rs 1,445.34 crore (accounting for 79.02% of total sales). Sales of Others segment has gone down 8.36% to Rs 383.80 crore (accounting for 20.98% of total sales).

Profit before interest, tax and other unallocable items (PBIT) has jumped 6.52% to Rs 288.09 crore. PBIT of Mobility Compoents & Related Solutions segment rose 11.43% to Rs 216.49 crore (accounting for 75.15% of total PBIT). PBIT of Others segment fell 6.01% to Rs 71.60 crore (accounting for 24.85% of total PBIT).

PBIT margin of Mobility Compoents & Related Solutions segment rose from 14.61% to 14.98%. PBIT margin of Others segment rose from 18.19% to 18.66%. Overall PBIT margin rose from 15.47% to 15.75%.

Operating profit margin has jumped from 18.40% to 18.70%, leading to 6.31% rise in operating profit to Rs 342.02 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 40.90% to 42.27%. Purchase of finished goods cost fell from 22.14% to 19.87%. Employee cost increased from 6.20% to 6.35%. Other expenses rose from 12.46% to 13.17%.

Other income up 90.06% to Rs 30.79 crore. PBIDT rose 10.32% to Rs 372.81 crore. Provision for interest fell 9.68% to Rs 0.84 crore. Loan funds declined from Rs 58.15 crore as of 30 June 2022 to Rs 54.63 crore as of 30 June 2023. Inventories rose to Rs 1,413.99 crore as of 30 June 2023 from Rs 1,260.70 crore as of 30 June 2022. Sundry debtors were lower at Rs 1,066.20 crore as of 30 June 2023 compared to Rs 1,104.79 crore as of 30 June 2022. Cash and bank balance rose to Rs 1,394.86 crore as of 30 June 2023 from Rs 1,339.61 crore as of 30 June 2022.

PBDT rose 10.38% to Rs 371.97 crore. Provision for depreciation rose 5.19% to Rs 53.93 crore. Fixed assets increased to Rs 1,507.95 crore as of 30 June 2023 from Rs 1,197.34 crore as of 30 June 2022. Intangible assets declined from Rs 3.01 crore to Rs 0.83 crore.

Profit before tax grew 11.31% to Rs 318.04 crore. Provision for tax was expense of Rs 80.76 crore, compared to Rs 74.96 crore. Effective tax rate was 25.39% compared to 24.93%.Profit after tax rose 5.11% to Rs 237.28 crore.

Commenting on the results, Harsha Kadam, Managing Director, said, “We continued our growth momentum during the first half of 2023 despite certain macroeconomic challenges. A strong performance across our domestic businesses helped navigate the moderation in exports. Our trajectory of business wins and focussed efforts on increasing market coverage strongly aided our performance. Volume gains and stability in input costs enabled to sustain the earnings quality. We remain cautiously optimistic while we see some signs of uptick across key sectors. As we enter the second half of 2023, we remain committed to continue our growth story and generate long-term value for all our stakeholders; with sustainability at the core of how we conduct the business.“

Financial Performance H1CY2023

Net sales (including other operating income) of Schaeffler India has increased 6.22% to Rs 3,522.76 crore. Sales of Mobility Compoents & Related Solutions segment has gone up 10.02% to Rs 2,800.90 crore (accounting for 79.51% of total sales). Sales of Others segment has gone down 6.31% to Rs 721.86 crore (accounting for 20.49% of total sales).

Profit before interest, tax and other unallocable items (PBIT) has jumped 4.14% to Rs 550.32 crore. PBIT of Mobility Compoents & Related Solutions segment rose 5.02% to Rs 406.73 crore (accounting for 73.91% of total PBIT). PBIT of Others segment rose 1.71% to Rs 143.59 crore (accounting for 26.09% of total PBIT).

PBIT margin of Mobility Compoents & Related Solutions segment fell from 15.21% to 14.52%. PBIT margin of Others segment rose from 18.32% to 19.89%. Overall PBIT margin fell from 15.93% to 15.62%.

Operating profit margin has declined from 19% to 18.64%, leading to 4.21% rise in operating profit to Rs 656.70 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 40.25% to 42.69%. Purchase of finished goods cost fell from 22.63% to 20.01%. Employee cost increased from 6.26% to 6.36%. Other expenses rose from 12.37% to 12.97%.

Other income up 75.12% to Rs 63.48 crore. PBIDT rose 8.06% to Rs 720.18 crore. Provision for interest fell 7.34% to Rs 1.64 crore. Loan funds declined from Rs 58.15 crore as of 30 June 2022 to Rs 54.63 crore as of 30 June 2023. Inventories rose to Rs 1,413.99 crore as of 30 June 2023 from Rs 1,260.70 crore as of 30 June 2022. Sundry debtors were lower at Rs 1,066.20 crore as of 30 June 2023 compared to Rs 1,104.79 crore as of 30 June 2022. Cash and bank balance rose to Rs 1,394.86 crore as of 30 June 2023 from Rs 1,339.61 crore as of 30 June 2022.

PBDT rose 8.10% to Rs 718.54 crore. Provision for depreciation rose 4.54% to Rs 106.38 crore. Fixed assets increased to Rs 1,507.95 crore as of 30 June 2023 from Rs 1,197.34 crore as of 30 June 2022. Intangible assets declined from Rs 3.01 crore to Rs 0.83 crore.

Profit before tax grew 8.75% to Rs 612.16 crore. Provision for tax was expense of Rs 155.51 crore, compared to Rs 145.03 crore. Effective tax rate was 25.40% compared to 25.10%.Profit after tax rose 5.49% to Rs 456.65 crore.

Schaeffler India : Standalone Results
Particulars	2306 (3)	2206 (3)	Var.(%)	2306 (6)	2206 (6)	Var.(%)	2212 (12)	2112 (12)	Var.(%)
Net Sales	1829.14	1748.83	5	3522.76	3316.34	6	6867.42	5560.51	24
OPM (%)	18.70	18.40		18.64	19.00		18.85	17.47
OP	342.02	321.73	6	656.70	630.20	4	1294.39	971.54	33
Other Inc.	30.79	16.20	90	63.48	36.25	75	77.68	72.38	7
PBIDT	372.81	337.93	10	720.18	666.45	8	1372.07	1043.92	31
Interest	0.84	0.93	-10	1.64	1.77	-7	3.55	3.67	-3
PBDT	371.97	337.00	10	718.54	664.68	8	1368.52	1040.25	32
Depreciation	53.93	51.27	5	106.38	101.76	5	206.46	197.11	5
PBT	318.04	285.73	11	612.16	562.92	9	1162.06	843.14	38
EO Income	0.00	14.98	-	0.00	14.98	-	14.98	0.00	-
PBT after EO	318.04	300.71	6	612.16	577.90	6	1177.04	843.14	40
Taxation	80.76	74.96	8	155.51	145.03	7	297.83	214.02	39
PAT	237.28	225.75	5	456.65	432.87	5	879.21	629.12	40
EPS (Rs)*	60.7	54.9		58.4	54.0		55.5	40.3
* EPS is annualized on current equity of Rs 31.26 crore, Face value of Rs 2, Excluding extraordinary items.
EO : Extraordinary items
Figures in Rs crore
Source: Capitaline Corporate Database

Schaeffler India : Standalone Segment Results
	% of total	2306 (3)	2206 (3)	Var.(%)	% of total	2306 (6)	2206 (6)	Var.(%)	% of total	2212 (12)	2112 (12)	Var.(%)
Sales
Mobility Compoents & Related Solutions	79.0	1445.34	1330.04	9	79.5	2800.90	2545.86	10	78.5	5387.68	4384.99	23
Others	21.0	383.80	418.79	-8	20.5	721.86	770.48	-6	21.5	1479.74	1175.52	26
Total Reported Sales	100.0	1829.14	1748.83	5	100.0	3522.76	3316.34	6	100.0	6867.42	5560.51	24
Less: Inter segment revenues	0.0	0.00	0.00	-	0.0	0.00	0.00	-	0.0	0.00	0.00	-
Net Sales	100.0	1829.14	1748.83	5	100.0	3522.76	3316.34	6	100.0	6867.42	5560.51	24
PBIT
Mobility Compoents & Related Solutions	75.1	216.49	194.28	11	73.9	406.73	387.27	5	74.7	812.16	583.78	39
Others	24.9	71.60	76.18	-6	26.1	143.59	141.17	2	25.3	275.77	190.65	45
Total PBIT	100.0	288.09	270.46	7	100.0	550.32	528.44	4	100.0	1087.93	774.43	40
Less : Interest		0.84	0.93	-10		1.64	1.77	-7		3.55	3.67	-3
Add: Other un-allcoable		30.79	31.18	-1		63.48	51.23	24		92.66	72.38	28
PBIT Margin(%)
Mobility Compoents & Related Solutions		14.98	14.61	37		14.52	15.21	-69		15.07	13.31	176
Others		18.66	18.19	47		19.89	18.32	157		18.64	16.22	242
PBT		318.04	300.71	6		612.16	577.90	6		1177.04	843.14	40

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