Automotive Axles (505010) Q2 24/25 earnings summary

Executive summary

• Despite a soft market, operational cost optimization led to strong performance in Q2 FY25.

• New axle product MS185 was successfully introduced and ramped up for Ashok Leyland.

• Continued investments in plant upgrades and automation to support future growth.

• Board approved unaudited financial results for the quarter and half year ended September 30, 2024, and revised the Code of Conduct for Insider Trading and Fair Disclosure of Unpublished Price Sensitive Information.

• Independent auditor's review found no material misstatements in the financial results.

Financial highlights

• Q2 FY25 sales exceeded INR 500 crores (₹4,946.84 million), down 15% year-over-year from INR 588 crores (₹5,844.11 million).

• Net profit for Q2 FY25 was ₹359.73 million, down from ₹450.88 million in Q2 FY24.

• EBITDA margin at 11.4% vs. 11.9% last year; EBIT margin at 9.7% vs. 10.3%.

• H1 FY25 sales near INR 1,000 crores, down 11% from INR 1,122 crores in H1 FY24.

• H1 FY25 EBITDA margin improved to 11.6% from 11.2% last year.

Outlook and guidance

• Market expected to remain flat for FY25, with potential 5-10% upside in H2 depending on demand and inventory.

• FY26 outlook remains conservative, with possible 10% growth if market conditions improve.

• Management expects to outperform market growth and maintain or improve EBITDA margins.

• Management continues to review operations as a single segment: automotive components manufacturing.